To the Members
Globus Power Generation Limited
Report on the Financial Statements
Financial Year ended on 31.03.2020
We have audited the financial statements of Globus Power Generation Limited whichcomprise the balance sheet as at 31st March 2020 and the statement of Profit and Loss andstatement Statement of change in equity and Statements of cash flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies 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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2020 and profit/loss and change in equity and its cash flows for the yearended on that date.
2. Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.
3. Material uncertainty Related to Going concern
We draw attention to Note No. 18 Going Concern Assumption of the FinancialStateme nts which indicates that the company has incurred substantial losses ofRs7458875/- (LY Rs. 6913923/-). Out of this the cash loss incurred during the year isRs. 6384600/- (LY Rs. 5833363/-). This indicates the existence of material uncertaintythat may cast significant doubt about the company's ability to continue as a goingconcern. However the financial statements of the Company have been prepared on a goingconcern basis for the reasons stated in the said Note. Our opinion is not qualified inrespect of this matter.
4. Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon. We Communicate a significant matter through this para that" due to the corona virus pandemic prevalent in the country it is quite likely thatthe value of long term investment made by the company may not subsist as such in nearfuture due to impact of reduced economic activities in the country.
In addition to the matter described in the Material Uncertainty Related to GoingConcern section we have determined the matters described below to be the key auditmatters to be communicated in our report.
|DESCRIPTION OF KEY AUDIT MATTER ||AUDITOR'S RESPONSE |
|(i) Trade receivables and loans & advances' given of the company are carried at amortized cost Rs. 388109412 (PY Rs. 490647135) and Rs. 94307 (PY Rs. 94307) respectively. In calculating the amortized cost the discount rate has been determined on an estimated basis as per the prevalent rates in the market. This estimate involves significant judgment by the management. ||We evaluated the significant judgements of the management within the going concern model by comparing them to the discounting rates generally prevalent in the market in the preparation of financial statements and then benchmarking them against the market observable external data. |
|(ii)Trade Payables and other noncurrent financial liabilities' of the company are carried at amortized cost Rs. 54119730 (PY 146283653) and Rs. 32498476 (PY 36553704) respectively. In calculating the amortized cost the discount rate has been determined on an estimated basis as per the prevalent rates in the market. This estimate involves significant judgment by the management. ||We evaluated the significant judgments of the management within the going concern model by comparing them to the discounting rates generally prevalent in the market in the preparation of financial statements and then benchmarking them against the market observable external data. |
5. Other Information:
The company's Board of Directors is responsible for the other information. The otherinformation comprises financial and non-financial information included in the entity'sAnnual Report or Management Report but does not include the Financial Statements andIndependent Auditor's Report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon. SA720 "Auditor'sResponsibilities relating to Other Information requires that in connection with ouraudit of the financial statements Independent Auditor's 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 in the audit orotherwise appears to be materially misstated. If based on the work we have performed weconclude that there is a material misstatement of this other information we are requiredto report that fact. We have nothing to report in this regard since SA 720 is notapplicable at RO level.
6. Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act) with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the accountingStandards specified under section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate implementation andmaintenance of accounting policies; making judgments and estimates that 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 theCompany's financial reporting pr ocess.
7. Auditor's Responsibilities for the Audit of the 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 highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
8. Report on Other Legal and Regulatory Requirements
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 Companies Act 2013 we give in the Annexure A' statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
9. 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 theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on that date from being appointed as a director in terms of Section 164(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'.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements -No such impact on financial position.
ii. The Company did not have any long-term contracts including derivative contracts forwhich 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.
