To the members of Cmi limited
Report on the Audit of the Standalone Financial Statements
We have audited the financial statements of CMI LIMITED ("the Company")which comprise the balance sheet as at 31stmarch2019 Profitand thestatementLoss(including other comprehensive income) Statement of Changes in Equity and statementof cash flows for year then ended and notes to the financial statements including asummary of significant accounting policies other explanatory information.
In our opinion and to the best of our information and according to the explanationsfinancial statements give the information required the Act in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of Company as at 31st March 2019 itsprofit/loss(including other comprehensive income) changes in equity and its cash flowsfor the year ended on that date.
Basis for opinion
We conducted our audit in accordance with the Standards on Auditing (sas)specifiedundersection 143(10) of the Companies Act 2013. Our responsibilities under those Standards arefurther described in the Auditor's
Responsibilities for the Audit of the Financial Statements section of our report. Weare independent of Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the financialstatements under the provisions of the Companies Act 2013and the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.
Information other than thefinancialstatements and auditors' report thereon
The Company's board of directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report but does not include the financial statementsand our auditor's report thereon. And Our opinion on the financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.
In connection financialstatements withourauditofthe our responsibility is to read theother information and in doing so consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained during the course ofour audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Key Audit matter
Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of the standalonefinancialstatements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
|The key audit matter ||How the matter was addressed in our audit |
|Revenue recognition under new accounting standard indour audit procedures on adoption of Ind AS 115 AS 115: Revenue from Contracts with Customers ||Revenue from contracts with Customers (Ind AS 115') Which is the new revenue accounting standard include |
|The Company has adopted Ind AS 115 - Revenue from Contracts with Customers (Ind AS 115) which is the new Revenue accounting standard. ||Evaluated the design and implementation of The processes and internal controls relating to Implementation of the new revenue accounting Standard; |
|Ind AS 115 is effective for the year beginning April 1 2018 and establishes a comprehensive framework for Determining and identifying whether a contract with The customer exists how much and when revenue is Recognized. This involves certain key judgments relating to Identification of contracts with customers identification Of distinct performance obligations determination of Transaction price appropriateness of the basis used to Measure revenue recognized over a period or at a point in Time. Revenue is recognized when (or as) a performance Obligation is satisfied i.e. When control' of the goods or performance obligations and determination of distinct Services underlying the particular Is transferred to the customer. ||Verifying management's assessment of contractual Arrangements including those relating to income from Supplier rebates terms of contract and commercial Substance thereof in order to assess the adherence to Revised accounting policies in light of the Of Ind AS 115. |
| ||Selecting samples of contractual |
| ||Testingmanagement's assessment of the applicability Of the standard to such arrangements identification of Transaction prices. |
|In view of the above the application and transitionto this Accounting standard is an area of focus in the audit. See notes 3(c) to financial statements. Taxation related mattersdeterminationof taxprovisions In view of the significance of the matter we applied the And assessment of contingent liabilitiesinvolves judgment With respect to various tax positions on deductibility of Transactions ||Additionally Disclosures made in the financial statements. |
| ||Following key audit procedures: |
|Of laws and regulations etc. Judgement is also required In assessing the range of possible outcomes for some of These matters. Tes of provisions exposures and contingencies. Estima Management makes an assessment management's to determine the Outcome of these matters and decides to make an accrual Or consider it to be a possible contingent liability in Accordance with applicable Accounting standards. ||Testing the design and operating effectiveness of Controls relatingto taxation and contingencies. Taxincentives/exemptions |
|Accordingly taxation and contingent liability related ||We evaluated management's judgements in respect of In understanding and evaluating Judgements we even considered third party advice Received by the Company wherever applicable the Status of recent and current tax assessments and Enquiries the outcome of previous claims judgmental Positions taken in tax returns and developments in the Tax environment. |
|See notes 3(I) and 12 to the financial statements. ||Disclosures on provisions and contingencies made in The financial statements. |
Emphasis of matter
We draw attention to Note 1 of the financial which describes that CMI Energy IndiaPrivate Limited ("CMIE") an erstwhile wholly owned subsidiary was merged withCMI Limited with an appointed date of March 1 2016 vide order of National Company LawTribunal Principal Bench New Delhi dated April 3 2019.
The financial statements of CMI Limited ("Merged Entity") for the financialyear 2018-19 has been prepared giving effect of order of the Hon'ble NCLT and thecomparative financialinformation of the Company for the year ended March 31 2018 has beenrestated to give effect to merger of an erstwhile wholly owned subsidiary CMIE.
Moreover all the accumulated losses and depreciations of CMIE as standing on March 12016 become losses and depreciation of the merged entity. Considering this fact taxexpenses has been recognized in the books of accounts for the financial year 2018-19.
Our opinion is not modified in
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.
Our opinion on the standalone financial statements does we do not express notcover theother information any form of assurance conclusion thereon.
In connectionwith our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Identify and assess the risks of material misstatement
Responsibilities management and those Charged with Governance for the StandaloneFinancial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act of these 2013 ("the Act") with respect to thepreparation financial statements that give a true and fair view of the financial positionperformance and cash flows of the Company in accordance with the accounting generallyaccepted in India including the accounting Standards specified under section 133 of theAct. This responsibility also includes maintenance of adequate accounting the Act forsafeguarding of the assets of the Company and for preventing and detectingfrauds and otherirregularities; selection and application of appropriate accounting are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting 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.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process.
