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Bharat Heavy Electricals Ltd.

BSE: 500103 Sector: Engineering
NSE: BHEL ISIN Code: INE257A01026
BSE LIVE 15:59 | 09 Dec 129.10 0.10
(0.08%)
OPEN

129.30

HIGH

130.45

LOW

128.70

NSE LIVE 15:51 | 09 Dec 129.05 0.35
(0.27%)
OPEN

129.65

HIGH

130.45

LOW

128.50

OPEN 129.30
PREVIOUS CLOSE 129.00
VOLUME 461833
52-Week high 175.00
52-Week low 90.40
P/E
Mkt Cap.(Rs cr) 31598.52
Buy Price 0.00
Buy Qty 0.00
Sell Price 128.95
Sell Qty 100.00
OPEN 129.30
CLOSE 129.00
VOLUME 461833
52-Week high 175.00
52-Week low 90.40
P/E
Mkt Cap.(Rs cr) 31598.52
Buy Price 0.00
Buy Qty 0.00
Sell Price 128.95
Sell Qty 100.00

Bharat Heavy Electricals Ltd. (BHEL) - Auditors Report

Company auditors report

To the Members of

Bharat Heavy Electricals Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Bharat Heavy ElectricalsLimited ("the Company") which comprise the Balance Sheet as at March 312016 and the Statement of Profit and Loss and Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory informationin which are incorporated the returns for the year ended on that date audited by us for 16branches and 18 branches audited by the branch auditors of the company.

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 financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding 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 statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased 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 in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall presentation of the financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:

(a) In the case of the Balance Sheet of the state of affairs of the company as atMarch 31 2016; (b) In the case of the Statement of Profit and Loss of the Loss for theyear ended on that date; and (c) In the case of the Cash Flow Statement of the cash flowsfor the year ended on that date.

Other Matter

We did not audit the financial statements/information of 18 ( Eighteen) branchesincluded in the standalone financial statements of the Company whose financialstatements/financial information reflect total assets of Rs 37337.65 crores as at 31stMarch 2016 and total revenue of Rs 13006.97 crores for the year ended on that date asconsidered in the standalone financial statements. The financial statements/information ofthese branches have been audited by the branch auditors whose reports have been furnishedto us and our opinion in so far as it relates to the amounts and disclosures included inrespect of these branches is based solely on the report of such branch auditors.

Our opinion is not modified in respect of this matter.

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 termsof sub-section (11) of section 143 of the Act we give in the "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.

(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 properlydealt with by us in preparing this report.

(d) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account and with the returnsreceived from the branches not visited by us.

(e) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. (f) Being a Government Company Section 164(2) of theCompanies Act 2013 regarding ‘whether any director is disqualified from beingappointed as a director’ is not applicable 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 financialcontrols over financial reporting of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "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. The Company has disclosed the impact of pending litigations on its financial positionin its financial statements – Refer Note 31 (5) to the financial statements.

ii. T he Company has made as required under the applicable law and accountingstandards for material foreseeable losses if any on long-term contracts – ReferNote 31 (11) to the financial statements. iii. There has been no delay in transferringamounts required to be transferred to the Investor Education and Protection Fund by theCompany.

(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 SBA & Company
Chartered Accountants Chartered Accountants Chartered Accountants
FRN 002263N FRN 006791N FRN 004651C
(CA Y K Gupta) (CA Sanjay Jain) (CA Vikas Jain)
Partner Partner Partner
M.No.016020 M.No. 084906 M.No. 078245
Place : New Delhi
Date : May 27 2016

"Annexure A" to 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 2016) 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 fixed assets over a period of three years which in ouropinion is reasonable having regard to the size of the Company and nature of its businessand no material discrepancies were noticed on such verification to the extent verificationwas made during the year.

(c) The details of title deeds of immovable properties not held in the name of thecompany are given in note

31(2)(a) (i to iii) to the Financial Statements. ii) As explained to us physicalverification of inventory has been conducted by the management under

Perpetual Inventory Programme at regular intervals during the year except for stock ofwork in progress and finished goods in few units where these are verified at the year endwith reference to the inspection reports and production reports of the Production PlanningDepartment of such units. In regard to stocks lying with contractors/fabricators and otherparties confirmations were received in few cases only. In our opinion the frequency ofverification is reasonable. iii) According to the information given to us the Company hasnot granted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Therefore clauses (iii) (a) (iii) (b) and (iii)(c) of Paragraph 3 ofthe Order are not applicable to the Company. iv) The Company has complied with theprovisions of the section 185 and 186 of the Companies Act 2013 in respect of loansinvestments guarantees and security. v) According to the information and explanationsgiven to us the Company has not accepted any deposits from public during the year withinthe meaning of sections 73 to 76 or any other relevant provisions of the Companies Act2013 and the Companies (Acceptance of Deposits) Rules 2014. vi) We have broadly reviewedthe books of account and records maintained by the Company pursuant to the

