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Bharat Heavy Electricals Ltd.

BSE: 500103 Sector: Engineering
NSE: BHEL ISIN Code: INE257A01026
BSE LIVE 13:17 | 13 Dec 91.70 0.10
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91.10

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NSE 13:02 | 13 Dec 91.75 0.05
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91.20

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92.15

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OPEN 91.10
PREVIOUS CLOSE 91.60
VOLUME 311769
52-Week high 121.77
52-Week low 77.43
P/E 66.45
Mkt Cap.(Rs cr) 33,667
Buy Price 91.70
Buy Qty 1767.00
Sell Price 91.80
Sell Qty 3488.00
OPEN 91.10
CLOSE 91.60
VOLUME 311769
52-Week high 121.77
52-Week low 77.43
P/E 66.45
Mkt Cap.(Rs cr) 33,667
Buy Price 91.70
Buy Qty 1767.00
Sell Price 91.80
Sell Qty 3488.00

Bharat Heavy Electricals Ltd. (BHEL) - Auditors Report

Company auditors report

To the Members of

Bharat Heavy Electricals Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind As financial statements ofBharatHeavy Electricals Limited

(“the Company”) which comprise the Balance Sheet as at March 31 2017 andthe Statement of Profit and Loss

(including Other Comprehensive Income) the Cash Flow Statement and the Statement ofChanges in Equity for the year then ended and a summary of significant accountingpolicies and other explanatory information in which are incorporated the returns for theyear ended on that date audited by us for 16 branches and 17 branches audited by thebranch auditors of the company.

Managements 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 of these standalone Ind ASfinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income cash flows and changes in equity of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards (Ind AS) prescribed under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on 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 standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

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 including the Ind AS: (a) Inthe case of the Balance Sheet of the state of affairs

(financial position) of the company as at March 31 2017;

(b) In the case of the Statement of Profit and Loss of the profit (financialperformance including comprehensive income) for the year ended on that date; and

(c) In the case of the Cash Flow Statement of the cash flows for the year ended onthat date.

(d) In the case of Statement of changes in Equity of the change in equity for the yearended on that date.

Other Matters

The comparative financial information of the company for the year ended 31st March 2016and the transition date opening balance sheet as at 1st April 2015 included in thesestandalone Ind AS financial statements are based on the previously issued statutoryfinancial prepared in accordance with the Companies (Accounting Standards) Rules 2006audited by the predecessor auditors/by us and their report for the year ended 31st March2016 and 31st March 2015 dated 27th May 2016 and 26th May 2015 respectively expressed anunmodified opinion on those standalone financial statements as adjusted for thedifferences in the accounting principles adopted by the Company on transition to the IndAS which have been audited by us.

We did not audit the financial statements/information of

17 (seventeen) branches included in the standalone Ind

AS financial statements of the Company whose financial statements / financialinformation reflect total assets of

H 41762.31 Crore as at 31st March 2017 and total revenue of H 19188.82Crore for the year ended on that date as considered in the standalone Ind AS financialstatements. The financial statements/information of these branches have been audited bythe branch auditors whose reports have been furnished to us and our opinion in so far asit relates to the amounts and disclosures included in respect of these branches is basedsolely on the report of such branch auditors.

Our opinion is not modified in respect of these matters.

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 of the Act we give inthe “Annexure A” a statement on the matters specified in paragraphs 3 and 4 ofthe Order to the extent applicable.

(2) As required by Section 143 (3) of the Act we report that: (a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief 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 and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus;

(c) The reports on the accounts of the branch offices of the Company audited underSection

143(8) of the Act by branch auditors have been sent to us and have been properly dealtwith by us in preparing this report.

(d) The Balance Sheet the Statement of Profit and

Loss including other comprehensive income the Cash Flow Statement and Statement ofChanges in Equity dealt with by this Report are in agreement with the books of account andwith the returns received from the branches not visited by us.

(e) In our opinion the aforesaid standalone Ind

AS financial statements comply with the

Indian Accounting Standards prescribed under Section 133 of the Act read with Rule 7of the Companies (Accounts) Rules 2014.

(f) Being a Government Company Section 164(2) of the Companies Act 2013 regarding‘whether any director is disqualified from being appointed as a director' is notapplicable to the Company in view of Notification no. G.S.R. 463(E) dtd. 05-

06-2015.

(g) With respect to the adequacy of the internal financial controls over financialreporting of the

Company and the operating effectiveness of such controls refer to our separate Reportin

“Annexure B”.

(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. TheCompany has disclosed the impact of pending litigations on its financial position in itsInd AS financial statements Refer Note 39 (2) to the financial statements. ii. The Companyhas made provision as required under the applicable law or accounting standards formaterial foreseeable losses if any on long-term contracts Refer Note 39 (17) to thefinancial statements. iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection

Fund by the Company. iv. The Company has provided requisite disclosures in thefinancial statements as to holdings as well as dealings in specified Bank Notes during theperiod from 8th November 2016 to 30th December 2016. based on audit procedures andrelying on the management representation we report that the disclosures are in accordancewith books of account maintained by the company and as produced by the management ReferNote 39 (19) to the Ind AS financial statements.