For the Audit of the Auditor's Responsibilities Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with sas will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with sas we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Of the financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion.Theriskofnotdetectinga materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control. Principles
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 we are also records in accordance with the provisions of responsiblefor expressing our opinion on whether the company has adequate internal financial controlssystem in place and the operating effectiveness of policies; making judgments andestimates that such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the as a goingconcern. If Company'sabilitytocontinue we conclude that a material uncertainty exists weare required to draw attention in our auditor's report to the related disclosures in thefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financial disclosuresand whether the financial represent the underlying transactions and events in a mannerthat achieves fair presentation.
We communicate with those charged with governance regarding among other timing of theaudit and any identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of statements mostsignificance in the audit of the financial of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
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 143 of the CompaniesAct 2013 we give ofsection in the Annexure A' a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
A) 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 it appears from our examination of those books.
C) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
D) In our opinion the aforesaid financial statements comply with the AccountingStandards specified theplannedscopeand the Act read with Rule 7 of the Companies auditfindings (Accounts) Rules 2014.deficiencies in internal control that we
e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 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 with reference tofinancial statements of the Company and the operating of such refer to our separate Reportin Annexure B'.
B) 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. TheCompany has disclosed the impact of pending litigationson its financial position - refernote 45 to the Standalone Financial Statements.
Ii. The Company did not have any long-term contracts including derivative contracts for(11) which there were any material foreseeable losses.
Iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
C) With respect to the matter to be included in the Auditor's Report under section197(16):
In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of section197 of the Act. The remuneration paid to any director is notin excess of the limit laid down under section197 of the Act. The Ministry of CorporateAffairs has not prescribed other details under section197(16) which are required to becommented upon by us.
The Annexure referred to in paragraph 1 of our Report on "other legal andRegulatory Requirements". Opinion
We report that:
I. A. The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
B. As explained to us fixed assets have been physically verified by the management atreasonable intervals; no material discrepancies were noticed onsuchverification.
C. The According to the information and explanations records of the Company the titledeeds of immovable properties included in fixed assets are held in the name of theCompany.
Ii. As explained to us inventories have been physically verified during the year bythe management at reasonable intervals. The discrepancies noticed on physical verificationof stocks by the records.
Iii. According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not granted any loans secured orunsecured to companies firms Limited Liability Partnerships or other parties listed inthe register maintained under Section 189 of the Companies Act 2013. Consequently theprovisions of clauses iii (a) (b) and (c)of the order are not applicable to the Company.
Iv. In respect of loans investments guarantees and security provisions of section185 and 186 of the Companies Act 2013 have been complied with.
V. The company has not accepted any deposits from the public covered under sections 73to 76 of the Companies Act 2013.
Vi. As per information & explanation given by the management maintenance of costrecords has not been specified by thecentralgovernmentundersub-section(1) .2013 ofsection148of the companiesact
Vii. A. According to the records of the company undisputed statutory dues includingProvident Fund Investor Education and Protection Fund Employees' State InsuranceIncome-tax Sales-tax Service Tax Custom Duty Excise Duty value added tax cess andany other statutory dues to the extent applicable have generally been regularly depositedwith the appropriate authorities. According to the information and explanations given tous there were no outstanding statutory dues as on 31st of March 2019 for a period of morethan six months from the date they became payable.
B. According to the information and explanations given to us there is no amountpayable in respect of income tax service tax sales tax customs duty excise duty valueadded tax and cess whichever applicable which have not been deposited on account of anydisputes.
Viii. In our opinion and according to the information and explanations given by themanagement we are of the opinion that the Company has not defaulted in repayment of duesto a financial institution bank Government or debenture holders as applicable to thecompany. Accordingly paragraph 3(ix) of the Order is not applicable to the Company
Ix. The company has not raised any money by way of initialpublic offer or furtherpublic offer (including debt instruments) or by way of term loans during the year.
Given to us we report that no fraud by the company or any fraud on x. Accordingtotheinformation the Company by its officers or employees has been noticed or reportedduring the year. Xi. According to the information andexplanationsgiventouswereportthatmanagerialremunerationhas been paid in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Companies Act. Xii. According to the information and explanations given to us in ouropinion the Company is not a Nidhi Company as prescribedundersection 406 ofthe Act
Xiii. According to the information and explanations given to us all transactionswiththe related parties are in compliance with sections 177 and 188 of Companies Act 2013where applicable and the details have been disclosed in the Financial Statements etc. Asrequired by the applicable accounting standards.
Xiv. The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordinglyparagraph 3(xiv) of the Order is not applicable to the Company.
Xv. Provisions of section 192 of Companies Act 2013 have been by the company withdirectors or persons connected with him. Accordingly paragraph 3(xv) of the Order is notapplicable to the Company.
Xvi. According to the information and explanation given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
Annexure B to the Independent Auditors' Report
(Referred to in paragraph 1(A)(f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
Report on the Internal Financial Controls under Clause (i) of Sub-section Section143 ofthe Companies of Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of CMI LIMITED("the Company") as of March 31 2019 in conjunction with our audit of thefinancial statements of the Company for the year
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 financialreportingcriteriaestablished 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 of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013.
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
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financialcontrol over financial reportingisa process designed toprovide 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
2. Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
3. Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect
Inherent limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financialcontrols over financialcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of theinternal financial periods are subject to the risk that the internal financial control ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financialreporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissuedby the Institute of Chartered Accountants of India.
| ||For Krishna neeraj & Associates |
| ||Chartered Accountants |
| ||Frn: 023233n |
|Place : new Delhi ||CA. Krishna K neeraj |
|Date: 28th may 2019 ||Partner |
| ||Membership no. 506669 |