Companies (Cost Records and Audit) Rules 2014 prescribed by the Central Governmentunder section 148(1) of the Companies Act 2013 and are of the opinion that prima faciethe prescribed accounts and records have been made and maintained. We have however notmade a detailed examination of the cost records with a view to determine whether they areaccurate and complete. vii) (a) According to the information and explanations given to usin our opinion the Company is generally regular in depositing with appropriateauthorities undisputed statutory dues including Provident Fund Employees’ StateInsurance 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 the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees State Insurance Income Tax Sales TaxService Tax duty of Customs duty of Excise Value Added Tax Cess and any otherstatutory dues were outstanding as at March 31 2016 for a period of more than six monthsfrom 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 Tax which have not beendeposited on account of dispute are as under: (Rs 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 Value Added Tax and Sales Tax Act of various States Sales Tax VAT 30.97 3.81 Assessing Officer
398.59 58.31 Dy. Commissioner/
Jt. Commissioner/
Commissioner (Appeals)
378.08 133.27 Appellate Tribunal
43.47 22.33 High Court
2.87 2.83 Supreme Court
399.34 26.05 Various Appellate
Authorities
2 Income Tax Act 1961 Income Tax 0.81 - Assessing Officer
0.05 - Commissioner (Appeals)
0.10 - High Court
3 Central Excise Act 1944 Excise Duty 41.84 4.37 Commissioner (Appeals)
369.86 13.69 Appellate Tribunal
55.70 4.96 High Court
0.55 0.55 Supreme Court
- - Various Appellate
Authorities
4 Service Tax under the Finance Service Tax 1.56 0.74 Commissioner (Appeals)
Act 1994
468.51 6.54 Appellate Tribunal
15.10 - High Court
0.77 0.06 Various Appellate
Authorities
5 Customs Act1962 Custom duty 0.10 - Assessing Officer

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 orborrowings to financial institutions banks government. The company has not issued anydebentures. ix) Provisions of clause no. (ix) relating to utilization of moneys raised byway of initial public offer or further public offer including debt instruments and termloans is not applicable to the Company as no such moneys raised during the year.

x) D uring the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us no fraud by the Company or anyfraud on the Company by its officers or employees has been noticed or reported during theyear. xi) Being a Government Company provision of clause no. (xi) regarding section 197of the Companies Act 2013 relating to managerial remuneration is not applicable to theCompany in view of Notification no. G.S.R. 463(E) dtd. 05-06-2015. xii) Provisions ofclause no. (xii) regarding Nidhi Company is not applicable to the Company; xiii) Accordingto the records of the Company examined by us and the information and explanations given tous the related party transactions are in compliance with section 177 and 188 of theCompanies Act 2013 and have been disclosed in the Financial Statements. xiv) Provision ofclause no. (xiv) reg. preferential allotment or private placement of shares or fully orpartly convertible debentures during the year is not applicable to the Company as no suchpreferential allotment or private placement took place during the year. xv) The companyhas not entered into any non-cash transactions with directors or persons connected withhim. xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India. Act 1934.

For Wahi & Gupta For DSP & Associates For SBA & Company
Chartered Accountants Chartered Accountants Chartered Accountants
FRN 002263N FRN 006791N FRN 004651C
(CA Y K Gupta) (CA Sanjay Jain) (CA Vikas Jain)
Partner Partner Partner
M.No.016020 M.No. 084906 M.No. 078245
Place : New Delhi
Date : May 27 2016

"Annexure B" to the Independent Auditor’s Report of even date on theStandalone Financial Statements 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 2016 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding 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 r esponsibility 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 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A c ompany'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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 March 31 2016 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 Wahi & Gupta For DSP & Associates For SBA & Company
Chartered Accountants Chartered Accountants Chartered Accountants
FRN 002263N FRN 006791N FRN 004651C
(CA Y K Gupta) (CA Sanjay Jain) (CA Vikas Jain)
Partner Partner Partner
M.No.016020 M.No. 084906 M.No. 078245
Place : New Delhi
Date : May 27 2016

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