1. We have audited the attached Balance Sheet of Sterling Holiday
Resorts (India) Limited as at March 31, 2012 and the Statement of
Profit and Loss for the year ended on that date and the cash flow
statement for the year ended on that date annexed thereto. These
financial statements are the responsibility of the Company''s
management. Our responsibility is to express an opinion on the
financial statements based on our audit.
2. We conducted our audit in accordance with the auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
3. As required by the Companies (Auditor''s Report) Order, 2003 issued
by the Central Government of India in terms of sub-section (4A) of
Section 227 of The Companies Act, 1956 we enclose in the annexure a
statement on the matters specified in paragraphs 4 and 5 of the said
4. Further to our comments in the annexure referred to above, we
i. We have obtained all the information and explanations, which to the
best of our knowledge and belief were necessary for the purposes of our
ii. In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
iii. The Company''s Balance Sheet, Statement of Profit and Loss and Cash
Flow Statement dealt with by this report are in agreement with the
books of Account;
iv. In our opinion, the Balance Sheet and Statement of Profit and Loss
and cash flow statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956 to the extent applicable;
v. On the basis of written representations received from the Directors
and taken on record by the Board of Directors, we report that none of
the Directors are disqualified as on March 31, 2012 from being
appointed as a Director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956,
vi. In our opinion and to the best of our information and according to
the explanations given to us, the said accounts and read with the
significant accounting policies and other notes thereon, give the
information required by The Companies Act, 1956 in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) In the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March 2012,
(b) In the case of the Statement of Profit and Loss of the loss for the
year ended on that date, and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE REFERRED TO IN PARAGRAPH 3 OF OUR REPORT OF EVEN DATE.
1. (a) The Company has maintained records showing full particulars
including quantitative details and situation of Fixed Assets except in
respect of plant and machinery, office equipments and furniture and
fixtures. The management informs that the updation of fixed assets
register for the said assets is in progress.
(b) We are informed that during the year the Fixed Assets comprising of
Plant and Machinery, office equipments and furniture and fixtures
located at resorts and at head office have been physically verified by
the Management and being compared with records to ascertain
discrepancies if any and its adjustment will be done when completed. In
our view the periodicity of verification is reasonable.
(c) As per information and explanations given to us, the disposals of
fixed assets during the year were not substantial and hence it does not
affect the going concern assumption.
2. (a) The inventories have been physically verified at the end of the
year by the management. In our opinion, the frequency of verification
(b) In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the Company and nature of its business.
(c) On the basis of the records examined by us and relying on the
information provided to us, in our opinion, the Company is maintaining
proper records of inventories and no material discrepancies were
noticed on physical verification as compared to the record of
3. (a) The Company has not granted any loans secured or unsecured to
companies, firms or other parties listed in the register maintained
under section 301 of the Companies Act, 1956
(b) The Company has not taken any loan secured or unsecured from
companies firms or other parties listed in the register maintained
under Section 301 of the Companies Act, 1956.
4. In our opinion and according to the information and explanations
given to us, the internal control system are commensurate with the size
of the Company and the nature of its business for purchase of
inventory, fixed assets, sale of goods and services. During the course
of audit, we have not observed any continuing failure to correct major
weaknesses in the internal control system.
5. (a) Based on the audit procedures applied by us, to the best of our
knowledge and according to the information and explanations given to
us, the particulars of contracts or arrangements referred to in Section
301 of the Companies Act, 1956 have been entered in the register
required to be maintained under that Section
(b) Other than our observation stated in para 18 given below, there are
no transactions exceeding Rs 5 lakh in respect of any parties referred
to in the register maintained under Section 301 of the Companies Act,
1956 in the financial year.
6. In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposits from the public
We are informed by the Management that no order has been passed by the
Company Law Board or National Company Law Tribunal or Reserve Bank of
India or any Court or any other Tribunal under Sections 58A and 58AA of
the Companies Act, 1956.
7. The Company has an internal audit system commensurate with the size
of the Company and the nature of its business.
8. According to the information and explanations given to us and as
clarified under General Circular No. 67/2011 dated November 30, 2011,
the Companies (Cost Accounting Records) Rules, 2011 are not applicable
to the Company since the Company is in hospitality sector. Hence
reporting under this para does not arise.
