The Members of STI India Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone Ind AS financial statements of STIIndia Limited ("the Company") which comprise the Balance Sheet as at 31March 2019 and the Statement of Profit and Loss (including othercomprehensive income) the statement of Cash Flows and the statement of changes in equityfor the year then ended and notes to the financial statement including a summary ofsignificant accounting policies and other explanatory information (herein afterreferred to as "standalone Ind AS financial statements")
2. In our opinion and to the best of our information and according to the explanationgiven to us the aforesaid Ind AS standalone financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thestate of affairs of the Company as at 31 March 2019 and its financial performanceincluding comprehensive income its cash flows and the change in equity for the year endedon that.
3. Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance 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 Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
4. Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. There matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
5. Management's Responsibility for the Standalone Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind As) specifiedunder Section 133 of the Act read with relevant rules issued thereunder. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act; for safeguarding the assets of the Company; for preventing anddetecting frauds and other irregularities; selection and application of appropriateimplementation and maintenance of accounting policies; making judgments and estimates thatare reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so. Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
6. Auditors Responsibility
Our objective are to obtain reasonable assurance about whether the financial statementsas a whole are free from material misstatements whether due to fraud or error and toissue an auditor's report that includes our opinion. Reasonable assurance is a high levelof assurance but is not a guarantee that an audit conducted in accordance with SAs willalways detect a material misstatement when it exists. Misstatements can arise from fraudor error and are considered material if individually or in the aggregate they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese financial statements.
Report on Other Legal and Regulatory Requirements
7. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section 11 of section 143 of theCompanies Act 2013 we give in the Annexure I a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable..
8. As required by Section143(3) of the Act we report that:
a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;
b. In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
c. The Balance sheet the statement of profit and loss including other comprehensiveincome the statement of cash flow and the statement of changes in equity dealt with bythis report are in agreement with the books of account.
d. In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards (Ind As) specified under Section 133 of the Act read withrelevant rule issued thereunder.
e. On the basis of the written representations received from the directors as on 31March 2019 and taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of Section164(2) of the Act;
f. We have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as of 31 March 2019 in conjunction with our audit of thestandalone Ind AS financial statements of the Company for the year ended on that date andour report dated 29/05/2019 as per Annexure II expressed.
g. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. As detailed in Note : 23 to the standalone Ind AS financial statement the companyhas disclosed the impact of pending litigation on its standalone Ind AS financialstatements;
ii. The company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the company.
iv. Attention is also invited to;
Note No.35 in "Notes to Account regarding the standalone Ind AS financialstatements of the Company having been prepared on going concern basis notwithstanding thefact that its net worth is completely eroded.
For V.K BESWAL & ASSOCIATES
Firm Registration No.:101083W
CA K.V. Beswal
M No.: 131054
STI India Limited
Annexure I to the Auditor's Report even date CARO 2016:
1. In respect of Fixed Assets:
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b. The fixed assets have been physically verified by the management at reasonableintervals during the year. We are informed that no material discrepancies were noticed bythe management on such verification.
c. The title deeds in respect of all immovable properties are held in the name of thecompany.
2. In respect of Inventories:
As explained to us physical verification of inventory has been conducted during theyear at reasonable intervals by the management and in our opinion and according to theinformation and explanation given to us the Company is maintaining proper records of itsinventories and no material discrepancies were noticed on physical verification.
3. In respect of loans secured or unsecured granted by the Company to other Companiesfirms LLP or other parties covered in the register maintained under section 189 of theCompanies Act 2013.
a. The terms and conditions of grant of such loans are not prejudicial to the interestof the Company.
b. The repayments of the principal are regular. Loan is given Interest free.
c. The amounts are payable on demand.
4. The Company has complied with the provisions of section 185 and 186 of the CompaniesAct 2013 in respect of loan and guarantees given and securities provided. However thereis no Loans given and Investments made during the year.
5. During the year the company has not accepted any deposits from public or by anymeans hence the said clause 3(v) of the said order is not applicable to the Company.
6. As per the information and explanations provided to us we are of the opinion thatin pursuant to the prescribed rules by Central Government the Company had maintained costrecords u/s. 148(1) of the Companies Act2013 however we have not done a detailedexamination of the same.
