Members of Mercury Metals Limited
Report on the Audit of Standalone Financial Statements
We have audited the accompanying standalone financial statements of M/s. MERCURY METALSLIMITED ("the Company"] which comprise the Balance Sheet as at 31st March 2020the Statement of Profit & Loss for the year then ended (Including Other ComprehensiveIncome] the cash flow statement and the changes in equity for the year ended on that dateannexed thereto and a summary of significant accounting policies and other explanatoryinformation.
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 in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards prescribed under section 133 of the Actread with the Companies (Indian Accounting Standards] Rule 2015 as amended ("IndAS"] and other accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2020 the loss and total comprehensive incomechange in equity and its cash flows for the year ended on that date.
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 Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion.
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 and we do not provide a separate opinion on these matters.
Information Other than the 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 Board'sReport including Annexures to Board's Report Business Responsibility Report but does notinclude the financial statements and our 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.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the standalone financial statements or our knowledge obtainedduring 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.
Management's Responsibility for the 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 standalone financial statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the accounting Standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the company's financialreporting process Auditor's Responsibility For 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.
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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
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 responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of 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 Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions 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 statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
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 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 withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits 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 Companies Act 2013 we give in the Annexure A a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
2. As acquired 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 purpose of our audit
b. In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;
c. The Balance Sheet Statement of Profit and Loss including Other comprehensiveincome Statement of change in equity and the Statement of Cash flow statement dealt withby 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 Companies (IndianAccounting Standards) Rules 2015 as amended;
e. On the basis of written representations received from the directors as on 31st March2020 and taken on record by the Board of Directors none of the directors is disqualifiedas on 31st March 2020 from being appointed as a director in terms of Section 164(2) ofthe 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 - Refer Note 29 to the financial statements;
ii The Company did not have any long-term contracts including derivative contracts forwhich there were any material forseeable losses.
iii There were no amount which were required to be transferred to the InvestorsEduction and Protection Fund by the company.
For AMBALAL PATEL & CO. Chartered Accountants Firm Reg. No. : 100305W
CA NIKUNJ PATLIA Partner M.No. 131220 UDIN:20131220AAAADH2452 Ahmedabad 26/06/2020
ANNEXURE TO INDEPENDENT AUDITOR'S REPORT
(Referred to paragraph 1 under the heading of "Report on Other Legal andRegulatory Requirements" of our
report of even date.)
(i) (a) The company does not own any fixed assets on its name hence no recordsrequired to be maintained for
(b) As there are no fixed assets this clause is not applicable
(c) There is no immovable property held in the name of the company hence relevantclause is not applicable.
(ii) As explained to us physical verification of inventory has been conducted by themanagement at the end of the year in respect of inventory and there are no materialdiscrepancies noticed;
(iii) According to the information explanation given to us company has not granted anyloans secured or unsecured to companies firms Limited Liability Partnerships or otherparties covered in the register maintained under section 189 of the Companies Act 2013
(iv) In respect of loans investments guarantees and security Company has compliedthe provisions of section 185 and 186 of the Companies Act 2013 .
(v) The Company has not accepted any deposites from public and hence the provision ofsection 73 and 76 or any other relevant provisions of the Companies Act and the rulesframed there under are not applicable to Company.
(vi) In our opinion and according to the information and explanations given to usmaintenance of cost records has not been prescribed by the Central Government undersection 148(1) of the Companies Act 2013 for any products of the company.
(vii) (a) According to the information and explanation given to us and the books andrecords examined by us
there are no undisputed amounts payable in respect of Income-tax VAT Goods andService Tax outstanding as at 31st March 2020 for a period exceeding six months from thedate they became payable.
(b) On the basis of our examination of the documents and records there is no disputedamount pending in respect of any statutory dues.
(viii Based on our audit procedure and on the information and explanation given by themanagement we are of the ) opinion that the company has not defaulted in repayment ofdues to the bank during the year under review.
(ix) Company has not raised money by way of initial public offer or further publicoffer (including debt instruments) and term loans under review.
(x) According to the information and explanation given to us and to the best of ourknowledge and belief no fraud on or by the company has been noticed or reported by thecompany during the year.
(xi) Based on our audit procedure and books examined by us Company has paid managerialremuneration in accordance with the the provisions of section 197 read with Schedule V tothe Companies Act.
(xii) Since the company is not Nidhi Company relevant clause of CARO 2016 is notapplicable to the company.
(xiii According to information and explanation given to us all transactions with therelated parties are in ) compliance with sections 177 and 188 of Companies Act 2013 whereapplicable and the details have been disclosed in the Financial Statements etc. asrequired by the accounting standard 18.
(xiv According to information and explanation given to us the company has not made anypreferential allotment or ) private placement of shares or fully or partly convertibledebentures during the year and so company is not required to comply section 42 of theCompanies Act 2013.
(xv) According to information and explanation given to us the company has not enteredinto any non-cash transactions with directors or persons connected with him and companyhas been complied the provisions of section 192 of Companies Act 2013.
(xvi According to information and explanation given to us the company is not requiredto be registered under ) section 45-IA of the Reserve Bank of India Act 1934.
For AMBALAL PATEL & CO.
Firm Reg. No. : 100305W
CA NIKUNJ PATLIA
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013
We have audited the internal financial controls over financial reporting of MercuryMetals Limited as at 31 March 2020 in conjunction without audit of the standalone Ind ASfinancial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
Management is responsible for establishing and maintaining internal financial controlsbased on the essential components of internal control stated in the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting ('the Guidance Note') issued bythe Institute of Chartered Accountants of India ('the ICAI')". These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required by The Companies Act 2013('the Act').
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 and the Standards on Auditing ('the Standards') issued by the ICAIand deemed to be prescribed under section 143(10) of the Act to the extent applicable toan audit of internal financial controls both issued by the ICAI. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively 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 judgment 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 companies internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
Company's internal financial control over financial reporting is a 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. 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
control over financial reporting may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.
In our opinion the Company has in all material respects adequate internal financialcontrols over financial reporting with reference to these standalone Ind AS financialstatements and such internal financial controls over financial reporting with reference tothese standalone Ind AS financial statements were operating effectively as at March 312020 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.
For AMBALAL PATEL & CO.
Chartered Accountants Firm Reg. No. : 100305W
CA NIKUNJ PATLIA