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Sarda Energy & Minerals Ltd.

BSE: 504614 Sector: Metals & Mining
NSE: SARDAEN ISIN Code: INE385C01013
BSE 00:00 | 20 Feb 203.15 0.10
(0.05%)
OPEN

203.35

HIGH

205.00

LOW

201.70

NSE 00:00 | 20 Feb 202.95 -0.75
(-0.37%)
OPEN

204.60

HIGH

205.15

LOW

200.25

OPEN 203.35
PREVIOUS CLOSE 203.05
VOLUME 2590
52-Week high 331.00
52-Week low 139.80
P/E 3.41
Mkt Cap.(Rs cr) 732
Buy Price 202.00
Buy Qty 1.00
Sell Price 203.15
Sell Qty 2.00
OPEN 203.35
CLOSE 203.05
VOLUME 2590
52-Week high 331.00
52-Week low 139.80
P/E 3.41
Mkt Cap.(Rs cr) 732
Buy Price 202.00
Buy Qty 1.00
Sell Price 203.15
Sell Qty 2.00

Sarda Energy & Minerals Ltd. (SARDAEN) - Auditors Report

Company auditors report

To the Members of

Sarda Energy & Minerals Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the standalone Ind AS financial statements of Sarda Energy &Minerals Limited ('the Company') which comprise the balance sheet as at 31st March 2019and the statement of Profit and Loss statement of changes in equity and statement of cashflows for the year then ended and notes to the financial statements including a summaryof significant accounting 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 Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2019 and profit/loss changes in equity and its cash flows forthe 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 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 other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report and Corporate Governance but does notinclude standalone financial statements and our auditors 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 financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing 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 Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance changes in equity and cash flows of the Companyin accordance 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 financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

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.

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

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.

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 controls 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 in place an adequate internal financial controls system over financialreporting and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by 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 ability ofthe company to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditors' report to the relateddisclosures in the standalone financial statements or if such disclosures are inadequateto modify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditors' report. However future events or conditions may cause the Companyto cease to continue 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 financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We 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 key audit matters in our audit report unless lawor regulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe 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 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 (including other comprehensiveincome) the statement of cash flows and the statement of changes in equity dealt with bythis Report are in agreement with the books of account;

(d) in our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with relevant ruleissued thereunder;

(e) on the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 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";

(g) with respect to the other matters to be included in the Auditors' Report inaccordance with the requirements of Section 197 (16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of Section 197 of the Act; and

(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 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 standalone Ind AS financial statements - Refer Note 39 to the standaloneInd AS financial statements;

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

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For O. P. Singhania & Co.
(ICAI Firm Regn. No.002172C)
Chartered Accountants
Sanjay Singhania
Partner
Raipur 25th May 2019 Membership No.076961

Annexure A to the Independent Auditor's Report

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone Ind AS financial statements for the year ended 31st March 2019 wereport that:

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

(b) As explained to us all major assets except certain low value items viz furniture& fixtures and office equipment have been physically verified by the management atreasonable intervals. According to the information and explanation given to us nomaterial discrepancies were notice.

(c) The title deeds of immovable properties as disclosed in Note 2 on property plantand Equipments to the financial statements are held in the name of the Company except theimmovable properties of merged companies which has still carried on the name of erstwhilecompanies and are yet to be updated in revenue records.

(ii) As explained to us the physical verification of inventories have been conductedat reasonable intervals by the management during the year. In our opinion the frequencyof the verification is reasonable. The discrepancies noticed on verification between thephysical stocks and the book records were not material and have been properly dealt within the books of account.

(iii) The company has granted unsecured loan to four companies and one LimitedLiability Partnership covered in the register maintained under section 189 of thecompanies Act 2013 during the year. According to the information and explanations givento us and based on the audit procedures conducted by us we are of the opinion that:

(a) The terms & conditions of the grant of such loan are not prejudicial to theinterest of the Company.

(b) As explained to us the principal amounts are repayable on demand whereas theinterest is payable annually at the discretion of the Company and the repayments orreceipts are regular.

(c) Since the amount outstanding is not overdue therefore the provisions of clause 3(iii)(c) of the Companies (Auditor's Report) Order 2016 are not applicable to thecompany.