7. In respect of Statutory Dues:
(a) According to record of the Company produced before us the Company is generallyirregular in depositing with appropriate authorities undisputed statutory dues includingprovident fund investor education and protection fund employees'' state insuranceincome tax customs duty and other statutory dues applicable to it. According to theinformation and explanations given no undisputed amounts payable in respect ofIncome-Tax goods and service tax customs duty were outstanding as at 31.03.2019 for aperiod of more than six months from the date they became payable except as given below:Statement of Arrears of statutory dues outstanding (excluding interest) for more than sixmonths as at 31st March 2019:
(Rs. in lacs)
|Sr. No ||Nature of Dues ||Amount |
|1. ||Central Sales Tax ||3.87 |
|2. ||Tax Deducted at Source ||116.41 |
|3. ||Tax Collection at Source ||4.09 |
|4. ||Profession Tax ||4.07 |
|5. ||ESIC ||39.48 |
| ||Total ||167.92 |
(b) According to the records of the company there are no dues of Income-Tax sales taxwealth tax goods and service tax customs duty excise duty/cess which have not beendeposited on account of any dispute except as given below.
| || || || ||(Rs in Lacs) |
|Nature of the Act ||Nature of the Dues ||Amount ||Period to which the amount relates ||Forum where dispute is pending |
|Central Sales Tax Act 1956 ||CST ||63.00 ||1995-96 ||Writ Petition filed in M.P High Court |
|Central Excise Tax Act 1944 ||Excise Duty ||27.03 ||September 2004 ||In the High Court of M.P |
|Central Excise Tax Act 1944 ||Excise Duty ||65.49 ||March 2004 to September 2004 ||In the High Court of M.P |
|Central Excise Tax Act 1944 ||Excise Duty ||11.02 ||2007-08 & 2008-09 ||Additional Commissioner of Central Excise Indore |
|Income Tax Act 1961 ||Penalty ||0.50 ||A.Y.2006-07 ||CIT(A)-Indore |
|Total || ||167.04 || || |
8. As per the information and explanations given to us the company has not taken loansfrom bank or financial institutions. The company has not defaulted in repayment of dues todebenture holders.
9. During the year the Company has not raised any fund by way of initial public offeror further public offer (including debt instruments) and term loans therefore no commentsunder the clause are called for.
10. Based upon the audit procedures performed and information and explanations given bythe management we report that no fraud on or by the Company has been noticed or reportedduring the course of our audit.
11. According to the records of the Company the Managerial Remuneration has been paidor provided in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Companies Act 2013.
12. In our opinion and to the best of our information and according to the explanationsprovided by the management we are of the opinion that the company is not a Nidhi company.Hence in our opinion the clause does not apply to the company.
13. The Company has disclosed all the transactions with the related parties in theFinancial Statements during the year and the transactions are in compliance with sections177 and 188 of Companies Act 2013.
14. During the year under consideration the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures hencecomments under this clause are not called for.
15. According to the provisions of section 192 of Companies Act 2013 the company hasnot entered into any non-cash transactions with directors or persons connected with himduring the year hence no comments under this clause are called for.
16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934 hence this clause is not applicable and no comments under thisclause are called for.
For V.K BESWAL & ASSOCIATES
Firm Registration No:101083W
CA K.V. Beswal
Independent Auditor's report on the Internal Financial Controls with reference tofinancial statements and its operative effectiveness 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 Ind AS financial statements of STIIndia Limited ("the Company") as of and for the year ended 31 March 2019 wehave audited the internal financial controls over financial reporting (IFCoFR) of thecompany of as of that date.
Management's Responsibility for Internal Financial Controls
2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the criteria being specified by management. Theseresponsibilities include the design implementation and maintenance of internal financialcontrols with reference to financial statements that were operating effectively forensuring the orderly and efficient conduct of the company's business including adherenceto company'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.
3. Our responsibility is to express an opinion on the Company's IFCoFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India (ICAI) and deemed to be prescribed undersection 143(10) of the Act to the extent applicable to an audit of IFCoFR and theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") issued by the ICAI. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate IFCoFR were established and maintained and ifsuch controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining anunderstanding of IFCoFR assessing the risk that a material weakness exists and testingand evaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A company's IFCoFR is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of standalone Ind AS financialstatements for external purposes in accordance with generally accepted accountingprinciples including the Ind AS. A company's IFCoFR includes those policies and proceduresthat (1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company; (2)providereasonable assurance that transactions are recorded as necessary to permit preparation ofstandalone Ind AS financial statements in accordance with generally accepted accountingprinciples including Ind AS and that receipts and expenditures of the company are beingmade only in accordance with authorisations of management and directors of the company;and (3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the standalone Ind AS financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that IFCoFR may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.
8. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31 March 2019 based on the criteriabeing specified by management.
For V.K BESWAL & ASSOCIATES
Firm Registration No:101083W
CA K.V. Beswal