Notes to Accounts of Sterling Powergensys Ltd.

Mar 31, 2024

2.12 Provisions and contingent liabilities

A provision is recognised when the Company has a present obligation as a result of past events and it is probable that an outflow of resources will be required to settle the obligation in respect of which a reliable estimate can be made. If effect of the time value of money is material, provisions are discounted using an appropriate discount rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Contingent liabilities are disclosed in the Notes to the financial statements. Contingent liabilities are disclosed for:

i) possible obligations which will be confirmed only by future events not wholly within the control of the Company or

ii) present obligations arising from past events where it is not probable that an outflow of resources will be required to settle the obligation or a reliable estimate of the amount of the obligation cannot be made.

2.13 Employee Benefits

Short-term obligations

Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably.

Post-employment obligations

The Company operates the following post-employment schemes:

(a) defined benefit plans such as gratuity; and

(b) defined contribution plans such as provident fund.

Defined Benefit Plans

The Company''s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

The Company''s net obligation in respect of defined benefit plans is calculated separately for each plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets.

Remeasurement of the net defined benefit liability, which comprise actuarial gains and losses and the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in other comprehensive income (OCI). Net interest expense (income) on the net defined liability (assets) is computed by applying the discount rate, used to measure the net defined liability (asset). Net interest expense and other expenses related to defined benefit plans are recognised in Statement of Profit and Loss. When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognised immediately in Statement of Profit and Loss. The Company recognises gains and losses on the settlement of a defined benefit plan when the settlement occurs.

Defined contribution plan

Obligations for contributions to defined contribution plans are expensed as the related service is provided and the Company will have no legal or constructive obligation to pay further amounts. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

Termination benefits

Termination benefits are recognised as an expense when the Company is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination benefits as a result of an offer made to encourage voluntary redundancy. Termination benefits for voluntary redundancies are recognised as an expense if the Company has made an offer encouraging voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably.

Other long-term employee benefit obligations

The Company''s current policies permit certain categories of its employees to accumulate and carry forward a portion of their unutilised compensated absences and utilise them in future periods or receive cash in lieu thereof in accordance with the terms of such policies.

The Company measures the expected cost of accumulating compensated absences as the additional amount that the Company incurs as a result of the unused entitlement that has accumulated at the balance sheet date. Such measurement is based on actuarial valuation as at the balance sheet date carried out by a qualified actuary.

2.14 Earnings per share

Basic earnings per share is computed by dividing the profit / (loss) after tax by the weighted average number of equity shares outstanding during the year. The weighted average number of equity shares outstanding during the year is adjusted for the events for bonus issue, bonus element in a rights issue to existing shareholders, share split and reverse share split (consolidation of shares).

Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend, interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the weighted average number of equity shares considered for deriving basic earnings per share and the weighted average number of equity shares which could have been issued on conversion of all dilutive potential equity shares.

2.15 Operating cycle

Based on the nature of products / activities of the Company and the normal time between acquisition of assets and their realization in cash or cash equivalents, the Company has determined its operating cycle as 12 months for the purpose of classification of its assets and liabilities as current and non-current.

2.16 Cash and cash equivalents

Cash and cash equivalents include cash in hand, bank balances and any deposits with original maturities of three months or less (that are readily convertible to known amounts of cash and cash equivalents and subject to an insignificant risk of changes in value). However, for the purpose of the statement of cash flows, in addition to above items, any bank overdrafts / cash credits that are integral part of the Company''s cash management, are also included as a component of cash and cash equivalents.

36 FINANCIAL RISK MANAGEMENT

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Market risk; and

- Liquidity risk

The Company’s Board of Directors has overall responsibility for the establishment and oversight of the Company''s risk management framework. The Board of Directors along with the top management are responsible for developing and monitoring the Company’s risk management policies.

