To the Members of Selan Exploration Technology Limited
Report on the Financial Statements
We have audited the accompanying Ind AS financial statements of SELAN EXPLORATIONTECHNOLOGY LIMITED ("the Company") which comprise the Balance Sheet as at 31March 2020 the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of 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 Ind AS financial statements give the information required bythe 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 relevant rules issued thereunder and other accounting principlesgenerally accepted in India:
a) of the state of affairs of the Company as at 31 March 2020;
b) of the profit (including Other Comprehensive Income) for the year ended on thatdate;
c) of the changes in equity for the year ended on that date; and
d) of the 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 Act. Our responsibilities under those Standards are furtherdescribed in the Auditor Responsibilities for the Audit of the Ind AS financial statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theindependence requirements that are relevant to our audit of the Ind AS financialstatements under the provisions of the Act and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI Code of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion on the Ind AS financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matter described below to be the key audit mattersto be communicated in our report.
|Key Audit Matter ||Auditor Response |
|Accuracy of recognition measurement presentation and disclosures of revenue from sale of crude oil in accordance with Ind AS 18 "Revenue recognition." ||Principal Audit Procedures |
|Revenue from sale of crude oil forms significant portion of total revenue of the Company which has a material impact on Ind AS Financial Statements. There exists a risk of error resulting in overstatement or understatement of revenue due to incorrect recording of sales or recording of sales in an incorrect period. ||We made enquiries of management and analyzed contracts to evaluate whether revenue was recognised in accordance with their terms. We also performed procedures to address the risk of error in accounting records and the ability to override controls |
|Therefore we consider the abovementioned issues to be a key audit matter. || We cross-verified the Sales contract with the respective invoices and delivery documents. |
| || We cross verified the sales value recorded in the accounting records with respective invoices and delivery documents. |
| || We checked the pipeline transit (PLT) loss with delivery receipt and documents. |
| || We tested the appropriateness of journal entries impacting revenue from sale of crude oil using data extracted from the accounting system as well as other adjustments made in the preparation of the financial statements. |
| || We verified the payment collection from customers. |
| || We also cross-checked the sales volume and value with the statutory taxes paid in the form of VAT Royalty and Cess on sale of crude oil which is based on sales volume and value. |
| || We checked whether the product was delivered to the customer on or before close of financial year for which revenue has been recognised during the period. |
| || The accounting records was checked for arithmetical accuracy. |
| || We cross-checked the relevant debtors balances with the payments that were received subsequent to year-end. |
| ||We consider that revenue is recognised in accordance with sales agreements and Ind AS 18. We also consider the financial statements disclosures with respect to revenue are reasonable and adequate. |
Information Other than the Standalone Ind AS Financial Statements and Auditor Reportthereon
The Company Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Directors Report including Annexures to Directors ReportCorporate Governance and Shareholder Information but does not include the standalone IndAS financial statements and our auditor report thereon. Our opinion on the standalone IndAS financial statements does not cover the other information and we do not express anyform of assurance conclusion thereon. In connection with our audit of the standalone IndAS financial statements our responsibility is to read the other information and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained during the course of our audit or otherwiseappears to be materially misstated. If based on the work we have performed we concludethat there is a material misstatement of this other information we are required to reportthat fact. We have nothing to report in this regard.
Management Responsibility for the Standalone Ind AS Financial Statements
The Company Board of Directors is responsible for the matters stated in section 134(5)of the Act with respect to the preparation of these Ind AS financial statements that givea true and fair view of the state of affairs (financial position) profit or loss(financial performance including Other Comprehensive Income) cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) specified under section 133 ofthe Act read with relevant rules issued thereunder.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the Ind AS financial statements Management is responsible for assessingthe Company 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 theCompany financial reporting process.
Auditors Responsibility for the Audit of the Standalone Ind AS Financial Statements
Our responsibility is to express an opinion on these Ind AS financial statements basedon our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement. Reasonable assurance is a high level of assurance but is not a guaranteethat an audit conducted in accordance with SAs will always detect a material misstatementwhen it exists. Misstatements can arise from fraud or error and are considered materialif individually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of this Standalone Financial Results.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Companypreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of the accounting principles usedand the reasonableness of the accounting estimates made by company Directors as well asevaluating the overall presentation of the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanation given to us wegive in "Annexure A" a statement on the matters specified in the paragraph 3 and4 of the said Order.
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 Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account;
(d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with the Companies(Indian Accounting Standards) (Amendment) Rules 2016;
(e) On the basis of written representations received from the Directors as on 31 March2020 and taken on record by the Board of Directors none of the Directors is disqualifiedas on 31 March 2020 from being appointed as a Director in terms of Section 164(2) of theAct.
