You are here » Home » Companies » Company Overview » Deep Energy Resources Ltd

Deep Energy Resources Ltd.

BSE: 532760 Sector: Others
NSE: DEEPENR ISIN Code: INE677H01012
BSE 09:43 | 07 Dec 40.15 0.75
(1.90%)
OPEN

40.65

HIGH

41.20

LOW

40.10

NSE 09:39 | 07 Dec 40.45 1.20
(3.06%)
OPEN

39.25

HIGH

40.90

LOW

39.25

OPEN 40.65
PREVIOUS CLOSE 39.40
VOLUME 109
52-Week high 62.60
52-Week low 30.80
P/E 4015.00
Mkt Cap.(Rs cr) 128
Buy Price 40.20
Buy Qty 74.00
Sell Price 40.45
Sell Qty 11.00
OPEN 40.65
CLOSE 39.40
VOLUME 109
52-Week high 62.60
52-Week low 30.80
P/E 4015.00
Mkt Cap.(Rs cr) 128
Buy Price 40.20
Buy Qty 74.00
Sell Price 40.45
Sell Qty 11.00

Deep Energy Resources Ltd. (DEEPENR) - Auditors Report

Company auditors report

To

The Members

Deep Industries Limited.

Report on the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Deep IndustriesLimited("the Company") which comprises of the balance sheet as at 31st March2020 and the statement of Profit and Loss (including other comprehensive income) thestatement of cash flows for the year statement of changes in equity for the year thenended and notes to the financial statements including a summary of significant accountingpolicies and other explanatory information.

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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31 March 2020 and its profit totalcomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the standalone financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the standalone financial statements.

Emphasis of Matter

This audit report has been issued in respect of financial statements of the company forthe financial year ended on 31 March 2020 prepared by the management after giving effectto the Scheme of Arrangement under section 230 to 232 of the Companies Act 2013 betweenthe company and Deep CH4 Limited. The appointed date of the Scheme of Arrangement is 1 stApril 2017. We draw attention to the Note -5 in the Notes to the financial statementsregarding Scheme of Arrangement under section 230 to 232 of the Companies Act 2013between the company and Deep CH4 Limited. Our opinion is not modified in respect of thismatter.

We further draw attention to Note - 4 of the Financial Statements which describes theuncertainties and the impact of COVID – 19 pandemic on the Company's operations andresults as assessed by the management. Our opinion is not modified in respect of thismatter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements 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. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matter Description Response to Key Audit Matter
A. Demerger of Oil and Gas Services undertaking pursuant to Scheme of Arrangement (The Scheme) Our audit procedures comprised of the following:
- Evaluated and tested controls with respect to:
The Scheme approved by the Hon'ble National Company law Tribunal is a significant transaction for the year which materially impacts the Balance Sheet as at the year- end. • Management's assessment of the accounting treatment of the said transaction in terms of the Indian Accounting Standards compliance with taxlaws and other statutes/ regulations as applicable.
• Identification and allocation of assets and liabilities.
Refer Note - 5 of the financial statements for details of the transaction and the accounting treatment thereof - Substantive testing procedures included:
• Involvement of tax specialists to assess the reasonableness of the management's position on tax implications.
• Verifying accounting of the transaction in accordance with the approved Scheme and testing the related disclosures in the financial statements.

Information Other than the Standalone Financial Statements and Auditor's 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 ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with 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 during the course of our 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.

Responsibilities of 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 Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) specifiedunder Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance 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 implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statement that give a true andfair view and are free from material misstatement whether due 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 theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken 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:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether standalone the financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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 (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified in the paragraph3 and 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 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 standalone financial statements comply with the IndianAccounting 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 31 stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 st March 2020 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 B"; and

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 wherever necessary of pending litigations onits financial position in its standalone financial statements;

ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any 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.

h. With respect to the matter to be included in the Auditors' Report under Section197(16) of the Act: In our opinion and according to the information and explanations givento us the remuneration paid by the Company to its directors during the current year is inaccordance with the provisions of Section 197 of the Act. The remuneration paid to anydirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of Corporate Affairs has not prescribed other details under Section 197(16) whichare required to be commented upon by us.

