EKI Energy Services Ltd.
|BSE: 543284||Sector: Others|
|NSE: N.A.||ISIN Code: INE0CPR01018|
|BSE 16:01 | 06 Dec||1483.60||
|NSE 05:30 | 01 Jan||EKI Energy Services Ltd|
|Mkt Cap.(Rs cr)||4,080|
|Mkt Cap.(Rs cr)||4079.90|
EKI Energy Services Ltd. (EKIENERGY) - Auditors Report
Company auditors report
EKI ENERGY SERVICES LIMITED
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of EKIENERGY SERVICES LIMITED ("the Company") which comprises the StandaloneBalance Sheet as at 31st March 2022 the Standalone Statement of Profit & Loss and theStandalone Statement of Cash Flows for the year ended and notes to the standalonefinancial statements including a summary of significant accounting policies and otherexplanatory information ("the standalone financial statements").
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 as amended ("the Act") in themanner so required and give a true and fair view in conformity with the AccountingStandards prescribed under section 133 of the Act read with the applicable rules and otheraccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2022 the profit and its cash flows of the year ended on that date.
BASIS OF OPINION
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) as specified under section 143(10) of theAct. Our responsibilities under those standards are further described in 'theAuditor's Responsibilities for the Audit of the Standalone Financial Statements'section of our report. We are independent of the Company in accordance with the ethicalrequirements that are relevant to our audit of the standalone financial statements as perthe Code of Ethics issued by the Institute of Chartered Accountants of India and theprovisions of the Act and we have fulfilled our ethical responsibilities in accordancewith these requirements. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion on the standalone financial statements.
KEY AUDIT MATTERS
Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the standalone financial statementsfor the financial year ended 31st March 2022. These matters were addressed in the contextof our audit of the standalone financial statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters.
The Company's Management & Board of Directors are responsiblefor the other information. The other information comprises the information included in theCompany's annual report but does not include the financial statements and ourauditor's report thereon. The Company's annual report is expected to be madeavailable to us after the date of this auditor's report.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. When we read the Company'sannual report based on the work we have performed if we conclude that there is amaterial misstatement therein; we are required to communicate the matter to those chargedwith governance and take necessary actions as applicable under the relevant laws andregulations.
MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIALSTATEMENTS
The Company's board of directors is responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the state of affairs (financialposition) profit or loss (financial performance) and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting standards specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The board of directors is also responsible for overseeing theCompany's financial reporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONEFINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and 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 Standards on Auditing will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if individually or in the aggregate they could reasonably beexpected to influence the economic decisions of users taken on the basis of thesestandalone financial statements.
As part of an audit in accordance with Standards on Auditing weexercise professional judgment and maintain professional skepticism throughout the audit.We also:
Identify and assess the risks of material misstatement of thestandalone 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. The risk of not detecting a 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.
Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls with reference to standalonefinancial statements in place and the operating effectiveness of such 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 thegoing concern basis of accounting in preparation of standalone financial statements andbased on the audit evidence obtained whether a material uncertainty exists related toevents or conditions that may cast significant doubt on the Company's ability tocontinue as a going concern. If we conclude that a material uncertainty exists we arerequired to draw attention in our auditor's report to the related disclosures in thestandalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to ceaseto continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (i) planning the scope of our audit work and in evaluating the results of our work; and(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
REPORT ON OTHER LEGAL & REGULATORY REQUIREMENTS
1. In our opinion and according to 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) ofthe Act which are required to be commented upon by us.
2. As required by the Companies (Auditor's Report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of Section 143 of the Act we give in the "Annexure-A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.
