SRM Energy Ltd.
|BSE: 523222||Sector: Infrastructure|
|NSE: N.A.||ISIN Code: INE173J01018|
|BSE 00:00 | 29 Jul||3.57||
|NSE 05:30 | 01 Jan||SRM Energy Ltd|
SRM Energy Ltd. (SRMENERGYLTD) - Auditors Report
Company auditors report
To The Members of SRM Energy Limited
Report on the Audit of the Standalone Ind AS Financial
We have audited the accompanying standalone Ind AS financial statementsof SRM Energy Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2020 the statement of Profit and Loss (including other Comprehensive Income)the Cash Flow Statement and the Statement of Changes in Equity for the year then endedand notes to the financial statement including a summary of the significant accountingpolicies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of state of affairsof the Company as at March 2020 and loss Changes in equity and its cash flows for theyear ended on that date.
Basis for Opinion
We conducted our audit in accordance with the standards on Auditingspecified under section 143 (10) of the Companies Act 2013. Our responsibilities underthose Standards are further described in the auditor's responsibilities for the audit ofthe financial 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 Act and the rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and thecode of ethics.We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Material Uncertainty Related to Going Concern Attention of the mattersis invited to note no.28 of the notes to accounts regarding the financial statements ofthe Company having been prepared on a Going Concern basis the Company's net worth hasbeen significantly reduced and it has been incurring cash losses and the promoters haveinfused funds by way of unsecured loan and are committed to provide necessary funding tomeet the liabilities and future running expenses of the Company. Further pursuant toapproval obtained from shareholders to sale/transfer assign deliver or otherwise disposeoff the Land for the Power plant admeasuring 215.14 acres currently in the name of itswholly owned subsidiary the subsidiary company has sold its land admeasuring 97.68 acresfor Rs. 293.02 Lacs during the current financial year and the sale proceeds as received isbeing used to partially settle the pending loan. The Subsidiary company incurred a loss ofRs. 226.15 Lacs during the current financial year on sale of land. Till now approx. 55% ofthe land are unsold. In view of aforesaid the accounts have been prepared under goingconcern basis.
Our opinion is not modified in respect to this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Standalone Financial Statements of thecurrent period. These matters were addressed in the context of our audit of the StandaloneFinancial Statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
Information Other than the financial statements and auditors' reportthereon
The Company's board of directors is responsible for the preparation ofthe other information. The other information comprises the information included in theBoard's Report including Annexures to Board's Report Business Responsibility Report butdoes not include the financial statements and our auditor's report thereon.
Our opinion on the 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 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 amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Management's responsibility for the financial statements
The Company's Board of Directors are responsible for the matters statedin section 134 (5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financial performanceand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the accounting standards specified under section 133 of theAct. 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 financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements management 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 theCompany's financial reporting process.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether thefinancial 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 financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial 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 control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls system in placeand the operating effectiveness of such controls
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's 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 thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the StandaloneFinancial Statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the Standalone FinancialStatements may be influenced. We consider quantitative materiality and qualitative factorsin (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 amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because
the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit wereport that:
a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account.
d) In our opinion the aforesaid standalone Ind AS financial statementscomply with the Indian Accounting Standards prescribed under section 133 of the Act readwith rule 7 of the Companies (Accounts) Rule 2014.
e) On the basis of the written representations received from thedirectors as on March 31 2020 taken on record by the Board of Directors none of thedirectors are disqualified as on March 31 2020 from being appointed as a director interms of Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in "Annexure A". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting.
g) In our opinion and to the best of our information and according tothe explanations given to us we report as under with respect to other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014:-
(i) The Company has disclosed the impact of pending
litigations on its financial position in its financial statements-ReferNote 18 on Contingent Liabilities;
(iii)There has not been an occasion in case of the Company during theyear under report to transfer any sums to the Investor Education and Protection Fund. Thequestion of delay in transferring such sums does not arise.
2. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government in terms of Section 143(11) ofthe Act we give in the "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
For VATSS & Associates
Regn. No.017573N Chartered Accountants
Place: New Delhi
Dated: : 30/06/2020
TO THE INDEPENDENT AUDITORS' REPORT annexure -a-
(Referred to in paragraph 1(f) under 'Report on Other Legal andRegulatory Requirements' of our Report of even date) Report on the Internal FinancialControls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")
We have audited the internal financial controls over financialreporting of SRM ENERGY LIMITED ("the Company") as of March 31 2020 inconjunction with our audit of the financial statements of the Company for the year endedon that date. Management's Responsibility for Internal Financial Controls The Company'smanagement is responsible for establishing and maintaining internal financial controlsbased on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial reporting issued by the Institute ofChartered Accountants of India. These responsibilities include the design implementationand maintenance or adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation or reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment or therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A Company's 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 financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods arc subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best our information and according to theexplanation given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofinternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For VATSS & Associates
Suresh Kumar Arora
Membership No. 090862
Place: New Delhi
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT annexure "b"
The Annexure referred to in our Independent Auditors' Report
of even date to the members of SRM ENERGY LIMITED on the
accounts of the company for the year ended 31st March 2020.
(i) The Company does not have fixed assets. Hence clause 3(i)(a) to3(i)(c) of the order are not applicable to the Company;
(ii) The nature of business of the Company does not require it to haveany inventory. Hence the requirement of clause (ii) of paragraph 3 of the said Order isnot applicable to the Company;
(iii) As informed to us the Company has not granted loans secured orunsecured to companies firms or other parties covered in the register maintained undersection 189 of the Companies Act2013. Hence clauses 3(iii) (a) to (c) of the order arenot applicable to the Company.
(iv) In our opinion and according to the information and explanationsgiven to us the company has compiled with the provisions of section 185 and 186 of theCompanies Act2013 in respect of loans investments guarantees and security.
(v) The Company has not accepted any deposits from the public and hencethe directives issued by the Reserve Bank of India and the provisions of Section 73 to 76or any other relevant provisions of the Act and the Companies(Acceptance of Deposit)Rules2015 with regard to the deposits accepted from the public are not applicable.
(vi) The maintenance of cost records has not been specified by theCentral Government under sub-section (1) of Section 148 of the Act for the Company.
(vii) (a) According to the information and explanations given
to us and based on the records of the company examined by us thecompany is regular in depositing the undisputed statutory dues including Income-taxService Tax and any other statutory dues applicable to it though there has been a slightdelay infew cases. Provident Fund Employees State Insurance Sales Tax Wealth taxCustoms duty Value Added tax are not applicable on the Company. According to theinformation and explanations given to us no undisputed amounts payable in respect of theabove were in arrears as at March 31 2020 for a period of more than six months from thedate on when they become payable;
(b) According to the information and explanations given to us and basedon the records of the Company examined by us the dues outstanding with respect to IncomeTax Wealth Tax Service Tax Sales Tax Customs Duty and Excise Duty or cess asapplicable to it on account of any dispute are as follows:
(viii) According to the records of the company examined by us and asper the information and explanations given to us the company has not taken any loans fromany financial institutions banks or debenture holder and hence the question of defaultingin repayment of dues does not arise.
(ix) According to the records of the company examined by us and as perthe information and explanations given to us the company has not raised moneys by way ofinitial public offer or further public offer including debt instruments and term Loans.Accordingly the provisions of clause 3 (ix) of the Order are not applicable to theCompany and hence not commented upon.
(x) According to the records of the company examined by us and as perthe information and explanations given to us we report that no fraud by the Company or onthe company by its officers or employees has been noticed or reported during the year.
(xi) In our opinion the Company has not paid any managerialremuneration. Therefore the provisions of clause 4 (xi) of the Order are not applicableto the Company.
(xii) In our opinion the Company is not a Nidhi Company. Thereforethe provisions of clause 4 (xii) of the Order are not applicable to the Company.
(xiii) According to the records of company examined by us andinformation and explanation given to us no transaction with the related party as persection 177 and section 188 of the Companies Act 2013 had taken place during thefinancial year 2019-20. The details about the related party transactions as disclosed inFinancial Statements as required by the applicable Accounting Standards.
(xiv) According to the records of the company examined by us and as perthe information and explanations given to us the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review. Accordingly the provisions of clause 3 (xiv) of the Order are notapplicable to the Company and hence not commented upon.
(xv) According to the records of the company examined by us and as perthe information and explanations given to us the company has not entered into anynon-cash transactions with directors or persons connected with him. Accordingly theprovisions of clause 3 (xv) of the Order are not applicable to the Company and hence notcommented upon.
(xvi) In our opinion the company is not required to be registeredunder section 45 IA of the Reserve Bank of India Act 1934 and accordingly the provisionsof clause 3 (xvi) of the Order are not applicable to the Company and hence not commentedupon.
For VATSS & Associates
Place: New Delhi