The Company’s risk management policies are established to identify and analyse the risks faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are monitored & reviewed periodically to reflect changes in market conditions and the Company’s activities. The Company, through its training, standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The key risks and mitigating actions are placed before management of the Company who then evaluates and takes the necessary corrective action.

[A] Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instruments fails to meet its contractual obligations, and arises principally from the Company''s receivables from customers, cash and cash equivalents, deposits with banks and other financial instruments measured at amortised cost.

The carrying amounts of financial assets represents maximum credit risk exposure. Credit risk is managed through credit approvals, establishing credit limits and continuously monitoring the creditworthiness of customers to which the Company grants credit terms in the normal course of business. The Company establishes an allowance for doubtful debts and impairment that represents its estimate of incurred losses in respect of trade and other receivables and deposits.

However, the credit risk arising on cash and cash equivalents and bank deposits is limited as the Company invest in deposits with banks and financial institution with credit ratings and strong repayment capacity.

Trade receivables

The Company''s exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the customer,

Expected credit loss assessment

The Company allocates each exposure to a credit risk grade based on a variety of data that is determined to be predictive of the risk of loss (e.g. timeliness of payments, available press information etc.) and applying experienced credit judgement.

Exposures to customers outstanding at the end of each reporting period are reviewed by the Company to determine incurred and expected credit losses. Historical trends of impairment of trade receivables do not reflect any significant credit losses. Given that the macroeconomic indicators affecting customers of the Company have not undergone any substantial change, the Company expects the historical trend of minimal credit losses to continue.

Cash and cash equivalent

As at the year end, the Company held cash and cash equivalents of Rs. 50,28,409/- (31.03.2023 - Rs. 2,81,159/-). The cash and cash equivalents are held with banks with good credit rating.

Other bank balances

Other bank balances are held with banks with good credit rating.

Investments

The Company limits its exposure to credit risk by generally investing in fixed deposits of counterparties that have a good credit rating. The Company does not expect any losses from non-performance by these counter-parties.

Other financial assets

Other financial assets are neither past due nor impaired.

[B] Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company''s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Company''s reputation.

The Company regularly monitors the rolling forecasts to ensure it has sufficient cash on an on-going basis to meet operational needs. The Company has obtained fund and non-fund based working capital lines from various banks. Any short term surplus cash generated, over and above the amount required for working capital management and other operational requirements, is retained as cash and cash equivalents (to the extent required) and any excess is invested in interest bearing term deposits with appropriate maturities to optimise the cash returns on investments while ensuring sufficient liquidity to meet its liabilities.

Maturities of financial liabilities

The following table shows the maturity analysis of the Company''s financial liabilities based on contractually agreed undiscounted cash flows along with its carrying value as at the Balance Sheet date.

[C] Market risk

Market risk is the risk that changes in market prices - such as foreign exchange rates and equity prices - will affect the Company''s income or the value of its holdings of financial instruments. The Company is exposed to market risk primarily related to foreign exchange rate risk. Thus, our exposure to market risk is a function of revenue generating and operating activities in foreign currency. The objective of market risk management is to avoid excessive exposure in our foreign currency revenues and costs.

(B) FAIR VALUE HEIRARCHY

Fair value is the amount for which an asset could be exchanged, or a liability settled between knowledgeable willing parties in an arm''s length transaction. The Company has made certain judgements and estimates in determining the fair values of the financial instruments that are (a) recognised and measured at fair value and (b) measured at amortised cost and for which fair values are disclosed in the financial statements.

To provide an indication about the reliability of the inputs used in determining fair value, the Company as classified the financial instruments into

Level 1: Quoted prices (unadjusted) in active markets for identical assets or liabilities. This includes mutual funds and listed equity instruments that have quoted price. The mutual funds are valued using the closing NAV.

Level 2: Level 2 hierarchy includes financial instruments that are not traded in an active market is determined using valuation techniques which maximise the use of observable market data and rely as little as possible on entity-specific estimates.

