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Stone India Ltd.

BSE: 522085 | NSE: | Series: NA | ISIN: INE290C01015 | SECTOR: Electric Equipment

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Sep 10, 15:40
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Stone India is not traded on BSE in the last 30 days

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Stone India is not listed on NSE

Annual Report

For Year :
2016 2015 2014 2013 2012 2011 2010 2009 2008

Auditor's Report

We have audited the accompanying financial statements of Stone India Limited (the Company) which comprise the Balance Sheet as at 31st March, 2014, 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 Management is responsible for 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 211(3C) of the Companies Act, 1956 (the Act) read with the General Circular 15/ 2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control 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. Auditors'' Responsibility Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 auditors'' 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 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. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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 qualified audit opinion. Basis for Qualified Opinion (a) In respect of Rental demands from Kolkata Port Trust on the Company amounting to Rs. 228.97 lacs, pending decision of the Court exact status of the liability and amount payable has not been ascertained; (Note 6A(b)) (b) Payment of managerial remuneration amounting to Rs.186.75 lacs (including Rs.111.58 lacs for the year) is subject to approval of the Central Government; (Note 23(a)) (c) Stocks lying at different locations as stated in the Note 14(c) are under reconciliation. Pending this, the provision of Rs. 250 lacs has been made, the adequacy of which and consequential adjustments arising in this respect cannot be ascertained and commented upon by us; (d) Revenue recognition shortfall against advances of Rs.1006.99 lacs and investment of Rs.1 lac to a subsidiary in respect of a project undertaken by it, pending implementation thereof, has presently not been ascertained; (Note 13(b)) (e) Certain debit/credit balances including certain overdue balance of debtors as given in the Note 15(b) are subject to confirmation/ reconciliation and the consequential adjustments thereof has not been determined; (Note 27) (f) Details regarding Micro, Small and Medium Enterprise are not available and as such required disclosure in this respect could not be given; (Note 8(a)) (g) Advances include Rs.104.36 lacs under investigation, impact whereof as such could not be commented upon pending completion of proceedings. (Note 17(b)) Qualified Opinion In our opinion and to the best of our information and according to the explanations given to us, except for the matter described in the Basis for Qualified Opinion paragraph effects whereof cannot be ascertained and commented upon, 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: (a) in the case of the Balance sheet, of the state of affairs of the Company as at 31st March 2014; (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. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor''s Report) Order, 2003 as amended by the Companies (Auditor''s Report Order, 2004) (the Order) issued by the Central Government of India in terms of Section 227 (4A) of the Act and according to the information and explanations given to us and also on the basis of such checks as we considered appropriate, we enclose in the Annexure a statement on the matters specified in the said order. 2. As required under provisions of section227(3) of the Companies Act, 1956, we report that: a. We have obtained all the information and explanations which to the best of 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 the Company so far as 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. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement comply with the Accounting Standards referred to in Section 211 (3C) of the Act read with the General Circular 15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; e. On the basis of written representations received from the directors as on 31st March 2014, and taken on record by the Board of Directors, none of the directors, is disqualified as on 31 March 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956. Annexure to the Independent Auditor''s Report (Referred to in paragraph under Report on Other Legal and Regulatory Requirements of the report of even date.) i) a) The Company has maintained proper records to show full particulars including quantitative details and situation of its fixed assets. b) The fixed assets of the Company are physically verified by the management over a phased manner, which we consider reasonable considering the size of the Company and nature of its assets. As explained, such verification has been carried out by the management. However, the necessary reconciliation with the book records was yet to be completed and discrepancies if any in this respect as such was not ascertainable. (c) In our opinion, during the year, the company has not disposed off substantial part of its fixed assets. ii) a) The inventory except those lying with third parties has been physically verified by the management during the year. In our opinion and according to the information and explanations given to us, the frequency of verification, wherever carried out, is reasonable. In respect of stock lying with third parties confirmations were obtained. b) In our opinion, excepting as given herein above, 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) The Company has maintained proper records of its inventory except for stocks lying with third parties. Pursuant to an exercise for verification and reconciliation thereof initiated in the previous year, even though carried out to a substantial extent, the reconciliation and required adjustment with respect to stock lying with third parties and those at certain location were in progress at year end. Pending completion of the entire exercise, a provision of Rs.250 lacs as given in the Note 14(c) has been made in this respect. Consequential adjustment against respective inventory items, as explained, will be given effect to on determination thereof. iii) Except for the advances on account of various costs incurred for undertaking Rail Runner and Bio-toilet project by two subsidiaries, as per the records of the company, it has not taken/granted any loans, secured or unsecured, to any companies, firms or other parties covered in the Register maintained under Section 301 of the Act. Advances given to subsidiaries for undertaking the said projects are in the nature of