(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 Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended bythe Companies (Audit and Auditors) Rules 2017 in our opinion and to the best of ourknowledge and information and according to the explanations given to us:
(i) The Company does not have any pending litigation which would impact its financialposition;
(ii) There is no long-term contracts including derivative contracts requiringprovision for material foreseeable losses under the applicable law or accountingstandards;
(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;
Annexure -A REFERRED TO IN THE AUDITORSRs. REPORT TO THE MEMBERS OF SELAN EXPLORATIONTECHNOLOGY LIMITED ON THE
ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2020.
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Management has physically verified the fixed assets during the year and thefrequency of which in our opinion is reasonable. No material discrepancies were noticedon such physical verification.
(c) The Company does not own any Land and hence clause 3(i) (c) is not applicable tothe Company.
(ii) The inventory of the Company consisting of crude oil spares and consumables havebeen physically verified once during the year. In our opinion the frequency ofverification is reasonable. No material discrepancies were noticed on such physicalverification.
(iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered
in the register maintained under section 189 of the Companies Act 2013. Therefore theprovisions of clause 3(iii) (a) (b) & (c) of the Order are not applicable to theCompany.
(iv) The Company has not given any loan or nor furnished any guarantee nor provided anysecurity to the parties covered under section 185 of the Companies Act 2013. The Companyhas not given any loans or made any investments or provided guarantees or security. Henceclause 3(iv) is not applicable to the Company.
(v) The Company has not accepted any deposits from the public within the meaning ofsections 73 to 76 of the Act and the rules framed there under. We are informed by theManagement that no order has been passed by the Company Law Board or National Company LawTribunal or Reserve Bank of India or any court or any other Tribunal in this regard.
(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto the rules made under sub-section (1) of Section 148 of the Act for maintenance of costrecords and are of the opinion that prima facie the prescribed accounts and records havebeen maintained. We have however not made a detailed examination of cost records with aview to determine whether they are accurate and complete.
(vii) (a) According to the information and explanations given to us and according tothe records of the Company examined by us in our opinion the Company has been generallyregular in depositing with the appropriate authorities undisputed statutory dues includingprovident fund employees state insurance income-tax sales tax service tax duty ofcustom duty of excise value added tax cess goods and service tax and other statutorydues wherever applicable.
According to the information and explanations furnished to us no undisputed amountspayable in respect of aforesaid dues were outstanding as on 31 March 2020 for a period ofmore than six months from the date they became payable.
(b) According to the records of the Company there are no disputed dues relating toIncome-tax Sales Tax Service Tax duty of Excise Value Added Tax Goods and Service Taxor cess which have remained unpaid as on 31 March 2020.
(viii) Based on our verification and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowing to financialinstitutions Banks Government.
(ix) The Company had not raised money by way of initial public offer or further publicoffer (including debt instruments) during the year and hence clause 3(ix) is notapplicable to the Company.
(x) Based on the audit procedures adopted and information and explanations furnished tous by the management no case of material fraud on or by the Company has been noticed orreported during the course of our audit.
(xi) The managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theCompanies Act 2013.
(xii) The Company is not a nidhi company. Hence the provisions of clause 3(xii) of theOrder are not applicable to the Company.
(xiii) In our opinion and according to the information and explanations given to usthe Company has complied with the provisions of section 177 and section 188 of the Act inrespect of transactions with the related parties and the details have been disclosed inthe Ind AS financial statements as required by the applicable Indian accounting standards.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under audit andaccordingly provisions of clause (xiv) of Para 3 of the Order are not applicable to theCompany.
(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with them.Hence the provisions of clause 3(xv) of the Order are not applicable to the Company.
(xvi) According to the information and explanations given to us the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.
Annexure B - REFERRED TO IN THE AUDITORS REPORT TO THE MEMBERS OF SELAN EXPLORATIONTECHNOLOGY LIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31 MARCH 2020.
Report on the Internal Financial Controls over Financial Reporting under clause (i) ofsub-section 3 of section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of SelanExploration Technology Limited ("the Company") as of 31 March 2020 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended on that date.
Management Responsibility for Internal Financial Controls
The Company 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 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 Act.
Our responsibility is to express an opinion on the Company internal financial controlsover financial reporting based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting (the"Guidance Note") and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsboth issued by the Institute of Chartered Accountants of India. 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 judgement including the assessment of the risks ofmaterial misstatement of the Ind AS 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 Company internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company internal financial control over financial reporting is a process designed toprovide reasonable assurance regarding the reliability of financial reporting and thepreparation of Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company assets that could have a material effect on the Ind ASfinancial 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 31 March 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 J.A. Martins & Co |
| ||Chartered Accountants |
| ||(Firm Regn. No. 010860N) |
| ||J.A Martins |
|Place: New Delhi ||Proprietor |
|Date: 18 July 2020 ||M.No. 082051 |