For DHIRUBHAI SHAH & CO LLP
Chartered Accountants
Firm's registration number: 102511W/W100298
Place : Ahmedabad Harish B. Patel
Date : 30 th July 2020 Partner
Membership number: 014427
UDIN: 20014427AAABLX7527

Annexure- A to the Auditors' Report

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended 31 st March 2020 we reportthat:

(i) a. The Company has maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.

b. The Company has a regular program of physical verification of its fixed assets. Inaccordance with this program fixed assets were verified during the year and no materialdiscrepancies were noticed on such verification. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and thenature of its assets.

c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) As explained to us the inventories have been physically verified during theyear by the management. In our opinion the frequency of verification is reasonable.Discrepancies noticed on physical verification of inventory as compared to book recordswere not material.

(iii) The Company has not granted any loans secured or unsecured to companiesfirms or other parties covered in the register maintained under section 189 of theCompanies Act and therefore the provisions of clauses (iii)(a) & (iii)(b) of theOrder are not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to usthe Company has complied with the provisions of section 185 and 186 of the Act withrespect to the loans and investments made.

(v) In our opinion and according to the information and explanations given to usthe Company has not accepted any deposits covered by the provisions of Sections 73 to 76or any other relevant provisions of the Companies Act 2013 and the rules framed thereunder.

(vi) In our opinion and according to the information and explanations given to usand based on books of account maintenance of cost records under section 148(1) of theCompanies Act 2013 is not applicable to the company and hence paragraph 3(vi) of theOrder is not applicable.

(vii)(a) The Company is 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 Goods and Service Tax and any otherstatutory dues with the appropriate authorities.

According to the information and explanations given to us in our opinion no undisputedamounts payable in respect of statutory dues including Provident Fund Employees' StateInsurance Income Tax Value Added Tax Central Sales Tax Wealth Tax Service Tax CustomDuty Excise Duty Cess Goods and Service Tax and other statutory dues applicable to itwere in arrears as at the balance sheet date for a period of more than six months from thedate they became payable.

(b) According to information and explanations given to us and records of the companyexamined by us there are no dues of wealth tax sales tax duty of customs duty ofexcise value added tax goods and service tax and cess etc. which have not been depositedon account of dispute. However particulars of the dues as at March 2020 which have notbeen deposited on account of dispute are as follow:

Name of Statute Nature of Dues Amount Related Period From where the dispute is pending
( Lakhs)
Finance Act 1994 Service tax 96.36 F.Y. 2006-07 to 2011-2012 CESTAT Ahmedabad
Finance Act 1994 Service tax 51.97 F Y 2012-13 to 30.09.2014 CESTAT Ahmedabad
Finance Act 1994 Service tax 1.70 F Y 2009-10 CESTAT Ahmedabad
Income Tax Act 1961 Income-Tax 6.14 F Y 2013-14 CIT(A)
Income Tax Act 1961 Income-Tax 46.81 F Y 2015-16 CIT (A)
Income Tax Act 1961 Income-Tax 2.29 F Y 2016-17 CIT (A)

(viii) In our opinion and according to the information and explanation given to usthe Company has not defaulted in repayment of dues to a financial institution banksGovernment or debenture holder during the year.

(ix) In our opinion and according to the information and explanation given to usthe term loans were applied for the purposes for which loans were raised.

(x) Based upon the audit procedures performed and according to the information andexplanations given by the management we report that no fraud on or by the Company hasbeen noticed or reported during the course of our audit.

(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

(xii)In our opinion and according to the information and explanations given to usthe Company is not a Nidhi company.

Accordingly paragraph 3(xii) of the Order is not applicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the Standalone financial statements as required by theapplicable Ind AS.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made preferential allotmentof shares during the year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.

For DHIRUBHAI SHAH & CO LLP
Chartered Accountants
Firm's registration number: 102511W/W100298
Place : Ahmedabad Harish B. Patel
Date : 30 th July 2020 Partner
Membership number: 014427

ANNEXURE B TO THE AUDITORS' REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of DeepIndustries Limited ("the Company") as of 31 st March 2020 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

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 (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone 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 31 March 2020 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 DHIRUBHAI SHAH & CO LLP
Chartered Accountants
Firm's registration number: 102511W/W100298
Place : Ahmedabad Harish B. Patel
Date : 30 th July 2020 Partner
Membership number: 014427

.