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Sterling & Wilson Solar Ltd.

BSE: 542760 Sector: Engineering
NSE: SWSOLAR ISIN Code: INE00M201021
BSE 11:52 | 04 Mar 245.70 6.40
(2.67%)
OPEN

242.00

HIGH

247.35

LOW

235.80

NSE 11:44 | 04 Mar 244.90 5.75
(2.40%)
OPEN

237.20

HIGH

247.50

LOW

236.70

OPEN 242.00
PREVIOUS CLOSE 239.30
VOLUME 33986
52-Week high 294.60
52-Week low 69.75
P/E 23.22
Mkt Cap.(Rs cr) 3,941
Buy Price 245.30
Buy Qty 33.00
Sell Price 245.70
Sell Qty 3.00
OPEN 242.00
CLOSE 239.30
VOLUME 33986
52-Week high 294.60
52-Week low 69.75
P/E 23.22
Mkt Cap.(Rs cr) 3,941
Buy Price 245.30
Buy Qty 33.00
Sell Price 245.70
Sell Qty 3.00

Sterling & Wilson Solar Ltd. (SWSOLAR) - Auditors Report

Company auditors report

To the Members of

Sterling and Wilson Solar Limited

(formerly known as Sterling and Wilson Solar Private Limited)

Report on the audit of the standalone financial statements Opinion

We have audited the standalone financial statements of Sterling andWilson Solar Limited (formerly known as Sterling and Wilson Solar Private Limited)(‘the Company') which comprise the Standalone Balance Sheet as at 31 March2019 the Standalone Statement of Profit and Loss (including Other Comprehensive Income)the Standalone Statement of Changes in Equity and the Standalone Statement of Cash Flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies and other explanatory information in whichare included the returns for the year ended on that date audited by us of theCompany's Branches located at Australia Kenya Mexico Philippines and Indonesia andin which are included the returns for the year ended on that date audited by the branchauditors of the Company's Branches located at UAE Zambia Namibia BangladeshArgentina Jordan Egypt and Vietnam (hereinafter referred to as "the standalonefinancial statements").

In our opinion and to the best of our information and according to theexplanations given to us and based on the consideration of report of branch auditors asset out in the Other Matters paragraph the aforesaid standalone financial statements givethe information required by the Companies Act 2013 ("Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31 March 2019and profit and other comprehensive income changes in equity and its cash flows for theyear 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 Act. Our responsibilities under those SAsare further described in the Auditor's Responsibilities for the Audit of theStandalone 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 thestandalone financial statements under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedand the evidence obtained by the other auditors in terms of their reports referred to inthe "Other Matters" paragraph below is "sufficient and appropriate toprovide a basis for our opinion.

Other Information

The Company's management and Board of Directors are responsiblefor the other information. The other information comprises the information included in theCompany's annual report but does not include the standalone financial statements andour 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.

Management's responsibility for the standalone financialstatements

The Company's management and Board of Directors are responsiblefor the matters stated in Section 134 (5) of the Act with respect to the preparation ofthese standalone financial statements that give a true and fair view of the state ofaffairs profit/loss and other comprehensive income changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing 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 of theaccounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management and Boardof Directors are responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic "decisions of users taken on the basis of these standalone financialstatements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof 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 onwhether the Company has adequate internal financial controls with reference to standalonefinancial statements 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 standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

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.

Other Matters

We did not audit the financial information of Eight branches (locatedat UAE Zambia Namibia Bangladesh Argentina Jordan Egypt and Vietnam) included in thestandalone financial statements of the Company whose financial information reflect totalassets of Rs 3703.12 million as at 31 March 2019 and the total revenue of Rs 5810.20million for the year ended on that date as considered in the standalone financialstatements. The financial information of these branches have been audited by the branchauditors whose reports have been furnished to us and our opinion in so far as it relatesto the amounts and disclosures included in respect of these branches is based solely thereport of such branch auditors.

All these branches referred to in the paragraph above are locatedoutside India whose financial statements and other financial information have beenprepared in accordance with the accounting principles generally accepted in theirrespective countries and which have been audited by branch auditors under generallyaccepted auditing standards applicable in their respective countries. The Company'smanagement has converted the financial statements of such branches located outside Indiafrom accounting principles generally accepted in their respective countries to accountingprinciples generally accepted in India. We have audited these conversion adjustments madeby the Company's management. Our opinion in so far as it relates to the balances andaffairs of such branches located outside India is based on the report of branch auditorsand the conversion adjustments prepared by the management of the Company and audited byus.

Our opinion is not modified in respect of these matters.

