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Sarda Energy & Minerals Ltd.

BSE: 504614 Sector: Metals & Mining
NSE: SARDAEN ISIN Code: INE385C01013
BSE LIVE 15:40 | 22 Sep 441.85 -24.05
(-5.16%)
OPEN

466.00

HIGH

466.50

LOW

439.25

NSE 15:45 | 22 Sep 441.65 -23.40
(-5.03%)
OPEN

464.90

HIGH

464.90

LOW

437.50

OPEN 466.00
PREVIOUS CLOSE 465.90
VOLUME 40716
52-Week high 487.25
52-Week low 174.00
P/E 13.80
Mkt Cap.(Rs cr) 1,593
Buy Price 441.85
Buy Qty 31.00
Sell Price 0.00
Sell Qty 0.00
OPEN 466.00
CLOSE 465.90
VOLUME 40716
52-Week high 487.25
52-Week low 174.00
P/E 13.80
Mkt Cap.(Rs cr) 1,593
Buy Price 441.85
Buy Qty 31.00
Sell Price 0.00
Sell Qty 0.00

Sarda Energy & Minerals Ltd. (SARDAEN) - Auditors Report

Company auditors report

To the Members of

Sarda Energy & Minerals Limited

Report on the Financial Statements

We have audited the accompanying standalone financial statements of Sarda Energy &Minerals Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2016 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of 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 Section134(5) of the Companies Act2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide 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 explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India

(i) in the case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2016;

(ii) in the case of the Statement of Profit and Loss of the profit for the year endedon that date; and

(iii) in the case of the Cash Flow Statement of the cash flows for the year ended onthat date.

Emphasis of Matters

We draw attention to the following matters in the notes to the financial statements:

a) Note no. 38 which describes the uncertainty related to the compensation amount andexclusion of washery from the mine infrastructure cost of cancelled coal block of theCompany for which the Company has filed writ petition in the court of law. Since thematter is subjudice pending settlement of claim no adjustment has been made forimpairment.

b) Similarly note no. 33 which also describes uncertainty related to investments inJoint Venture Company where the allotted coal block has been cancelled. No impairment losshas been booked in anticipation that the realizable value of the assets of Joint Ventureshall be more than the value of investment of the Company.

c) Impact with respect to (a) and (b) are presently not ascertainable and as suchcannot be commented by us.

Our opinion is not qualified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure - B a statement on the matters specified in paragraphs 3and 4 of the 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 bestof 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 theCompany so far as appears from our examination of those books;

c. the Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

d. in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

e. On the basis of the written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms of Section164 (2) of the Act;

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in Annexure - A.

g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand 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 financialpositions in its financial statements - Refer Note no. 36 of the financial statements.

(ii) In our opinion and according to the explanation given to us the Company has notentered into any long-term contracts including derivative contracts for which there wereany material foreseeable losses.

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For O P Singhania & Co.

(ICAI Firm Regn. No.002172C)

Chartered Accountants

Sanjay Singhania

Partner

Membership No.076961

Raipur 27th May 2016

Re : SARDA ENERGY & MINERALS LIMITED

Referred to in paragraph 2(f) of Report on Other Legal and Regulatory Requirements ofour report of even date :

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act.

We have audited the internal financial controls over financial reporting of SardaEnergy & Minerals Limited ("the Company") as of 31st March 2016 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For O P Singhania & Co.

(ICAI Firm Regn. No.002172C)

Chartered Accountants

Sanjay Singhania

Partner

Membership No.076961

Raipur 27th May 2016

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation

of fixed assets.

(b) As explained to us all major assets except certain low value items viz furniture& fixtures and office equipment have been physically verified by the management atreasonable intervals. According to the information and explanation given to us nomaterial discrepancies were noticed.

(c) The title deeds of immovable properties as disclosed in Note 12 on fixed assets tothe financial statements are held in the name of the Company except the immovableproperties of merged companies which has still carried on the name of erstwhile companiesand are yet to be updated in revenue records.

(ii) As explained to us the physical verification of inventories have been conductedat reasonable intervals by the management during the year. In our opinion the frequencyof the verification is reasonable. The discrepancies noticed on verification between thephysical stocks and the book records were not material and have been properly dealt within the books of account.

(iii) The company has granted unsecured loan to four companies and one LimitedLiability Partnership covered in the register maintained under section 189 of thecompanies Act 2013 during the year. According to the information and explanations givento us and based on the audit procedures conducted by us we are of the opinion that:

(a) The terms & conditions of the grant of such loan are not prejudicial to theinterest of the Company.

(b) As explained to us the principal amounts are repayable on demand whereas theinterest is payable annually at the discretion of the Company and the repayments orreceipts are regular.

(c) Since the amount outstanding is not overdue therefore the provisions of clause 3(iii)(c) of the Companies (Auditor's Report) Order 2016 are not applicable to thecompany.

(iv) In our opinion and according to the information & explanations given to usthe Company has compiled with the provisions of Section 186 of the Companies Act 2013 inrespect of the loans and investment made and guarantees and security provided by it. TheCompany has not granted any loans and made any investments or provided any guarantees orsecurity to the parties covered under Section 185 of the Companies Act 2013.

(v) In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits from public in terms of the directives issued bythe Reserve Bank of India and the provisions of Section 73 to 76 or any other relevantprovisions of the Companies Act and rules framed thereunder; therefore the provisions ofclause 3(v) of the Companies (Auditor's Report) Order 2016 are not applicable to thecompany.