3. As required by Section 143(3) of the Act based on our audit wereport that:
a) We have sought and obtained all the information and explanationswhich to the best of 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 beenkept by the Company so far as it appears from our examination of those books;
c) The Standalone Balance Sheet the Standalone Statement of Profit andLoss and the Standalone Statement of Cash Flows dealt with by this report are in agreementwith the relevant books of account;
d) In our opinion the aforesaid standalone financial statements complywith the Accounting Standards specified under Section 133 of the Act read with rule 7 ofthe Companies (Accounts) Rules 2014;
e) On the basis of the written representations received from thedirectors as on 31st March 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2022 from being appointed as a director interms of section 164(2) of the Act;
f) With respect to the adequacy of the internal financial controls withreference to standalone financial statements of the Company and the operatingeffectiveness of such controls refer to our separate report in "Annexure-B" tothis report;
g) With respect to the other matters to be included in theAuditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and accordingto the explanations given to us:
1) The Company does not have any pending litigations which could haveany impact on its financial position in the standalone financial statements;
2) The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;
3) The Company has not been able to transfer to the Investor Educationand Protection Fund a sum of Rs. 200 /- transferred to the Unpaid Dividend Account ofthe Company in pursuance of section 124(1) of the Act remaining unpaid or unclaimed alongwith the interest accrued thereon if any within the time prescribed under section 124(5)of the Act.
4) In respect of funds advances loaned invested or received by theCompany:
(i) The management has represented that to the best of its knowledgeand belief no funds have been advanced or loaned or invested (either from borrowed fundsor share premium or any other sources or kind of funds) by the company to or in any otherpersons or entities including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the companyor provide any guarantee security or the like on behalf of the Ultimate Beneficiaries;
(ii) The management has represented that to the best of its knowledgeand belief no funds have been received by the Company from any persons or entitiesincluding foreign entities ("Funding Parties") with the understanding whetherrecorded in writing or otherwise that the Company shall whether directly or indirectlylend or invest in other persons or entities identified in any manner whatsoever("Ultimate Beneficiaries") by or on behalf of the Funding Party or provide anyguarantee security or the like on behalf of the Ultimate Beneficiaries; and (iii) Basedon such audit procedures as considered reasonable and appropriate in the circumstancesnothing has come to our notice that has caused us to believe that the representationsunder subclause (4)(i) and (4)(ii) contain any material misstatement.
5) The dividend declared or paid during the year by the Company is incompliance with Section 123 of the Act.
REFRRED TO IN PARA 2 UNDER "REPORT ON OTHER LEGAL & REGULATORYREQUIREMENTS" SECTION OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF EKI ENERGYSERVICES LIMITED FOR THE YEAR ENDED 31st MARCH 2022.
Based on the audit procedures performed for the purpose of reporting atrue and fair view on the standalone financial statements of the Company and taking intoconsideration the information and explanations given to us and the books of account andother records examined by us in the normal course of audit and to the best of ourknowledge and belief we report that:
i) In respect of the Company's property plant and equipment& intangible assets:
a) (A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of property plant andequipment; (B) The Company has maintained proper records showing full particulars ofintangible assets
b) Company has a regular program for physical verification of its fixedassets in a phased manner which in our opinion is reasonable having regard to the sizeof the Company and the nature of its assets. Pursuant to the program certain fixed assetswere physically verified by the management during the year. According to the informationand explanations given to us no material discrepancies were noticed on such verification
c) The title deeds of all the immovable properties (other thanproperties where the company is the lessee and the lease agreements are duly executed infavor of the lessee) disclosed in the standalone financial statements are held in the nameof the Company
d) The Company has not revalued its property plant and equipment(including right-of-use assets) or intangible assets or both during the year
ii) In respect of the Company's inventory:
a) The Company is engaged in the business of climate change &sustainability advisory and carbon offsetting. In this nature of business inventory isnot available in physical form and thus its physical verification is impractical.However inventory are held in the form of credits which have been verified by themanagement at regular intervals. Accordingly provisions under clause 3(ii) (a) of theOrder are not applicable to the Company
b) The Company has been sanctioned working capital limits in excess offive crore rupees in aggregate from banks on the basis of security of current assets.Company has submitted monthly returns/ statements with banks. On examination of record wehave found slight variations in the financials submitted to bank(s) and financials as perbooks of accounts. Following table shows the quarterly summary of such variations:
(iii) The Company has not provided guarantee or security or grantedany advances in the nature of loans secured or unsecured to companies firms limitedliability partnerships or any other parties during the year other than the advances tostaff and suppliers in the ordinary course of its business which are not in the nature ofloan. The Company has made investments in other companies during the year.
a) During the year the Company has not provided loans or advances inthe nature of loans or stood guarantee or security to any other entity. Accordinglyprovisions under clause 3(iii)(a) of the Order are not applicable to the Company
b) The Company has not provided guarantees security or granted anyloans and advances in the nature of loans and guarantees to any person. The investmentsmade by the Company are not prejudicial to the company's interest
c) As the Company has not provided loans and advances in the nature ofloans provisions under clause 3(iii)(c) (d) (e) & (f) of the Order are notapplicable to the Company.