(3) As required by section 143(5) of the Act we have considered the directions issuedby the Comptroller and Auditor General of India the action taken thereon and its impacton the accounts and financial statements of the company –Refer Annexure C attached.

For Wahi & Gupta For DSP & Associates For S B A & Company
Chartered Accountants Chartered Accountants Chartered Accountants
FRN-002263N FRN-006791N FRN-004651C
(CA Y.K. Gupta) (CA Sanjay Jain) (CA. Sita Ram Soni)
Partner Partner Partner
M.No. 016020 M.No. 084906 M.No. 072381
Place: New Delhi
Date: May 29 2017

Annexure–A

To the Independent Auditors' Report

(Referred to in Paragraph 1 under the heading “Report on Other Legal andRegulatory Requirements” of our report of even date on the accounts of Bharat HeavyElectricals Limited (“the Company”) for the year ended March 31 2017) i)(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.

(b) According to the information and explanations given to us physical verification offixed assets is being conducted in a phased manner by the management under a programmedesigned to cover all the property plant and equipment including intangible assets over aperiod of three years which in our opinion is reasonable having regard to the size ofthe Company and nature of its business and no material discrepancies were noticed on suchverification to the extent verification was made during the year.

(c) The details of title deeds of immovable properties not held in the name of thecompany are given in note no. 2 (a to f) to the Ind AS Financial Statements. ii) Asexplained to us physical verification of inventory has been conducted by the managementunder Perpetual Inventory Programme at regular intervals during the year except for stockof work in progress and finished goods in few units where these are verified at the yearend with reference to the inspection reports and production reports of the ProductionPlanning Department of such units. In regard to stocks lying with contractors/fabricatorsand other parties confirmations were received in few cases only. In our opinion thefrequency of verification is reasonable. iii) According to the information given to usthe Company has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013. Therefore clauses (iii) (a) (iii) (b) and (iii)(c) ofParagraph 3 of the Order are not applicable to the

Company. iv) The Company has complied with the provisions of the section 185 and 186 ofthe Companies Act 2013 in respect of loans investments guarantees and security. v)According to the information and explanations given to us the Company has not acceptedany deposits from public during the year within the meaning of sections 73 to 76 or anyother relevant provisions of the Companies Act 2013 and the Companies (Acceptance ofDeposits) Rules 2014. vi) We have broadly reviewed the books of account and recordsmaintained by the Company pursuant to the Companies (Cost Records and Audit) Rules 2014prescribed by the Central Government under section 148(1) of the Companies Act 2013 andare of the opinion that prima facie the prescribed accounts and records have been made andmaintained. We have however not made a detailed examination of the cost records with aview to determine whether they are accurate and complete. vii) (a) According to theinformation and explanations given to us in our opinion the Company is generally regularin depositing with appropriate authorities undisputed statutory dues including ProvidentFund Employees' State

Insurance Income Tax Sales Tax Service Tax duty of Customs duty of Excise ValueAdded Tax Cess and any other statutory dues as applicable to it . (b) According to theinformation and explanations given to us no undisputed amounts payable in respect of

Provident Fund Employees State Insurance Income Tax Sales Tax Service Tax duty ofCustoms duty of

Excise Value Added Tax Cess and any other statutory dues were outstanding as at March31 2017 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us the particulars ofIncome Tax Sales Tax Service Tax duty of Customs duty of Excise and Value Added Taxwhich have not been deposited on account of dispute are as under:

(` in Crore)

Name of the Statute Nature of the Dues

Pending Amount Amount paid under protest

Forum where dispute is pending
1 Central Sales Tax Act Sales Tax VAT 18.49 6.12 Assessing Officer
Value Added Tax and 441.18 65.90 Dy. Commissioner /
Sales Tax Act of various Jt. Commissioner /
States Commissioner (Appeals)
416.67 167.81 Appellate Tribunal
380.5 19.87 High Court
2.87 2.83 Supreme Court
603.04 37.5 Various Appellate
Authorities
2 Income Tax Act 1961 Income Tax 0.22 - Assessing Officer
0.05 - Commissioner(Appeals)
12.46 - High Court
3 Central Excise Act 1944 Excise Duty 80.91 7.93 Commissioner (Appeals)
309.24 10.55 Appellate Tribunal
29.35 5.14 High Court
0.55 0.55 Supreme Court
62.87 - Various Appellate
Authorities
4 Service Tax under the Service Tax 111.62 3.80 Commissioner (Appeals)
Finance Act 1994 379.93 3.59 Appellate Tribunal
16.12 - High Court

viii) According to the records of the Company examined by us and the information andexplanations given to us the

