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Salem Erode Investments Ltd.

BSE: 540181 Sector: Financials
NSE: N.A. ISIN Code: INE894E01028
BSE 00:00 | 27 May 55.80 1.70
(3.14%)
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54.00

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56.15

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54.00

NSE 05:30 | 01 Jan Salem Erode Investments Ltd
OPEN 54.00
PREVIOUS CLOSE 54.10
VOLUME 143
52-Week high 122.45
52-Week low 4.01
P/E 56.94
Mkt Cap.(Rs cr) 64
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 54.00
CLOSE 54.10
VOLUME 143
52-Week high 122.45
52-Week low 4.01
P/E 56.94
Mkt Cap.(Rs cr) 64
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Salem Erode Investments Ltd. (SALEMERODEINV) - Auditors Report

Company auditors report

To the members of Salem Erode Investments Limited

Report on the Audit of the Standalone financial statements Opinion

We have audited the accompanying Standalone financial statements of M/s. Salem ErodeInvestments Limited ("the Company") which comprises the Balance Sheet as at31stMarch 2021 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe period then ended and a summary of the significant accounting policies and otherexplanatory 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 31stMarch 2021 its profit totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the Standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Standalone financial statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the Standalone financial statements under the provisionsof the Act and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit opinion on the Standalone financial statements.

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.

Serial No. Key Audit Matters Auditor's Response
1. Estimates in accuracy and authenticity of gold loan Due to the outbreak of Covid-19 we were unable to physically verify securities pledged against gold loan.
The alternative procedures applied in our audit to collect evidence is to assess the internal policies of the management for the techniques applied to ascertain the authentication of the securities pledged with. We have relied on the information details data documents and explanations as provided by the company and its officers and agents in electronic form without physically verifying their office.
2. Due to the pervasive nature and complexity of the IT environment we have ascertained IT systems and controls as a key audit matter. Tested the Company's periodic review of access rights. Considered the control environment relate to various interfaces configuration and other application layer controls identified as key to our audit.

Information other than the financial statements and auditor's report thereon.

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report Business Responsibility Report Corporate Governance and Shareholder'sInformation but does not include standalone financial statements consolidated financialstatements and our auditor's report thereon.

• Our opinion on the Standalone financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

• In connection with our audit of the Standalone financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially 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 Standalone financial 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 includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding 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 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 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 unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's responsibility 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 standalone 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 financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act 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 reasonablenessof accounting estimates and related disclosures made by the management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 standalone 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 cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone 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 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 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 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 in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

2. As required by Section 143(3) of the Act based on our audit 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 including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31st 2021 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us nomanagerial remuneration has been paid or provided during the financial year.

h) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements (Refer note 31).

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. An amount of '46335 were required to be transferred to the Investor Education andProtection Fund by the Company.

For Mohandas & Associates Chartered Accountants ICAI Firm Reg No: 02116S
Place: Thrissur

Date: 30-06-2021

Sd/- Mohandas A [Partner] Membership No.036726 UDIN:

ANNEXURE A

The Annexure A referred to in paragraph 1 under the heading "Report on other Legaland Regulatory Requirements" of our Report of even date to the members of the Companyon the accounts of the company for the period ended 31st March 2021.

On the basis of such checks as we considered appropriate and according to theinformation and explanation given to us during the course of our audit we report that:

i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.

b) All the Property Plant and Equipment have not been physically verified by themanagement during the period but there is a regular program of verification which in ouropinion is reasonable having regard to the size of the company and nature of its assets.No material discrepancies were noticed on such verification.

c) In our opinion and according to the information and explanation given to us thecompany does not hold any title deeds of immovable properties in its name.

ii) The Company is a Non Banking Finance Company engaged in the business of makinginvestments and providing loans and does not hold any type of inventory. Therefore theprovisions of paragraph 3(ii) of the Companies (Auditor's Report) Order 2016 are notapplicable to the Company.