(C) VALUATION TECHNIQUES

Specific valuation techniques used to value financial instruments include

- the use of quoted market prices for mutual funds

- the use of quoted market prices for equity instruments

There are no items in the financial instruments, which required level 3 valuation.

37 CAPITAL MANAGEMENT

Equity share capital and other equity are considered for the purpose of Company''s capital management.

The Company manages its capital so as to safeguard its ability to continue as a going concern. The capital structure of the Company is based on management''s judgement of its strategic and day-to-day needs with a focus on total equity so as to maintain investor, creditors and market confidence.

The management and the Board of Directors monitors the return on capital as well as the level of dividends to shareholders. The Company may take appropriate steps in order to maintain, or if necessary adjust, its capital structure.

In terms of our report attached. For and on behalf of the Board of Directors

For Doshi Maru & Associates Chartered Accountants FRN No. 112187W

Sd/- Sd/-

Atul B. Doshi S. Venkata Subramanian Rajalakshmi Venkat

Partner Chairman Director

Mem No.: 102585 DIN: 00107561 DIN: 00107754

Sd/- Sd/-

Place : Mumbai Pundalik Davane CS Gaurav Kaushik

Date : 06/05/2024 CFO Company Secretary

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Mar 31, 2015

1. Contingent Liability

Amount in Rs.

As at As at Particulars 31st March, 31st March, 2015 2014

Interest and Penalty on Sales tax* 43,62,886 43,62,886

* The company has taken the benefit of Sales Tax Deferral Scheme for deferment of sales tax of Rs. 2,44,46,488/- shown as other long term liabilities (Refer Note 5). The Department of Sales Tax has not allowed the deferment of sales tax amounting to Rs. 49,60,184/- and has levied interest and penalty on the same.

2. The Company has no amount due to suppliers under the Micro, Small and Medium Enterprises Note:27 Development Act, 2006 (MSMED Act) as at 31 March 2015.

3. In the opinion of t he Board the current assets, loans and advances, balances of which are su bject to confirmation by respective parties and are outstanding for long time, if realized in the ordinary course of business have value on realization at least to the amount at which they are stated in the Balance Sheet.

The provision for all known liabilities subject to confirmation by respective parties are adequate and not in excess of amount reasonably necessary.

4. In view of BIFR approval of Revival scheme dated 07.04.2011, Company has neither paid nor provided interest liability on unpaid statutory dues and liability of interest thereon has not also been ascertained.

5. Related Party Disclosure

Key Management Personnel (KMP)

Mr. S. Venkat Subrmanian Chairman

Mr. Deepak S. Shah (resigned on 29.01.2015) Managing Director

Mr. Ranjit C. Singh (w.e.f. 06.02.2015) Managing Director

6. The figures of previous year have been regrouped or rearranged wherever necessary/practicable to con form to current year's presentation as per Schedule III to the Companies Act 2013.

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Mar 31, 2014

1. Corporate Information

Sterling Strips Limited is a public company domiciled in India and incorporated under the provisions of Companies Act, 1956. Its Shares are listed on Bombay Stock Exchange. Company is into Manufacturing activities- Boiler and Steam generation plants, Solar, Industrial Refrigeration Plants, Heavy Industrial Fabrication and is in process of establishing itself as EPC contractor in field of mini steel & power plant.

Note -1 In the opinion of the Board the current assets, loans and advances , balances of which are subject to confirmation by respective parties and are outstanding for long time , if realized in the ordinary course of business have value on realization at least to the amount at which they are stated in the Balance Sheet . The provision for all known liabilities subject to confirmation by respective parties are adequate and not in excess of amount reasonably necessary.

Payment received, made and adjusted in the parties accounts consisting debtors, creditors, loans, advances and deposits are generally by way

Note -2 of account payee cheques. Cash payment made by the Company are by and large to local labour employed at remote locations and wherever supporting bills / invoices are not available proper documentation has been maintained by the company.