(iv) The Company has not given any loans or provided any guarantee orsecurity as specified under Section 185 of the Companies Act 2013 and the Company has notprovided any guarantee or security as specified under Section 186 of the Companies Act2013. Accordingly provisions under clause 3(iv) of the Order are not applicable to theCompany.
(v) The Company has not accepted deposits or amounts which are deemedto be deposits in terms of the directives issued by the Reserve Bank of India and theprovisions of sections 73 to 76 or any other relevant provisions of the Companies Act andthe rules made thereunder. Accordingly provisions under clause 3(v) of the Order are notapplicable to the Company.
(vi) The Company is not required to maintain cost records as specifiedby the Central Government under sub section (1) of section 148 of the Companies Act 2013.Accordingly the provisions under clause 3(vi) of the Order are not applicable to theCompany.
(vii) In respect to statutory dues:
a) The Company is regular in depositing undisputed statutory dues withthe appropriate authorities including goods and services tax provident fundemployees' state insurance income-tax sales-tax service tax duty of customs dutyof excise value added tax cess and any other statutory dues as applicable to it. Therewere no such undisputed amounts payable as at the last day of financial year 2021-22 for aperiod of more than six months from the date they became payable
b) There are no cases where the dues of goods and services taxprovident fund employees' state insurance income-tax sales-tax service tax dutyof customs duty of excise value added tax cess and any other statutory dues have notbeen deposited on account of any dispute.
(viii) The Company has not surrendered or disclosed any transactionspreviously unrecorded as income in the books of account in the tax assessments under theIncome-tax Act 1961 (43 of 1961) as income during the year. Accordingly the provisionsunder clause 3(viii) of the Order are not applicable to the Company.
(ix) In respect of loans & other borrowings:
a) The Company has not defaulted in repayment of loans and otherborrowings or in the payment of interest thereon to any lender. Accordingly theprovisions under clause 3(ix)(a) of the Order are not applicable to the Company
b) The Company has not been declared a willful defaulter by any bank orfinancial institution or other lender
c) The Company as not obtained any term loan during the year underAudit. Accordingly the provisions under clause 3(ix)(c) of the Order are not applicableto the Company
d) Funds raised on short term basis have not been utilized for longterm purposes
e) The company has not taken any funds from any entity or person onaccount of or to meet the obligations of its subsidiaries associates or joint ventures
f) The company has not raised loans during the year on the pledge ofsecurities held in its subsidiaries joint ventures or associate companies.
(x) In respect of initial public offer further public offerpreferential allotment or private placement:
a) Money raised by the Company by way of initial public offer duringthe year were applied for the purposes for which those were raised. The Company has notraised any moneys by way of further public offer (including debt instruments) during theyear
b) The Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.Accordingly the provisions under clause 3(x)(b) of the Order are not applicable to theCompany.
(xi) In respect of frauds by or on the Company:
a) Considering the principles of materiality outlined in Standards onAuditing we report that no fraud by the Company or on the Company has been noticed orreported during the year under Audit
b) No report under sub-section (12) of Section 143 of the CompaniesAct 2013 has been filed by the auditors in Form ADT-4 as prescribed under Rule 13 ofCompanies (Audit and Auditors) Rules 2014
c) No whistle blower complaints have been received during the financialyear under Audit. Accordingly the provisions under clause 3(xi)(c) of the Order are notapplicable to the Company.
(xii) The Company is not a Nidhi Company. Accordingly provisions underclause 3(xii)(a) (b) & (c) of the Order are not applicable to the Company.