Report on other legal and regulatory requirements

1. As required by the Companies (Auditor's Report) Order 2016(‘the Order') issued by the Central Government of India in terms of Section 143 (11)of the Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

(A) 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 andproper returns adequate for the purposes of our audit have been received from the branchesnot visited by us;

(c) the reports on the accounts of the branch offices of the Companyaudited under Section 143 (8) of the Act by branch auditors have been sent to us and havebeen properly dealt with by us in preparing this report;

(d) the Standalone Balance Sheet the Standalone Statement of Profitand Loss (including other comprehensive income) the Standalone Statement of Changes inEquity and the Standalone Statement of Cash Flows dealt with by this report are inagreement with the books of account and with the returns received from the branches notvisited by us;

(e) in our opinion the aforesaid standalone financial statementscomply with the Indian Accounting Standards prescribed under Section 133 of the Act;

(f) on the basis of written representations received from the directorsas on 31 March 2019 and taken on record by the Board of Directors none of the directorsis disqualified as on 31 March 2019 from being appointed as a director in terms ofSection 164 (2) of the Act; and

(g) with respect to the adequacy of the internal financial controlswith 'reference to financial statements of the Company and the operating effectiveness ofsuch controls refer to our separate Report in "Annexure B".

(B) with respect to the other matters to be included in theAuditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us :

i. the Company has disclosed the impact of pending litigations as at 31March 2019 on its financial position in its standalone financial statements - Refer Note44 to the Standalone financial statements;

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

iii. there were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company; and

iv. the disclosures in the standalone financial statements regardingholdings as well as dealings in specified bank notes during the period from 8 November2016 to 30 December 2016 have not been made in these standalone financial statements sincethey do not pertain to the financial year ended 31 March 2019.

(C) With respect to the matter to be included in the Auditors'Report under Section 197 (16) of the Act:

We draw attention to note 58 to the standalone financial statementsrelating to remuneration paid by a subsidiary of the Company to non-executive directors ofthe Company being in excess of the limit laid down under Section 197 of the Act by Rs 6.35million as at 31 March 2019. The excess remuneration paid has been approved by theshareholders in the Extraordinary General Meeting held on 10 June 2019. In our opinion andaccording to the information and explanations given to us the remuneration paid by theCompany to its manager during the current year is in accordance with the provisions ofSection 197 of the Act and is not in excess of the limits laid down under Section 197 ofthe Act. The Ministry of Corporate Affairs has not prescribed other details under Section197 (16) of the Act which are required to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No : 101248W/W-100022
Aniruddha God bole
Mumbai Partner
11 June 2019 Membership No: 105149

Annexure A to the Independent Auditors' Report - 31 March 2019

With reference to the Annexure A referred to in the Independent Auditors' Reportto the members of the Company on the standalone financial statements for the year ended 31March 2019 we report the following:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has a regular programme of physical verification of its fixed assetsby which all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its business. In accordance with the aboveprogramme certain fixed assets were physically verified by the management and nodiscrepancies were noticed upon such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of records of the Company the Company does not have any immovable properties.Accordingly paragraph 3 (i) (c) of the Order is not applicable to the Company.

(ii) The inventory of project land stores and spare parts and construction materialshas been physically verified by the management during the year. In our opinion thefrequency of such verification is reasonable. The discrepancies noticed on verificationbetween the physical stocks and the book records were not material and these have beenproperly dealt with in the books of account.

(iii) The Company has granted unsecured loans to four companies and two body corporatescovered in the register maintained under Section 189 of the Companies Act 2013 (‘theAct'). The Company has not granted any loans secured or unsecured to firms limitedliability partnerships or other parties covered in the register required to be maintainedunder Section 189 of the Act.

(a) According to the information and explanations given to us and based on the auditprocedure conducted by us we are of the opinion that the rate of interest and other termsand conditions of the unsecured loans granted by the Company to four companies and twobody corporates covered in the register required to be maintained under Section 189 of theAct are not prima facie prejudicial to the interest of the Company.

(b) According to the information and explanations given to us and based on the auditprocedures conducted by us the unsecured loans granted to four companies and two bodycorporates and interest thereon are repayable on demand. The borrowers have been regularin the payment of principal and interest as demanded.

(c) According to the information and explanations given to us and based on the auditprocedure conducted by us we are of the opinion that there are no overdue amounts of morethan 90 days in respect of the loans granted to four companies and two body corporatescovered in the register required to be maintained under Section 189 of the Act.