Company has not defaulted in repayment of loans or borrowings to financialinstitutions banks or government. The company has not issued any debentures. ix)Provisions of clause no. (ix) relating to utilization of moneys raised by way of initialpublic offer or further public offer including debt instruments and term loans is notapplicable to the Company as no such moneys raised and outstanding during the year. x)During the course of our examination of the books and records of the Company carried outin accordance with the generally accepted auditing practices in India and according tothe information and explanations given to us no fraud by the Company or any fraud on theCompany by its officers or employees has been noticed or reported during the year. xi)Being a Government Company provision of clause no. (xi) regarding section 197 of theCompanies Act 2013 relating to managerial remuneration is not applicable to the Companyin view of Notification no. G.S.R. 463(E) dtd. 05-06-

2015. xii) Provisions of clause no. (xii) regarding Nidhi Company is not applicable tothe Company; xiii) According to the records of the Company examined by us and theinformation and explanations given to us the related party transactions are in compliancewith section 177 and 188 of the Companies Act 2013 and have been disclosed in the Ind ASFinancial Statements. xiv) Provision of clause no. (xiv) regarding preferential allotmentor private placement of shares or fully or partly convertible debentures during the yearis not applicable to the Company as no such preferential allotment or private placementtook place during the year. xv) The company has not entered into any non-cash transactionswith directors or persons connected with him. xvi) The Company is not required to beregistered under section 45-IA of the Reserve Bank of India. Act 1934.

For Wahi & Gupta For DSP & Associates For S B A & Company
Chartered Accountants Chartered Accountants Chartered Accountants
FRN-002263N FRN-006791N FRN-004651C
(CA Y.K. Gupta) (CA Sanjay Jain) (CA. Sita Ram Soni)
Partner Partner Partner
M.No. 016020 M.No. 084906 M.No. 072381
Place: New Delhi
Date: May 29 2017

Annexure–B

To the Independent Auditor's Report of Even Date on the Standalone Ind AS FinancialStatements of Bharat Heavy Electricals Limited

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 M/s BharatHeavy Electricals Limited (“the Company”) as of March 31 2017 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended 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 Reporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies

Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the

Company's internal financial controls over financial reporting based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal

Financial Controls Over Financial Reporting (the “Guidance

Note”) and the Standards on Auditing issued by ICAI and deemed to be prescribedunder section 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls both applicable to an audit of

Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. 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 judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the 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 that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and (3) providereasonable assurance regarding prevention or timely detection of unauthorised acquisitionuse or disposition of the company's assets that could have a material effect on thefinancial 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 to futureperiods are subject to the risk that the internal financial control over financialreporting may become inadequate because of changes in conditions or that the degree ofcompliance 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 March 31 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in thereporting Guidance Note on Auditof Internal Financial Controls Over

Financial Reporting issued by the Institute of Chartered Accountants of India.

For Wahi & Gupta For DSP & Associates For S B A & Company

Chartered Accountants Chartered Accountants Chartered Accountants

FRN-002263N FRN-006791N FRN-004651C

(CA Y.K. Gupta) (CA Sanjay Jain) (CA. Sita Ram Soni)

Partner Partner Partner

M.No. 016020 M.No. 084906 M.No. 072381

Place: New Delhi

Date: May 29 2017

Annexure C

to the Independent Auditor's Report

Directions indicating the areas to be examined by the Statutory Auditors during thecourse of audit of annual accounts of Bharat Heavy Electricals Limited ( Standalone) forthe year 2016-17 issued by the Comptroller & Auditor General of

India under Section 143(5) of the Companies Act 2013

Areas Examined Replies
1 Whether the Company has clear title/lease deeds for freehold and leasehold land respectively? If not please state the area of freehold and leasehold land for which title / lease deeds are not available. a) Clear Title/lease deeds : - No
b) If answer to (a) above is No then :
(i) Freehold area (Acres) : 7721.34
(ii) Leasehold area ( Acres) : 476.66
(Note :In respect of freehold land as above almost in all cases the same is acquired from State Government on right to use basis and is categorized under freehold)
2 Whether there are any cases of waiver/write off of debts/ loans/ interest etc. If yes the reasons thereof and amount involved. Debtors amounting to H 157.55 Crore have been written-off during the FY 2016-17 on account of LD levied & recovered by the customers and due to various disallowance/ recoveries made by customer. These are old cases and necessary approval for write off have been taken from competent authorities.
3 Whether proper records are maintained for inventories lying with third parties and assets received as gift/grant(s) from the Govt. or other authorities. Proper records are being maintained for the inventories lying with third parties & assets received as gift/grant(s) from Govt. or other authorities. However during the year there is no case of assets received as gift/grant(s) from Govt. or other authorities.

 

For Wahi & Gupta For DSP & Associates For S B A & Company
Chartered Accountants Chartered Accountants Chartered Accountants
FRN-002263N FRN-006791N FRN-004651C
(CA Y.K. Gupta) (CA Sanjay Jain) (CA. Sita Ram Soni)
Partner Partner Partner
M.No. 016020 M.No. 084906 M.No. 072381
Place: New Delhi
Date: May 29 2017