(xiii) The transactions entered into by the Company with the relatedparties are in compliance with Sections 177 and 188 of Act wherever applicable and therequisite details have been disclosed in the standalone financial statements etc. asrequired by the applicable accounting standards.
(xiv) In respect of the Internal Audit System:
a) The company has an internal audit system commensurate with the sizeand nature of its business
b) We have considered the reports of the Internal Auditors for theperiod under audit.
(xv) The Company has not entered into any non-cash transactions withthe directors or persons connected with them covered under Section 192 of the Act.
(xvi) In respect of registration with Reserve Bank of India:
a) The Company is not required to be registered under Section 45-IA ofthe Reserve Bank of India Act 1934 (2 of 1934);
b) The Company has not conducted any Non-Banking Financial or HousingFinance activities & is not required to be registered under Section 45-IA of theReserve Bank of India Act 1934;
c) The Company is not a Core Investment Company ("CIC") asdefined in the regulations made by the Reserve Bank of India;
d) The Group does not have any CIC.
(xvii) The Company has not incurred cash losses in the currentfinancial year as well as in the immediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors duringthe year. Accordingly provisions under clause 3(xviii) of the Order are not applicable tothe Company.
(xix) According to the information and explanations given to us and onthe basis of the financial ratios ageing and expected dates of realization of financialassets and payment of financial liabilities other information accompanying the standalonefinancial statements our knowledge of the Board of Directors and management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report that the Company is not capable of meeting its liabilitiesexisting at the date of standalone balance sheet as and when they fall due within a periodof one year from the standalone balance sheet date. We however state that this is not anassurance as to the future viability of the Company. We further state that our reportingis based on the facts up to the date of the audit report and we neither give any guaranteenor any assurance that all liabilities falling due within a period of one year from thestandalone balance sheet date will get discharged by the Company as and when they falldue.
(xx) There is no unspent amount under sub-section (5) of Section 135 ofthe Companies Act 2013 pursuant to any project. Accordingly clauses 3(xx)(a) & (b)of the Order are not applicable. ANNEXURE: "B"
assets that could have material effect on the standalone financialstatements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TOSTANDALONE FINANCIAL STATEMENTS
Because of the inherent limitations of internal financial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of
REFERRED TO IN PARA 3(f) UNDER "REPORT ON OTHER LEGAL ®ULATORY REQUIREMENTS" SECTION OF OUR REPORT OF EVEN DATE TO THE MEMBERS OF EKIENERGY SERVICES LIMITED FOR THE YEAR ENDED 31st MARCH 2022.
Report on the Internal Financial Controls under clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the Internal Financial Control with reference tostandalone financial statements of EKI ENERGY SERVICES LIMITED ("the Company")as of 31st March 2022 in conjunction with our audit of the standalone financialstatements of the company as at and for the year ended on that date.
In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls were operating effectively as at 31st March 2022 based onthe internal control with reference to standalone financial statements 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 ("the Guidance Note").
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company's management is responsible for establishing andmaintaining internal financial controls with reference to standalone financial statementsbased on the criteria established by the company considering the essential components ofInternal control stated in the Guidance Note. These responsibilities include the designimplementation and maintenance 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 ("the Act").
Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to standalone financial statements based on ouraudit. We conducted our audit in accordance with the Guidance Note and the Standards onAuditing issued by the Institute of Chartered Accountants of India ("theICAI") prescribed under section 143(10) of the Act to the extent applicable to anaudit of internal financial controls with reference to standalone financial statements.Those Standards and the Guidance Note require that we comply with ethical requirement andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to standalone financial statements were established andmaintained and whether such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial Controls with reference to standalone financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to standalone financial statements included obtaining an understanding ofsuch internal financial controls assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depends on our judgment including theassessment of the risks of material misstatement of the standalone financial statementwhether due to fraud error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial control with reference to standalone financial statements.
MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONEFINANCIAL STATEMENTS
A company's internal financial control with reference tostandalone financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of standalonefinancial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control with reference tostandalone financial statements includes those policies and procedures that (1) pertain tothe maintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's
controls material misstatements due to error or fraud may occur andmay not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial control with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.