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Sterling Powergensys Ltd.

BSE: 513575 | NSE: | Series: NA | ISIN: INE067E01013 | SECTOR: Engineering - Heavy

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Sterling Powergensys is not traded on BSE in the last 30 days

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Annual Report

For Year :
2015 2014 2013 2012 2011 2010 2009 2008 2007

Auditor's Report

We have audited the accompanying financial statements of STERLING POWERGENSYS LIMITED (the Company), which comprise the Balance Sheet as at March 31st, 2015, and the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information. Management''s Responsibility for the Financial Statements The Company''s Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act 2013 (the ''Act'') with respect to the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor''s Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We have conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal financial control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company''s Directors, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion. Basis for Qualified Opinion 1) Company is subject to interest liability on unpaid statutory dues and on other dues, the same has neither been paid or provided or quantified. 2) In respect of accounting of Gratuity for the employees, no provision has been made in Accounts for the same which is in contradiction to AS 15 - Employee Benefits issued by The Institute of Chartered Accountants of India. 3) In respect of deduction and contribution to Provident Fund for the employees, Company has not complied with the requirement of The Employees'' Provident Funds and Miscellaneous Provisions Act, 1952. 4) Loans and advances to and from suppliers, others, sundry debtors and creditors are unconfirmed/unreconciled. 5) We are unable to quantify the effect of the above facts for want of relevant information and the effect thereof on the financials for the year ended 31st March, 2015. Qualified Opinion In our opinion and to the best of our information and according to the explanations given to us except for the effects of the matter described in the ''Basis for Qualified Opinion'' paragraph above, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2015 and its loss and its cash flows for the year ended on that date. Report on Other Legal and Regulatory Requirements: 1. As required by the Companies (Auditor''s Report) Order, 2015 (the Order) issued by the Central Government of India in terms of sub-section (11) of section143 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable. 2. As required by section143(3) of the Act, we report that: a) We have sought and except for matters described in Basis for Qualified Opinion paragraph, obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; b) Except for the effects of the matter described in the basis for qualified opinion paragraph above, 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 those books c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with by this Report are in agreement with the books of account. d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid financial statements comply with the accounting standards specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. e) The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company. f) On the basis of written representations received from the directors as on March 31, 2015 and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2015, from being appointed as a director in terms of section 164 (2) of the Act. g) The qualification relating to non-provision of interest liability on statutory dues and non-confirmation of loans and advances, sundry debtors, creditors etc., non-compliance of AS-15 on Employee benefits and The Employees'' Provident Funds and Miscellaneous Provisions Act, 1952 are stated in the Basis for Qualified Opinion paragraph above. 3. In our opinion and to the best of our information and according to the explanations given to us, we report as under with respect to other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014: i) The Company has disclosed the amount of pending litigations on its financial position in Note-26 to the Financial Statements which is in the nature of contingent liability being not required to be provided in the accounts. ii) The Company does not anticipate any material foreseeable losses, on long- term contracts. iii) There were no amounts which were required to be transferred to the Investor Education and Protection Fund. ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT (i) (a) The Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets. (b) All the fixed assets, have been physically verified by the management during the year and no discrepancies were noticed on such verification (ii) (a) In our opinion, physical verification of inventory lying with the company has been conducted at reasonable intervals by the management. (b) In our opinion, the procedures of physical verification of inventory followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business. (c) In our opinion, the Company has maintained proper records of inventory. As explained to us, no discrepancies were noticed on physical verification as compared to the book records. (iii) The Company has not granted any loan, secured or unsecured, to companies, firms or other parties covered in the register maintained under Section 189 of the Companies Act, 2013 and hence, the provisions of clauses iii (a) and (b) of paragraph 3 of the Companies (Auditor''s Report) Order, 2015 are not applicable to the Company. (iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control system commensurate with the size of the company and the nature of its business with regard to purchase of inventory, fixed assets and sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in the internal control systems in respect of the aforesaid areas. (v) The Company has not accepted any deposits from the public within the meaning of Sections 73 to 76 of the Act and the rules framed thereunder to the extent notified. (vi) The Central Government of India has not prescribed the maintenance of cost records under subsection (1) of Section 148 of the Act for any of the activities of the Company. (vii) According to the records of the Company, examined by us and information and explanations given to us: (a) The company is generally irregular in payment of undisputed statutory dues including provident fund, income tax, sales tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and others as applicable with the appropriate authorities. The undisputed amounts payable in respect of aforesaid dues outstanding as at 31 March 2015 for a period of more than six months from the date they became payable are as follows: Year Lease CST Gujarat VAT Tax Deducted Tax at Source 2014-15 - 7 7 1,71,543 2013-14 - - - - 2012-13 - - - - 2011-12 - - 27,06,353 - 2004-05 - 1,45,486 - - 1998-99 19,812 - - - 1997-98 39,624 - - 99,196 1996-97 - - - 1,72,111 Total 59,436 1,45,486 27,06,353 4,42,850 Year Service Tax Professon Provident Works Tax Fund Contract Tax 2014-15 37,294 12,225 2 12 2013-14 11,28,799 - - - 2012-13 - - 28,089 - 2011-12 - - - - 2004-05 - - - - 1998-99 - - - - 1997-98 - - - - 1996-97 - - - - Total 11,66,093 12,225 28,089 12 The above details do not include the amount due for payment, quantum of which is not ascertained, under sales tax deferral scheme as shown under Other Long Term Liabilities amounting to Rs. 2,44,46,488/- (b) According to the records of the Company, the dues of Sales tax which are not deposited on account of any dispute are as under: Name of the Nature of the Dues Amount (Rs.) Statute Bombay Sales Interest and Penalty Tax Act, 1959 on BST 21,79,193 Central Sales Tax Interest and Penalty Act, 1956 on CST 21,83,693 Name of the Period to which Forum where Statute the amount dispute is pending Bombay Sales Deputy Commissioner of Tax Act, 1959 1995-2003 Sales Tax (Appeals) Central Sales Tax Deputy Commissioner of Act, 1956 1995-2003 Sales Tax (Appeals) (c) According to the information and explanations given to us, there were no amounts which were required to be transferred to the investor education and protection fund in accordance with the relevant provision of the Act and rules there under. (viii) The company has accumulated losses as on 31st March 2015, which is more than 50% of its net- worth. Further, it has incurred cash loss during the financial year but not in the immediately preceding financial year. (ix) The Company has not defaulted in repayment of dues to banks during the year under audit. (x) The company has not given guarantee in respect of loans taken by others. Accordingly the provisions of clause iii (x) of paragraph 3 of the Companies (Auditor''s Report) Order, 2015 are not applicable. (xi) In our opinion, the term loans have been used for the purpose for which the same were obtained. (xii) Based on the audit procedures performed and according to the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year. For GMJ & Co. Chartered Accountants Firm''s Reg. No. 103429W CA Atul Jain Partner M. No. 037097 Place: Mumbai Date: 9th May, 2015