For Padam Dinesh & Co. Chartered Accountants Firm Regn.No. : 009061N
UDIN : 20084226AAAABE3540
Place: New Delhi
ANNEXURE A' (CARO)
(Financial Year ending on 31.03.2020) GLOBUS POWER GENERATION LIMITED
(Referred to in paragraph 8' of our report of even date)
|1. a Whether the company is maintaining proper records showing full particulars including quantitative details and situation of fixed assets ||Yes. |
|b Whether these fixed assets have been physically verified by the management at reasonable intervals; whether any material discrepancies were noticed on such verification and if so whether the same have been properly dealt with in the books of account; ||Yes No material discrepancies were noticed. |
|c Whether the title deeds of immovable properties are held in the name of the company. If not provides the details thereof; ||There is no Immovable property in the company |
|2. Whether physical verification of inventory has been conducted at reasonable intervals by the management and whether any material discrepancies were noticed and if so whether they have been properly dealt with in the books of account; ||No inventory held. |
|3. Whether the company has granted any loans secured or unsecured to companies firms or other parties covered in the register maintained under section 189of the Companies Act. If so ||No such loans have been granted during the year or outstanding at the end of the year. |
|a Whether the terms and conditions of the grant of such loans are not prejudicial to the company's interest; ||NA |
|b whether the schedule of repayment of principal and payment of interest has been stipulated and whether the repayments or receipts are regular; ||NA |
|c if the amount is overdue state the total amount overdue for more than ninety days and whether reasonable steps have been taken by the company for recovery of the principal and interest; ||NA |
|4. in respect of loans investments guarantees andsecurity whether provisions of section 185 and 186 of the Companies Act 2013 have been complied with. If not provide the details thereof. ||Yes they have been complied wherever applicable. |
|5. in case the company has accepted deposits whether the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under where applicable have been complied with? If not the nature of such contraventions be stated; If an order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any court or any other tribunal whether the same has been complied with or not? ||No such deposits are accepted. |
|6. whether maintenance of cost records has been specified by the Central Government under sub -section (1) of section148 of the Companies Act 2013 and whether such accounts and records havebeen so made and maintained. ||No such cost records are prescribed. |
|7. a whether the company is regular in depositing undisputed statutory dues including provident fund employees' state insurance income-tax sales-tax service tax duty of customs duty of excise value added tax cess and any other statutory dues to the appropriate authorities and if not the extent of the arrears of outstanding statutory dues as on the last day of the financial year concerned for a period of more than six months from the date they became payable shall be indicated; ||Yes and there is no such over dues. |
|b where dues of income tax or sales tax or service tax or duty of customs or duty of excise or value added tax have not been deposited on account of any dispute then the amounts involved and the forum where dispute is pending shall be mentioned. ||Following Income Tax demands u/s 148/143(3) are showing outstanding. It is stated to us that the matter is pending in rectification/ appeal at various appellate stages in the name of erstwhile company M/s CITCPL. (Merged with GPGL) |
|(A mere representation to the concerned department shall not be treated as a dispute). |
| ||AY 2009-10 u/s 148 ||Rs 2841268/- |
| ||AY 2010-11 u/s 148 and u/s 143(3). ||Rs 4435035/- and Rs 474950/- |
| ||AY 2011-12 u/s 263 and u/s 143(3). ||Rs 304711/- and Rs 30340/- |
| ||TDS defaults ||Rs 115281/- |
|8. whether the company has defaulted in repayment of loans or borrowing to a financial institution bank Government or dues to debenture holders? If yes the period and the amount of default to be reported (in case of defaults to banks financial institutions and Government lender wise details to be provided). ||There is no such borrowing. |
|9. whether moneys raised by way of initial public offer or further public offer (including debt instruments) and term loans were applied for the purposes for which those are raised. If not the details together with delays or default and subsequent rectification if any as may be applicable be reported; ||No such money is raised by IPO or FPO or Term Loan during the year. |
|10 whether any fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year; If yes the nature and the amount involved is to be indicated; ||No such fraud is noticed or reported. |
|11 whether managerial remuneration has been paid orprovided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act? If not state the amount involved and steps taken by the company for securing refund of the same; ||No such requisite approval is applicable to the company. |
|12 whether the Nidhi Company has complied with the net Owned Funds to Deposits in the ratio of 1: 20 to meet out the liability and whether the Nidhi Company is maintaining ten per cent unencumbered term deposits as specified in the Nidhi Rules 2014 to meet out the liability; ||N.A. |
|13 whether all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act 2013 where applicable and the details have been disclosed in the Financial Statements etc. as required by the applicable accounting standards; ||Yes. The details of related party transactions have been disclosed wherever there in financial statements etc as required by the applicable accounting standards. |
|14 whether the company has made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and if so as to whether the requirement of section 42 of the Companies Act 2013 have been complied with and the amount raised have been used for the purposes for which the funds were raised. If not provide the details in respect of the amount involved and nature of non-compliance; ||No such allotment is made during the year. |
|15 whether the company has entered into any noncash transactions with directors or persons connected with him and if so whether the provisions of section 192 of Companies Act 2013 have been complied with; ||No such non cash transaction is entered with directors etc. |
|16 whether the company is required to be registered under section 45-IA of the Reserve Bank of India Act 1934 and if so whether the registration has been obtained. ||No such requirement is applicable to the company. |
For Padam Dinesh & Co.
Firm Regn No.: 009061N
UDIN : 20084226AAAABE3540
Place: New Delhi
ANNEXUREB' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in Paragraph 9(F) our report of even date)
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 GlobusPower Generation Limited as of March 31 2020 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting' criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting' issued by the Institute of Chartered Accountants of India. 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.
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 FinancialReporting' and the Standards on Auditing issued by ICAI and deemed to be prescribed undersection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects. Our audit involves performing procedures toobtain audit evidence about the adequacy of the internal financial controls system overfinancial reporting and their operating effectiveness. Our audit of internal financialcontrols over financial reporting included obtaining an understanding of internalfinancial controls over financial reporting assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on theCompany's internal financial controls system over 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 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 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.
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 March 31 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 Padam Dinesh & Co. Chartered Accountants Firm Regn No.: 009061N
UDIN : 20084226AAAABE3540
Place: New Delhi