Note -3 In view of BIFR approval of Revival scheme dated 07.04.2011 , Company has neither paid nor provided interest liability on unpaid statutory dues and liability of interest thereon has not also been ascertained .

Note -4 ADDITIONAL INFORMATION PURSUANT TO THE PROVISION OF PARAGRAPHS 3, 4, 4B, 4C & 4D OF PART II OF SCHEDULE VI OF THE COMPANIES

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Mar 31, 2013

1. Corporate Information

Sterling Strips Limited is a public company domiciled in India and incorporated under the provisions of Companies Act, 1956. Its Shares are listed on Bombay Stock Exchange. Company is into Manufacturing activities- Boiler and Steam generation plants, Solar, Industrial Refrigeration Plants, Heavy Industrial Fabrication and is in process of establishing itself as EPC contactor in field of mini steel & power plant.

Note -2 In the opinion of the Board the current assets, loans and advances , balances of which are subject to confirmation by respective parties and are outstanding for long time , if realized in the ordinary course of business have value on realization at least to the amount at which they are stated in the Balance Sheet . The provision for all known liabilities subject to confirmation by respective parties are adequate and not in excess of amount reasonably necessary.

Note -3 Payment received, made and adjusted in the parties accounts consisting debtors, creditors, loans, advances and deposits are generally by way of account payee cheques. Cash payment made by the Company are by and large to local labor employed at remote locations and wherever supporting bills / invoices are not available proper documentation has been maintained by the company.

Note -4 In view of BIFR approval of Revival scheme dated 07.04.2011 , Company has neither paid nor provided interest liability on unpaid statutory dues and liability of interest thereon has not also been ascertained .

Note -5 ADDITIONAL INFORMATION PURSUANT TO THE PROVISION OF PARAGRAPHS 3, 4, 4B, 4C & 4D OF PART II OF SCHEDULE VI OF THE COMPANIES

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Mar 31, 2012

1. Corporate Information

Sterling Strips Limited is a public company domiciled in India and incorporated under the provisions of Companies Act, 1956. Its Shares are listed on Bombay Stock Exchange. Company is into Manufacturing activities- Boiler and Steam generation plants, Industrial Refrigeration Plants, Heavy Industrial Fabrication and is in process of establishing itself as EPC contactor in field of mini steel & power plant.

Measurement of foreign currency monetary items at the Balance Sheet date

Foreign currency monetary items (other than derivative contracts) of the Company and its net investment in non-integral foreign operations outstanding at the Balance Sheet date are restated at the year-end rates.

In the case of integral operations, assets and liabilities (other than non-monetary items), are translated at the exchange rate prevailing on the Balance Sheet date. Non-monetary items are carried at historical cost. Revenue and expenses are translated at the average exchange rates prevailing during the year. Exchange differences arising out of these translations are charged to the Statement of Profit and Loss.

Treatment of exchange differences

Exchange differences arising on settlement / restatement of short-term foreign currency monetary assets and liabilities of the Company and its integral foreign operations are recognised as income or expense in the Statement of Profit and Loss. The exchange differences on restatement / settlement of loans to non-integral foreign operations that are considered as net investment in such operations are accumulated in a "Foreign currency translation reserve" until disposal / recovery of the net investment.

The exchange differences arising on restatement / settlement of long-term foreign currency monetary items are capitalised as part of the depreciable fixed assets to which the monetary item relates and depreciated over the remaining useful life of such assets or amortised on settlement / over the maturity period of such items if such items do not relate to acquisition of depreciable fixed assets. The unamortised balance is carried in the Balance Sheet as "Foreign currency monetary item translation difference account" net of the tax effect thereon. '

a Details of shares held by the holding company, the ultimate holding company, their subsidiaries and associates: NIL

b Details of Equity Shares have been issued for consideration other than cash during the period of last five years: NIL

Note -2 In the opinion of the Board the current assets, loans and advances , balances of which are subject to confirmation by respective parties and are outstanding for long time , if realized in the ordinary course of business have value on realization at least to the amount at which they are stated in the Balance Sheet . The provision for all known liabilities subject to confirmation by respective parties are adequate and not in excess of amount reasonably necessary.

