| We have audited the accompanying standalone financial statements of
STEWARTS & LLOYDS OF INDIA LIMITED ("the Company"), which comprise the
Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss,
the Cash Flow Statement for the year then ended, and a summary of the
significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone 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 principles
generally accepted in India, including the Accounting Standards
specified under 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 standalone
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 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 the 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 of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the 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 on the standalone
financial statements.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone 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 31st March, 2015, and its loss and its cash flows for the year ended
on that date.
Emphasis of Matters
We draw attention to the following matters in the Other Notes to the
financial statements:
a) Note nos 24.3 (b) to 24.3 (f) to the financial statements which
describes the uncertainty related to the outcome of the arbitration
proceeding in respect of dispute with IOC-Bongaigaon, BVFCL,- Namrup
Revamp Project, Neyveli Lignite Corporation, Konkola Copper Mines,
Zambia, claims by sub-contractors, demand from Kolkata Port Trust for
lease rent respectively.
b) Note no 24.14 to the financial statements regarding the financial
statements being prepared on a going concern basis, notwithstanding the
fact that the Company has accumulated losses of Rs.48.20 Crores as on
31st March, 2015 and its net worth has been fully eroded (negative by
Rs 36.22 crores). These conditions indicate the existence of material
uncertainty that may cast significant doubt about the Company's ability
to continue as a going concern. However, the financial statements of
the Company have been prepared on going concern basis for the reasons
stated in the said Notes. However, the appropriateness of the said
basis is inter alia dependent on the Company's ability to realize its
assets and to discharge its liabilities out of surplus generated.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 20l5 ("the
Order"), issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Companies Act, 2013 ("the Act"),
and on the basis of such checks as we considered appropriate and
according to the information and explanations given to us, we give in
the Annexure a statement on the matters specified in paragraphs 3 and 4
of the said order.
2. As required by Section 143 (3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
b) 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, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account.
d) In our opinion, the aforesaid standalone 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 going concern matter described in sub-paragraphs (a) & (b) under
the Emphasis of Matters paragraph above , in our opinion, may have an
adverse effect on the functioning of the Company.
f) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act.
g) With respect to the other matters to be included in the Auditor's
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 the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 24.3 to the
financial statements.
ii. The Company did not have any long term contracts including
derivative contracts for which there were any material foreseeable
losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
ANNEXURE TO AUDITORS' REPORT
Referred to in paragraph 1 of the Auditors' Report on "Other Legal and
Regulatory Requirements" of even date to the members of 'STEWARTS &
LLOYDS OF INDIA LIMITED' on the financial statements for the year ended
31st March, 2015.
i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets;
b) All the assets have not been physically verified by the management
during the year. As explained to us there is a programme of
verification which in our opinion needs to be further strengthened. The
management has further explained that discrepancies noticed on such
verification, which were not material, have been properly dealt with in
the books of accounts. However, documentary evidences for such
adjustments could not be produced to us for checking.
ii) a) The inventory has been physically verified and certified by the
management at the year-end. In our opinion, the frequency of
verification is reasonable.
b) In our opinion and as explained to us, the procedures of physical
verification of inventory followed by the management are generally
reasonable and adequate in relation to the size of the company and the
nature of its business.
c) On the basis of our examination of the inventory records, in our
opinion, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to book records were not material.
iii) On the basis of examination of books of account of the Company and
on the basis of information and explanations given to us, the company
has not granted any loans, secured or unsecured to companies, firms or
other parties covered in the register maintained under section 189 of
the Act. Therefore, clauses (iii)(a) to (iii)(b)ofthe aforesaid order
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, for the
purchase of inventory and fixed assets and for the sale of services.
Further, on the basis of our examination of the books and records of
the Company and according to the information and explanations given to
us, we have neither come across nor have been informed of any
continuing failure to correct major weaknesses in aforesaid internal
control system.
v) The Company has not accepted any deposits from public during the
year, within the meaning of the directives issued by the Reserve Bank
of India and the provisions of sections 73 to 76 or any other relevant
provisions of the Companies Act and the rules framed there under.
Moreover, no order has been passed by Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any other court or
tribunal.
vi) The Central Government has not specified maintenance of cost
records under sub-section (l) of section 148 of the Companies Act for
any of the products of the Company.
vii) a) According to the information and explanations given to us and
from the records of the company examined by us, the Company has
generally been regular in depositing undisputed statutory dues
including provident fund, employees' state insurance, income-tax,
sales-tax, wealth tax, service tax, duty of customs, duty of excise,
value added tax, cess and any other statutory dues with the appropriate
authorities. However, arrears of outstanding for more than six months
was observed in respect of Professional Tax for Rs 8,640/- and in
respect of Work Contract Tax for Rs 13,145/-.
b) On the basis of checking of records of the Company and on the basis
of information and explanations given to us, the particulars of dues of
income tax or sales tax or wealth tax or service tax or duty of customs
or duty of excise or value added tax or cess as at Balance Sheet date
which have not been deposited on account of any dispute are given in
Appendix-1.
c) On the basis of checking of books of accounts of the Company and
according to the information and explanations given to us, the amount
required to be transferred to investor education and protection fund in
accordance with the relevant provisions of the Companies Act, 1956 (1
of 1956) and rules made there under has been transferred to such fund
within time.
viii) The accumulated losses of the Company at the end of the financial
year were not less than fifty per cent of its net worth .The Company
has incurred cash losses during the financial year and in the
immediately preceding financial year.
ix) On the basis of records of the Company examined by us and according
to the information and explanations given to us by the management, the
Company had defaulted in repayment of loans and interest to banks.
Total amount of unpaid overdue interest and loan amount to banks
aggregated to Rs 47,59,76,797.39 (including invoked Bank Guarantees).
The over due amount relate to the financial years 2012-13, 2013-14,
2014-15. However the same has been repaid by the Company to all banks
during the current year through One Time Settlement with lender banks.
x) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from bank or financial institutions during the year.
xi) The Company has not obtained any term loan during the year.
xii) During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India and according to the information and
explanations given to us, we have neither come across any instance of
fraud on or by the company noticed or reported during the year nor have
we been informed of any such case by the management.
For RAY & RAY
Chartered Accountants
Firm's Registration No. 301072E
Amitava Chowdhury
Place : Kolkata Partner
Date: 5th May, 2015 Membership No. 56060 | 