(iv) In our opinion and according to the information and explanations given to us andbased on the audit procedures conducted by us the Company has complied with theprovisions of Section 185 and 186 of the Act with respect to the loans granted to fourcompanies and two body corporates and investments made by the Company. The Company has notprovided any guarantee or security during the year to the parties covered under Section185 and 186 of the Act. Accordingly compliance under Section 185 and 186 of the Act inrespect of providing guarantees and securities is not applicable to the Company.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia under the provisions of Sections 73 to 76 or any other relevant provisions of theAct and the rules framed there under. Accordingly paragraph 3 (v) of the Order is notapplicable to the Company.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules prescribed by the Central Government for maintenance of cost records underSection 148 (1) of the Act and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. However we have not made a detailedexamination of the records.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including Provident fund Employees'State Insurance Profession tax Income tax Social Security tax Goods and service taxCess and other material statutory dues have generally been regularly deposited during theyear with the appropriate authorities though there have been slight delays in a fewcases.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employees' State Insurance Profession taxIncome tax Social Security tax Goods and service tax Cess and other material statutorydues were in arrears as at 31 March 2019 for a period of more than six months from thedate they became payable.

Also refer note 44 to the standalone financial statements.

(b) According to the information and explanations given to us there are no dues ofIncome tax and Goods and service tax which have not been deposited with the appropriateauthorities on account of any dispute.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to banks and financial institutions.The Company did not have any loans or borrowings from government or outstanding dues todebenture holders during the year.

(ix) In our opinion and according to the information and explanations given to us theCompany has not raised any moneys by way of initial public offer or further public offer(including debt instruments) and has not obtained any term loans Accordingly paragraph 3(ix) of the Order is not applicable to the Company

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by themanagement.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company due to inadequate profits during the currentyear the managerial remuneration paid by a subsidiary to the non-executive directors ofthe Company is in excess of the limits specified under Section 197 of the Act read withSchedule V to the Act by Rs 6.35 million. As more fully explained in note 58 to thestandalone financial statements the Company has obtained approval from shareholders forsuch excess remuneration paid in the Extraordinary General Meeting held on 10 June 2019.According to the information and explanations given to us and based on our examination ofthe records of the Company the Company has paid/ provided for managerial remuneration inrespect of the manager in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company and the Nidhi Rules 2014 are not applicable to it.Accordingly paragraph 3 (xii) of the Order is not applicable to the Company.

(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. The details of such related partytransactions have been disclosed in the standalone financial statements as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3 (xiv) of the Order is not applicable to 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 any non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3 (xv)of the Order is not applicable to the Company.

(xvi) According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3 (xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No : 101248WW-100022
Aniruddha Godbole
Mumbai Partner
11 June 2019 Membership No: 105149

Annexure B to the Independent Auditors' Report - 31 March 2019

Report on the internal financial controls with reference to theaforesaid standalone financial statements under Clause (i) of Sub-section 3 of Section 143of the Companies Act 2013 ("the Act")

(Referred to in paragraph 1 A (g) under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

Opinion

We have audited the internal financial controls with reference to thestandalone financial statements of Sterling and Wilson Solar Limited (formerly known asSterling and Wilson Solar Private Limited) ("the Company") as of 31 March 2019in conjunction with our audit of the standalone financial statements of the Company forthe year ended on that date.

In our opinion the Company has in all material respects an adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls with reference to standalone financial statements wereoperating effectively as at 31 March 2019 based on the internal financial controls withreference to standalone financial statements 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 (the "Guidance Note").

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors areresponsible for establishing and maintaining internal financial controls based on theinternal financial controls with reference to standalone financial statements criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany'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 Companies Act 2013(hereinafter referred to as "the Act").

Auditors' Responsibility

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 Guidance Note and the Standards onAuditing prescribed under Section 143(10) of the Act to the extent applicable to anaudit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the ICAI. Those Standards and the Guidance Note require thatwe comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to standalonefinancial statements was established and maintained and if such controls operatedeffectively in all "material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial control with reference to standalone financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone financial statements included obtaining an understanding ofsuch internal financial controls assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor's judgmentincluding the assessment of the risks of material misstatement of the standalone financialstatements whether due to fraud or error.

We believe that the audit evidence we have obtained and the auditevidence obtained by the branch auditors in terms of their report referred to in the OtherMatters paragraph below is sufficient and appropriate to provide a basis for our auditopinion on the Company's internal financial controls with reference to standalonefinancial statements.

Meaning of Internal Financial Controls with reference to standalonefinancial statements

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

Because of the inherent limitations of internal financial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Other Matters

We did not audit the internal financial controls with reference tofinancial statements of eight branches (in UAE Zambia Namibia Bangladesh ArgentinaJordan Egypt and Vietnam) of the Company. The internal financial control with referenceto financial statements of these branches have been audited by the branch auditors whosereports have been furnished to us and our opinion in so far as it relates to the internalfinancial control with reference to financial statements included in respect of thesebranches is based solely on the report of such branch auditors.

Our opinion is not modified in respect of this matter.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Aniruddha Godbole
Mumbai Partner
11 June 2019 Membership No: 105149

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