to the Members of
SRM ENERGY LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of SRM ENERGY LIMITED("the Company") which comprise the Balance Sheet as at March 31 2016 theStatement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
Managements Responsibility for the Financial Statements
The management and Board of Directors of the Company are responsible for the mattersstated in Section 134(5) of the Companies Act 2013 (the act) with respect tothe preparation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with rule 7 of Companies (Accounts) Rules2014. This responsibility includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; design implementation and maintenance of adequate internal financial controlsthat are operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit. 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 anddisclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances but not for the purposeof expressing an opinion on whether the company has in place an adequate internalfinancial controls system over financial reporting and the operating effectiveness of suchcontrols. An audit also includes evaluating the appropriateness of accounting policiesused and the reasonableness of the accounting estimates made by the Companysmanagement and Board of Directors as well as evaluating the overall presentation of thefinancial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India:-
a) in the case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2016;
b) in the case of the statement of Profit and Loss of the loss for the period ended onthat date; and
c) in the case of the Cash Flow Statement of the cash flows for the period ended onthat date.
Emphasis of Matter
Attention of the matters is invited to note no.27 of the notes to accounts regardingthe financial statements of the Company having been prepared on a Going Concern basis theCompanys networth has been significantly reduced and it has been incurring cashlosses and the promoters have infused funds by way of unsecured loan and are committed toprovide necessary funding to meet the liabilities and future running expenses of theGroup. Further the Board of Directors of the Company have decided to sell/dispose off thepower plant transferred in its wholly owned subsidiary subject to necessary approvalsfrom the shareholders and the statutory authorities if any. In view of abovedevelopments the accounts have been prepared under going concern basis.
Our opinion is not modified in respect to this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure a statement on the matters Specified inparagraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act we further 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 purpose 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 the statement of profit loss and the cash flow statement dealtwith by this Report are in agreement with the books of account;
d. in our opinion the aforesaid financial statements comply with the applicableAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014
e. on the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of Section 164(2) of theAct; and
f. In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to other matters to be included in theAuditors Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014:
(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements-Refer Note 17 on Contingent Liabilities;
(ii) The Company did not have any long-term contracts including derivative contracts;as such the question of commenting on any material foreseeable losses thereon does notarise
(iii) There has not been an occasion in case of the Company during the year underreport to transfer any sums to the Investor Education and Protection Fund. The question ofdelay in transferring such sums does not arise
FOR VATSS & Associates
Partner (M/N: 90862)
Place: New Delhi
Annexure to the independent Auditors Report
The Annexure referred to in our Independent Auditors Report of even date to themembers of SRM ENERGY LIMITED on the accounts of the company for the year ended31st March 2016
(i) The Company does not have fixed assets. Hence clause 3(i)(a) to 3(i)(c) of theorder are not applicable to the Company;
(ii) The nature of business of the Company does not require it to have any inventory.Hence the requirement of clause (ii) of paragraph 3 of the said Order is not applicableto the Company;
(iii) As informed to us the Company has not granted loans secured or unsecured tocompanies firms or other parties covered in the register maintained under section 189 ofthe Companies Act 2013. Hence clauses 3 (iii) (a) to (c) of the order are not applicableto the Company.
(iv) In our opinion and according to the information and explanations given to us thecompany has compiled with the provisions of section 185 and 186 of the Companies Act 2013in respect of loans investments guarantees and security.
(v) The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Section 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.
(vi) As informed to us the maintenance of cost records has not been specified by theCentral Government under sub-section (1) of Section 148 of the Act in respect of theactivities carried on by the company.
(vii) (a) According to the information and explanations given to us and based on therecords of the company examined by us the company is regular in depositing the undisputedstatutory dues including Provident Fund Employees State Insurance Income-taxSales-tax Wealth Tax Service Tax Custom Duty Excise Duty Value added Tax Cess andany other statutory dues applicable to it though there has been a slight delay in fewcases. According to the information and explanations given to us no undisputed amountspayable in respect of the above were in arrears as at March 31 2016 for a period of morethan six months from the date on when they become payable;
(b) According to the information and explanations given to us and based on the recordsof the Group examined by us the dues outstanding with respect to Income Tax Wealth TaxService Tax Sales Tax Customs Duty and Excise Duty or cess as applicable to it onaccount of any dispute are as follows:
|Name of the statute ||Nature of dues ||Amount Rs. in million ||Period to which the amount relates ||Forum where dispute is pending |
|Income Tax Act1961 ||TDS ||0.89 ||AY 2008-09 to 2014-15 ||CIT (Appeals) |
(viii) According to the records of the company examined by us and as per theinformation and explanations given to us the company has not taken any loans from anyfinancial institutions banks or debenture holder and hence the question of defaulting inrepayment of dues does not arise.
(ix) According to the records of the company examined by us and as per the informationand explanations given to us the company has not raised moneys by way of initial publicoffer or further public offer including debt instruments and term Loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.
(x) According to the records of the company examined by us and as per the informationand explanations given to us we report that no fraud by the Company or on the company byits officers or employees has been noticed or reported during the year.
(xi) In our opinion the Company has not paid any managerial remuneration. Thereforethe provisions of clause 4 (xi) of the Order are not applicable to the Company.
(xii) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.
(xiii) According to the records of the company examined by us and as per theinformation and explanations given to us all transactions with the related parties are incompliance with section 177 and 188 of Companies Act 2013 and the details have beendisclosed in the Financial Statements as required by the applicable accounting standards.
(xiv) According to the records of the company examined by us and as per the informationand explanations given to us the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review. Accordingly the provisions of clause 3 (xiv) of the Order are notapplicable to the Company and hence not commented upon.
(xv) According to the records of the company examined by us and as per the informationand explanations given to us the company has not entered into any non-cash transactionswith directors or persons connected with him. Accordingly the provisions of clause 3 (xv)of the Order are not applicable to the Company and hence not commented upon.
(xvi) In our opinion the company is not required to be registered under section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the Company and hence not commented upon.
For VATSS & Associates
Partner (M/N: 90862)
Place: New Delhi