iii) In our opinion and according to the information and explanations given to usduring the period the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013 ('the Act') .

iv) The Company has complied with the provisions of section 185 and 186 of theCompanies Act 2013 in respect of loans investments guarantees and securities made.

v) In our opinion and according to the information and explanations given to us theCompany has not accepted any Deposits from the public. Therefore the Directives issued bythe Reserve Bank Of India and the provisions of sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the Rules framed there under are not applicableto the Company. According to the information and explanations given to us the Company hasnot received any order from the Company Law Board or National Company Law Tribunal orReserve Bank of India or any Court or any other Tribunal in this regard.

vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Companies Act 2013 for any of the services rendered by the Company.

vii) a) According to information and explanations given to us and on the basis ofrecords produced before us for verification the Company is regular in depositing withappropriate authorities undisputed statutory dues including Employees' state insuranceincome-tax sales-tax service tax goods and service tax duty of customs duty ofexcise value added tax cess and any other statutory dues with the appropriateauthorities wherever applicable to it.

b) According to the information and explanation given to us there are no dues of salestax or service tax or goods and service tax or duty of customs or duty of excise or valueadded tax which have not been deposited on account of dispute except on account of IncomeTax as follows.

Name of the Statute Income Tax Act 1961
Nature of due Income Tax
Dispute Period FY 2007-2008
Amount Involved (') '839146/-
Forum where it is pending Commissioner of Income Tax (Appeals) Kolkata

viii) In our opinion and according to the information and explanation given to usCompany has not defaulted in repayment of loans or borrowing to any financialinstitutions banks Government or dues to debenture holders.

ix) In our opinion and according to the information and explanations given to us theCompany has not raised any moneys by way of initial public offer or further public offer(including debt instruments) and neither availed any term loan during the year.

x) According to the information and explanation given to us any fraud by the Companyor on any fraud on the company by its officers or employees has not been noticed orreported during the course of our audit.

xi) According to the information and explanations given to us and based on ourexamination of the records of the Company no managerial remuneration has been paid orprovided during the financial year.

xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.

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 the sections 177 and 188 of the Companies Act 2013 and the details ofsuch transactions have been disclosed in the Standalone financial statements of theCompany as required by the applicable accounting standards.

xiv) The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debenture during the period under review.

xv) According to the information and explanations given to us and based on ourexamination of the records the Company has not entered into non-cash transactions withdirectors or persons connected with them. Accordingly paragraph 3 (xv) of the Order is notapplicable.

xvi) According to the information and explanations given to us and based on ourexamination of the records the Company has obtained required registration under section45-IA of the Reserve Bank of India Act 1934.

For Mohandas & Associates

Chartered Accountants

ICAI Firm Reg No: 02116S

Sd/-
Mohandas A
[Partner]
Place: Thrissur Membership No.036726
Date:30-06-2021 UDIN:

ANNEXURE 'B'

Annexure 'B' to the Independent Auditors' Report of Salem Erode Investments Limited forthe period ended31stMarch 2021

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSubsection 3 of Section 143 of the Companies Act 2013 ('the Act')

We have audited the internal financial controls over financial reporting of SalemErode Investments Limited ('the Company') as of 31stMarch 2021 inconjunction with our audit of the Ind AS Standalone financial statements of the Companyfor the period 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 Financial Reportingissued by the Institute of Chartered Accountants of India ('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 including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 (the 'Standards') issued by ICAI anddeemed to be prescribed under section 143 (10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial 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 Standalone financial statements whether due to fraud orerror.

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 overfinancial 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 Standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that

(i) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(ii) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Standalone financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the company; and

(iii) 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 Standalone 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 over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31stMarch 2021 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the guidance noteissued by the ICAI.

For Mohandas & Associates

Chartered Accountants ICAI Firm Reg No: 02116S

Sd/-
Mohandas A
[Partner]
Place: Thrissur Membership No.036726
Date:30-06-2021 UDIN:

.