(iv) In our opinion and according to the information & explanations given to usthe Company has compiled with the provisions of Section 186 of the Companies Act 2013 inrespect of the loans and investment made and guarantees and security provided by it. TheCompany has not granted any loans and made any investments or provided any guarantees orsecurity to the parties covered under Section 185 of the Companies Act 2013.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from public in terms of the directives issued bythe Reserve Bank of India and the provisions of Section 73 to 76 or any other relevantprovisions of the Companies Act and rules framed thereunder; therefore the provisions ofclause 3(v) of the Companies (Auditor's Report) Order 2016 are not applicable to theCompany.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 in respect of Company's products to which thesaid rules are made applicable and are of the opinion that prima facie the prescribedaccounts and records have been made and maintained. We have however not made a detailedexamination of the records.

(vii) (a) According to the information & explanations given to us during the yearthe Company is regular in depositing undisputed statutory dues including provident fundemployees' state insurance income tax goods & services tax duty of customs cessand any other statutory dues with the appropriate authorities. Further no undisputedamounts of statutory dues as stated above were in arrears as at 31st March 2019 for aperiod of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofincome tax sales tax service tax goods & services tax custom duty excise dutyvalue added tax and cess which have not been deposited on account of any dispute exceptthe following cases:

Name of the Statute Nature of the Dues Amount (' in Lakh) Period to which the amount relates Forum where dispute is pending
Central Excise Act 1944 Excise Duty 20.57 Mar 1986 to Oct 1988 At M.P. High Court
Central Excise Act 1944 Excise Duty 7.62 Mar 1989 to Aug 1989 Commissioner (Appeals)
Central Excise Act 1944 Excise Duty 808.17 2015-16 Customs Excise & Service
Penalty 808.54 Tax Appellate Tribunal
Central Sales Tax Act & Sales Tax Acts of Various states and Entry Tax Act 1976 Value Added Tax Central sales tax and Entry tax. 922.74 2006-07 to 2012-13 Appellate Authorities upto Commissioner's level
Chhatisgarh Upkar Adhiniyam 1981 Energy Development Cess 6079.20 May 2006 to Jan 2017 Supreme Court

(viii) Based on our audit procedures and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings to anyfinancial institution or bank or Government or debenture holders as at the balance sheetdate.

(ix) The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments). According to the information and explanationsgiven to us and in our opinion the term loans have been applied progressively for thepurpose for which the loans were obtained.

(x) In our opinion and according to the information and explanations given to us nofraud by the Company or on the Company by its officers or employees has been noticed orreported during the year. Therefore the provisions of clause 3(x) of the Companies(Auditor's Report) Order 2016 are not applicable to the Company.

(xi) The Company has provided for managerial remuneration during the year in accordancewith the requisite approvals mandated by the provisions of Section 197 read with ScheduleV of the Companies Act 2013.

(xii) As the Company is not a Nidhi Company and the Nidhi Rules 2014 are notapplicable to it. Therefore the provisions of clause 3(xii) of the Companies (Auditor'sReport) Order 2016 are not applicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act and details of such transactions have beendisclosed in the standalone Ind AS financial statements as required by the applicableaccounting standards.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review. Thereforethe provisions of clause 3(xiv) of the Companies (Auditor's Report) Order 2016 are notapplicable to the Company.

(xv) The Company has not entered into any non-cash transactions with its directors orpersons connected with him. Therefore the provisions of clause 3(xv) of the Companies(Auditor's Report) Order 2016 are not applicable to the Company.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Therefore the provisions of clause 3(xvi) of the Companies(Auditor's Report) Order 2016 are not applicable to the Company.

For O. P. Singhania & Co.
(ICAI Firm Regn. No.002172C)
Chartered Accountants
Sanjay Singhania
Partner
Raipur 25th May 2019 Membership No.076961

Annexure B to the Independent Auditor's Report

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

We have audited the internal financial controls over financial reporting of SardaEnergy & Minerals Limited ("the Company") as of 31st March 2019 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor 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 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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our 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 Ind AS financial statements whether due to fraudor error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2019 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 O. P. Singhania & Co.
(ICAI Firm Regn. No.002172C)
Chartered Accountants
Sanjay Singhania
Partner
Raipur 25th May 2019 Membership No.076961