Note -3 Payment received, made and adjusted in the parties accounts consisting debtors, creditors, loans, advances and deposits are generally by way of account payee cheques. Cash payment made by the Company are by and large to local labor employed at remote locations and wherever supporting bills / invoices are not available proper documentation has been maintained by the company.

Note -4 In view of BIFR approval of Revival scheme dated 07.04.2011 , Company has neither paid nor provided interest liability on unpaid statutory dues and liability of interest thereon has not also been ascertained .

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Mar 31, 2010

1. CONTINGENT LIABILITIES :

a) In the event of non-receipt of pending declaration forms from customers the company will be liable to return the concession accounted, amount not ascertained including the interest and penalties thereon under the Sales Tax Law.

b) The Sales Tax Authorities has completed the assessment up to the financial year 2003-2004. The company holds two entitlement certificates for deferral of sales tax dues, one for the period 1.5.1990 to 30.04.1999 for an amount of Rs. 98,47,800/-on erection of main project and the otherdated 20.12.1995 for an amount of Rs. 1,49,73,700/- on expansion project. Forthe purpose of allowing deferral under second entitlement certificate in the assessment of the company the sales tax authorities have calculated the deferral amount at 60.33% of the sales tax payable considering prorata investment inexpansion project and disallowed deferral of 30.67% of the sales tax payable based on prorata amount of investment in main project where entitlement limit was already exhausted, however such disallowed amount together with interest thereon has been stayed as per provision of Sec. 33(4)(C) of the BSTAct, 1959. The company has pleaded that the ratio of P.V. Textile SA No. 48/2000 dated 17.03.2000 be applied and the benefit of deferment may be extended to the entire sales. However the sales tax authorities have not accepted this contention of the company and matter is pending in appeal for adjudication aforesaid non deferral portion works out to Rs. 98,75,994/ 13 Intheopinion of the Board the current assets, loans and advances, balances of which are subjectto confirmation by respective parties and are outstanding for long time, if realized in the ordinary course of business have value on realization at least to the amount at which they are stated in the Balance Sheet except debtors of Rs. 227.58 lacs (Previous Year Rs. 195.46 lacs) considered doubtful and not provided for. The provision for all known liabilities subject to confirmation by respective parties are adequate and not in excess of amount reasonably necessary.

2. Payment received, made and adjusted in the parties accounts consisting debtors, creditors, loans, advances and deposits are generally by way of account payee cheques. Cash payment made by the company are by and large to local labor employed at remote locations and wherever supporting bills/invoices are not available proper documentation has been maintained by the company.

3. The company has no mechanism of getting information as to whether any of its suppliers constitute Small Scale Industrial undertakings and therefore, the amount due to such supplier has not been identified. The company has not received information from vendors regarding their status under the Micro, Small and Medium Enterprises Development Act, 2006 and hence disclosure relating to amount unpaid as at the year end together with interest paid / payable under this Act have not been given.

4. The total net worth of the Company has eroded. The company is having huge unabsorbed depreciation and carry forward claim of losses under the Income Tax Act, 1961. In view of pending reference made by the company to BIFR on the basis of its Audited Balance Sheet as at 31.03.2002 which was registered as Case No. 295/2003, there is no virtual certainty that sufficient future taxable income will be available against which deferred tax assets can be realized, therefore management has decided to make accounting of deferred tax asset when it will be reasonably sure that the company will be able to absorb such deferred tax assets against future liabilities.

5. In view of difficult financial position & huge losses companys case is pending with BIFR and pending sanction of revival Scheme. Company has neither paid norprovided interest liability on unpaid statutory dues and liability of interest thereon has not also been ascertained as the company is hopeful of getting it waived in pending BIFR matters.

6. Previous years figures have been regrouped and rearranged wherever considered necessary.