9. (a) According to the information and explanations given to us,
there have been instances of delay in deposit of the undisputed
statutory dues including Provident Fund, Sales Tax (VAT), Service Tax,
Employees State Insurance, Luxury Tax, Professional Tax, Income Tax
(TDS) with appropriate authorities. There is no liability to remit
Wealth tax, Customs duty, Excise duty and Investor Education and
(b) According to the information and explanations given to us,
undisputed statutory dues representing Fringe Benefit Tax of Rs 101.34
lakh and Sales tax (VAT) of Rs 0.96 lakh were outstanding at the year
end for a period of more than six months from the date they became
(c) According to the information and explanations given to us and on
the basis of examination of records of the Company, the dues of income
tax/service tax as at March 31, 2012 which have not been deposited on
account of any dispute are as follows:
Name of Statute / nature of dues Period High Court
Income Tax Act, 1961 (Income Tax 2006-07 -
including penalty & interest wherever
Service Tax Rules (Service Tax 16.06.05 to 557.03**
including penalty & interest wherever 30.09.06
Name of statue / nature of dues Forum where dispute is pending
Appellate Appellate Grand Total
Tribunal $ Authority @
Income Tax Act,1961 (Income
Tax including penalty & interest
wherever applicable) 38.34 65.40 103.74
Service Tax Rules (Service Tax
including penalty & interest
wherever applicable - - 557.03
** Excludes pre deposit of Rs 30 lakh
$ Appellate Tribunal includes STAT, ITAT
@ Appellate Authority includes Commissioner Appeals, Assistant
Deputy Commissioner Appeals, and Joint Commissioner Appeals
10. The accumulated loss at the end of the financial year exceeds 50%
of net worth after including Deferred Income (other than Entitlement
Fee which is refundable in nature) as part of net worth. The Company
has incurred cash loss during the current financial year and in the
preceding financial year.
11. During the year, the Company has made one time settlement of its
dues to a Financial Institution. In our opinion and according to the
information and explanations given to us, there is no default in the
repayment of dues to the Financial Institutions/Banks.
12. According to the information and explanations given to us, the
Company has not granted any loans and advances on the basis of security
by way of pledge of shares, debentures and other securities.
13. The Provisions of Clause 4(xiii) of the Order relating to Chit
Funds are not applicable to the Company.
14. In our opinion, the Company is not dealing or trading in shares,
securities, debentures and other investments other than investing in
mutual fund units. Proper records of the transactions and contracts
have been maintained and timely entries have been made. The said
investments have been held by the Company in its own name.
15. According to the information and explanations given to us, the
Company has not given any guarantee for any loan taken by others from
any Bank or Financial Institution.
16. According to the information and explanations given to us and the
basis of examination of records, the Company has availed hire purchase
loans from banks during the year and has been used for the purpose
for which such loans have been obtained.
17. According to the information and explanations given to us, based
on an overall examination of the balance sheet of the Company, related
information made available to us and as represented to us by the
Management, funds have not been raised on short term basis during the
18. According to the information and explanations given to us, the
Company has during the year made allotment of shares to Warrant holders
on conversion of such warrants issued on preferential basis to parties
covered in register maintained under Section 301 of the Companies Act,
1956. The issue price of shares so allotted has been determined in
accordance to SEBI (Issue of Capital and Disclosure Requirements)
Regulations, 2009. Hence, it is not prejudicial to the interest of the
19. The Company has not issued debentures during the year and
therefore the question of creating security or charge in respect
thereof does not arise.
20. The Company has not made public issue of securities during the
year and therefore the question of disclosing the end-use of money
raised by way of public issue does not arise.
21. Based on the audit procedures performed and on the basis of
representation obtained from the management, we report that no instance
of fraud on or by the Company, have been noted or reported by the
management, during the year.
For V. SANKAR AIYAR & CO For R.SUBRAMANIAN AND COMPANY
Chartered Accountants, Chartered Accountants,
ICAI Regd.No 109208W ICAI Regd.No 004137S
M.No: 023116 M.No: 011072
Date: May 29, 2012