(vi) We have broadly reviewed the books of account maintained by the company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 in respect of Company's products to which thesaid rules are made applicable and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. We have however not made a detailedexamination of the records.

(vii) (a) According to the information & explanations given to us during the yearthe company is generally regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income tax sales tax service tax duty ofcustoms duty of excise value added tax cess and any other statutory dues with theappropriate authorities.

(b) According to the information and explanations given to us there are no dues ofincome tax sales tax service tax custom duty excise duty value added tax and cesswhich have not been deposited on account of any dispute except the following cases:

Name of the Statute Nature of the Amount Period to which the amount Forum where dispute is
Dues (Rs. in lac) relates pending
Central Excise Act 1944 Excise Duty 20.56 Jul'1987 to Oct'1988 High Court
Central Excise Act 1944 Excise Duty 7.62 Mar'1989 to Aug'1989 Commissioner (Appeals)
Central Excise Act 1944 Excise Duty 29.95 2008 to Aug'2012 Commissioner (Appeals)
Central Excise Act 1944 Excise Duty 11.61 Sept'2012 to Aug'2013 Commissioner (Appeals)
Central Excise Act 1944 Excise Duty 64.93 Apr'2008 to Dec'2012 Commissioner (Appeals)
Central Excise Act 1944 Excise Duty 51.23 Sept'2013 to Jul'2014 Commissioner (Appeals)
Central Excise Act 1944 Excise Duty 6.50 Jan'2005 to Mar'2007 Customs Excise & Service
Penalty 2.00 Tax Appellate Tribunal
Central Excise Act 1944 Excise Duty 78.48 Apr'2007 to Jul'2009 Customs Excise & Service
Penalty 83.48 Tax Appellate Tribunal
Central Excise Act 1944 Excise Duty 16.96 Jan'2005 to May'2007 Customs Excise & Service
Penalty 16.96 Tax Appellate Tribunal
Central Excise Act 1944 Excise Duty 0.01 Dec'2006 to Mar'2007 Customs Excise & Service
Penalty 0.86 Tax Appellate Tribunal
Central Excise Act 1944 Excise Duty 9.74 1st Mar'2011 to 23rd Mar' Customs Excise & Service
2011 Tax Appellate Tribunal
Central Excise Act 1944 Excise Duty 17.49 2007-08 Customs Excise & Service
Penalty 17.49 Tax Appellate Tribunal
Finance Act 1994 Service Tax 15.55 2005-06 Customs Excise & Service
Penalty 15.55 Tax Appellate Tribunal
Central Excise Act 1944 Excise Duty 3.33 2004-05 Customs Excise & Service
Penalty 3.33 2006-07 Tax Appellate Tribunal
Penalty 6.98 2006-07
Central Excise Act 1944 Penalty 0.43 Jul'2010 to Jun'2012 Customs Excise & Service Tax Appellate Tribunal
Central Sales Tax Act & Value Added 224.20 1992-93 Appellate Authorities upto
Sales Tax Acts of Various Tax Central to 2010-11 Commissioner's level
states and Entry Tax Act sales tax and
1976 Entry tax
Income Tax Act 1961 Income Tax 46.58 A.Y. 2012-13 CIT (Appeals)
Income Tax Act 1961 Penalty 44.02 A.Y. 2006-07 CIT (Appeals) - Nagpur
Chhatisgarh Upkar Energy 4452.2 May'2006 to Feb'2014 Supreme Court
Adhiniyam 1981 Development Cess

(viii) Based on our audit procedures and according to the information and explanationsgiven to us the company has not defaulted in repayment of loans or borrowings to anyfinancial institution or bank or Government or debenture holders as at the balance sheetdate.

(ix) The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments). According to the information and explanationsgiven to us and in our opinion the term loans have been applied progressively for thepurpose for which the loans were obtained.

(x) In our opinion and according to the information and explanations given to us nofraud by the Company or on the Company by its officers or employees has been noticed orreported during the year. Therefore the provisions of clause 3(x) of the Companies(Auditor's Report) Order 2016 are not applicable to the Company.

(xi) The Company has provided for managerial remuneration during the year in accordancewith the requisite approvals mandated by the provisions of Section 197 read with ScheduleV of the Companies Act 2013.

(xii) As the Company is not a Nidhi Company and the Nidhi Rules 2014 are notapplicable to it. Therefore the provisions of clause 3(xii) of the Companies (Auditor'sReport) Order 2016 are not applicable to the Company.

(xiii) The Company has entered into transactions with related parties in compliancewith the provisions of Section 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under AccountingStandard (AS) 18 Related Party Disclosures specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforethe provisions of clause 3(xiv) of the Companies (Auditor's Report) Order 2016 are notapplicable to the Company.

(xv) The Company has not entered into any non-cash transactions with its directors orpersons connected with him. Therefore the provisions of clause 3(xv) of the Companies(Auditor's Report) Order 2016 are not applicable to the Company.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Therefore the provisions of clause 3(xvi) of the Companies(Auditor's Report) Order 2016 are not applicable to the Company.

For O P Singhania & Co.

(ICAI Firm Regn. No.002172C)

Chartered Accountants

Sanjay Singhania

Partner

Membership No.076961

Raipur 27th May 2016