contribution towards the project and is therefore long term and strategic in nature and there are no terms of repayment etc. in this respect. The aggregate amount of advances given to subsidiaries outstanding at the year end and the maximum amount outstanding thereof at any time during the year were Rs. 1125.23 lacs and Rs. 1156.75 lacs respectively. Pending implementation of the project especially the rail runner project (Note 13(b)), it is not possible to comment whether these are prima facie prejudicial to the interest of the Company. iv) Having regard to the fact that comparative quotations are not available for purchase of certain items of components during the year, in our opinion and according to the information and explanations given to us there are adequate internal control procedures commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal controls. v) (a) According to the information and explanations provided to us, particulars of the contracts or arrangement referred to in Section 301 of the Act have been entered in the register maintained under that section. (b) In our opinion and according to the information and explanations given to us, the transactions made in pursuance of contracts or arrangements entered into the register maintained under Section 301 of the Act and exceeding five lacs in respect of any party during the year, have been made at prices which are reasonable having regard to the prevailing market prices at the relevant time. vi) The Company has not received or accepted any deposits during the year. vii) Internal audit of the Company has been carried out by independent firm of Chartered Accountants in phased manner to cover all key areas over the period of two to three years. Except to the extent that coverage of areas and frequency thereof need to be extended, the internal audit system followed presently is reasonable considering the the size and nature of the business of the Company. viii) On the basis of the records produced, we are of the opinion that prima facie the cost records and accounts prescribed by the Central Government under section209 (1) (d) of the Companies Act, 1956 have been maintained. However, we have not carried out any detailed examination of such records with a view to determine whether they are accurate or complete. ix) a) According to the information and explanations given to us and as per the records of the Company, the Company except for Employees'' State Insurance as mentioned in the Note 9(b) of the financial statements, tax deducted at source, excise duty, Professional Tax and sales tax where there were delays in depositing the dues to appropriate authorities is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Professional Tax, Wealth tax, Custom Duty, Cess and other material statutory dues applicable to it. However, according to the information and explanations given to us, except those given below, there is no undisputed amounts payable in respect of these which were in arrears, as at 31st March 2014 for a period of more than six months from the date they became payable. Name of Statute TYPE AMOUNT (Rs. In Lacs) The Central Excise Service Tax 3.51 Act 1944 The Employees'' Accumulated 36.10 Provident Fund & shortfall MP Act,1952 (Note 30(i)(a) of financial statements) b) According to information and explanations given to us, there are no dues of Sales Tax, Income Tax, Customs Duty, Wealth Tax, Excise Duty and Cess which have not been deposited on account of any dispute except as given below: Statute Nature Forum where Period to Amount of Tax dispute is which in Rs. pending related Lacs West Bengal Sales Tax Revisional 2004-05 14.30 Sales Tax Board Act, 1995 West Bengal Sales Tax Additional 2008-09 21.98 Value Added Commissioner Tax, 2003 Central Sales Sales Tax Revisional 2003-04, 31.68 Tax Act, 1954 Board 2004-05 and 2005-06 Central Sales Sales Tax Additional 2006-07 23.72 Tax Act, 1954 Commissioner Central Sales Sales Tax Additional 2008-09 3.22 Tax Act, 1954 Commissioner Central Excise Service Tax Appeal to be 2005 to 41.03 Act, 1944 filed in 2010 CESTAT, Kolkata x) Without considering the matter described in the Basis for Qualified Opinion paragraph effects whereof cannot be ascertained and commented upon, the Company does not have any accumulated losses at the end of the financial year. The Company has incurred cash losses in the current and immediately financial year. xi) According to the information and explanation given to us, the Company has not defaulted in repayment of dues to banks and financial institutions. xii) The company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and other securities. xiii) In our opinion, the company is not a chit fund or a nidhi mutual benefit fund/society. Therefore the provision of clause 4(xiii) of the said order is not applicable to the company. xiv) The Company is not dealing / trading in securities. xv) According to information and explanations given to us, the company has not given any guarantee for loans taken by others from banks or financial institutions. xvi) As per the information and explanations given to us and based on the documents and records produced to us no term loan has been raised during the year. xvii) According to the information and explanations given to us and on overall examination of the Balance Sheet of the company, we report that short term funds to the extent of Rs. 221.01 lacs have been used for long-term investments. xviii) The Company as given in the Note 3B has issued warrants on preferential basis to company covered in the register maintained under Section 301 of the Companies Act, entitling them to obtain allotment of equity shares of the Company. These warrants have been issued at the price determined as per the regulations of Securities and Exchange Board Of India, in our opinion this is not prejudicial to the interest of the Company. xix) The Company does not have any outstanding debentures during the year. xx) The Company has not raised any money through a public issue during the year. xxi) Attention is invited to the Note 17(b) regarding defalcation of company''s fund which is under investigation. Necessary steps including suspension of an employee, so far identified, have been taken and as explained further administrative and other course of action including recovery of the amount involved are in the process. Excepting this, during the course of our examination of books of accounts carried out in accordance with generally accepted auditing practices in India, we have neither come across any incidence of fraud on or by the company nor have we been informed of any such case by the management. For Lodha & Co. Chartered Accountants Firm ICAI Registration No. :301051E R. P. Singh Place : Kolkata Partner Date : 30th May, 2014 Membership No. 52438