| REPORT ON FINANCIAL STATEMENTS
We have audited the accompanying fnancial statements of STERLING
HOLIDAY RESORTS (INDIA) LIMITED which comprise of the Balance Sheet as
at March 31, 2014, Statement of Proft & Loss and Cash Flow Statement
for the year then ended and a summary of signifcant accounting policies
and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Management is responsible for the preparation of these fnancial
statements that give a true and fair view of the fnancial position,
fnancial performance and cash fows of the Company in accordance with
the Accounting Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act"). The responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the fnancial 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 fnancial
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 fnancial statements are free of
material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the fnancial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the fnancial 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 fnancial 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 control. 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 fnancial statements.
We believe that the audit evidence we have obtained is suffcient and
appropriate to provide a basis for our audit opinion.
OPINION
In our opinion and to the best of our information and according to the
explanations given to us, the fnancial 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 March 31, 2014;
b) in the case of the Statement of Proft and Loss, of the loss for the
year ended on that date; and
c) in the case of Cash Flow Statement, of the cash fows 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 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Act, we give in the annexure a
statement on the matters specifed in the paragraphs 4 and 5 of the said
Order.
2. As required by Section 227(3) of the Act, 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 Proft 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 Proft and Loss and
Cash Flow Statement comply with the Accounting Standards referred to in
sub-section (3C) of Section 211 of the Companies Act, 1956.
(e) On the basis of written representations received from the directors
as on March 31, 2014 and taken on record by the Board of Directors,
none of the directors is disqualifed as on March 31, 2014 from being
appointed as a director in terms of clause (g) of sub-section (1) of
Section 274 of the Companies Act, 1956.
1. (a) The Company has maintained proper records showing full
particulars including quantitative details and situation of Fixed
Assets.
(b) Fixed Assets are physically verifed by the management at reasonable
intervals. In our opinion, the frequency of verifcation is reasonable
having regard to the size of the Company and nature of its assets. No
material discrepancies as compared to book records were noticed on such
verifcation.
(c) Since the disposal of fxed assets during the year is not
substantial, the preparation of fnancial statements on a going concern
basis is not affected on this account.
2. (a) The inventories have been physically verifed by the management
during the year. In our opinion, the frequency of verifcation was
reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures for physical verifcation of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and nature of its business.
(c) In our opinion, the Company has maintained proper records of
inventory. The discrepancies between the physical stocks and the book
stocks were not material and have been properly dealt with in the books
of account.
3. (a) The Company has not granted any loans secured or unsecured to
companies, frms or other parties listed in the register maintained
under Section 301 of the Companies Act, 1956.
(b) The Company has taken unsecured loan of INR 2 crores from one
company listed in the register maintained under Section 301 of the
Companies Act 1956.
(c) The terms and conditions of such loan are not prima facie
prejudicial to the interest of the company. The payment of interest has
been regular.
(d) The maximum amount outstanding at any time during the year was INR
2 crores. The loan taken has been fully repaid during the year.
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, fxed 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
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 and
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of INR 5 lakhs, during
the year, have been made at prices which are reasonable having regard
to the prevailing market price at the relevant time.
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
clarifed under General Circular No. 67/2011 dated 30th Nov. 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, the
Company is generally regular in depositing the undisputed statutory
dues in respect of Income Tax, luxury Tax, Wealth Tax, Service Tax,
VAT, Provident Fund, Employees State Insurance and Customs Duty. There
is no liability to remit Excise duty and Investor Education and
Protection Fund. According to the information and explanations given to
us, except for the undisputed statutory dues representing Fringe Beneft
Tax of INR 73.12 lakhs, no other Statutory Dues were outstanding at the
year end for a period of more than six months from the date they became
payable.
b. According to the information and explanations given to us and on the
basis of examination of records of the Company the dues of luxury Tax /
Service Tax as at March 31, 2014 which have not been deposited on
account of any dispute are as follows:
10. The accumulated loss at the end of the fnancial year does not
exceed 50% of net worth inclusive of "Deferred income" (other than
"Entitlement Fee" which is refundable in nature). The company has
incurred cash loss during the Current fnancial year and in the
preceding fnancial year.
11. On the basis of verifcation of records and according to the
information and explanations given to us, the Company has not defaulted
in the repayment of dues to 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 Company is not a chit fund or a nidhi or mutual fund society.
Therefore, the provisions of sub-para (xiii) of para 4 of the order 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 have been maintained in respect of
these mutual fund investments and timely entries have been made
therein. The investments have been held by the Company in its own name
except to the extent of exemption granted under Section 49 of the Act.
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. In our opinion, the term loans availed has been utilised for the
purpose for which they were raised.
17. According to the information and explanations given to us, based
on an overall examination of the balance sheet of the Company and
related information made available, we report that funds raised on
short-term basis have not been used for long-term investments.
18. According to the information and explanations given to us, the
preferential allotment of shares made during the year are not made to
parties covered under Register maintained under Section 301 of the Act.
19. During the year, the Company has not issued any secured debentures
and accordingly no securities were required to be created.
20. During the year, the company has not raised any money by public
issue. Therefore, the requirement of disclosure by the Management on
the end use of money raised by public issue and verifcation of the same
is not applicable.
21. Based upon the audit procedures performed for the purpose of
reporting the true and fair view of the fnancial statements and as per
the information and explanations given to us by the Management, no
material fraud on or by the Company has been noticed or reported during
the course of our audit.
For V.Sankar Aiyar & Co For R.Subramanian & Co.
Chartered Accountants Chartered Accountants
ICAI regd. No. 109208W ICAI regd. No. 004137S
S. Venkataraman A. S. Ramanathan
Partner Partner
Membership No.: 023116 Membership No.: 011072
Place: Chennai
Date: April 26, 2014
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