TO THE MEMBERS OF BAJAJ ELECTRICALS LIMITED
REPORT ON THE STANDALONE INDIAN ACCOUNTING STANDARDS (IND AS) FINANCIAL STATEMENTS
1. We have audited the accompanying standalone financial statements of BajajElectricals Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2017 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 a summary of the significant accounting policies and other explanatory information.
MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE IND AS FINANCIAL STATEMENTS
2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements to give a true and fair view of the financialposition financial performance (including other comprehensive income) cash flows andchanges in equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards specified in the Companies(Indian Accounting Standards) Rules 2015 (as amended) under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
3. Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.
4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the accounting and auditing standards and matters which are required to beincluded in the audit report under the provisions of the Act and the Rules madethereunder.
5. We conducted our audit of the standalone Ind AS financial statements in accordancewith the Standards on Auditing specified under Section 143(10) of the Act and otherapplicable authoritative pronouncements issued by the Institute of Chartered Accountantsof India. Those Standards and pronouncements require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe standalone Ind AS financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditors' 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.
7. 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.
8. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India
of the state of affairs of the Company as at March 31 2017 and its totalcomprehensive income (comprising of profit and other comprehensive income) its cash flowsand the changes in equity for the year ended on that date.
9. The financial information of the Company for the year ended March 312016 and thetransition date opening balance sheet as at April 1 2015 included in these standalone IndAS financial statements are based on the previously issued statutory financial statementsfor the years ended March 31 2016 and March 31 2015 prepared in accordance with theCompanies (Accounting Standards) Rules 2006 (as amended) which were audited by us onwhich we expressed an unmodified opinion dated May 30 2016 and May 28 2015 respectively.
Our opinion is not qualified in respect of these matters.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
10. As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of sub-section (11) of Section 143 of the Act ("theOrder") and on the basis of such checks of the books and records of the Company aswe considered appropriate and according to the information and explanations given to uswe give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 ofthe Order.
11. 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 standalone Ind AS financial statements comply withthe Indian
Accounting Standards specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 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 A.
(g) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us:
i The Company has disclosed the impact if any of pending litigations as at March 312017 on its financial position in its standalone Ind AS financial statements;
ii. The Company has made provision as at March 31 2017 as required under theapplicable law or accounting standards for material foreseeable losses if any onlongterm. The Company did not have any longterm derivative contracts as at March 31 2017;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March312017;
iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016 which are as per the books of accounts maintained by theCompany. The said disclosures as stated in notes to the financial statements includeamounts aggregating ' 55000/- which have been utilised for other than permittedtransactions and amounts received aggregating
' 91500/- from transactions which were not permitted. However we are unable to obtainsufficient and appropriate audit evidence to report on whether the disclosures ofdenominations are in accordance with the records maintained by the company which havebeen disclosed only on the basis of information available with the Management (Refer NoteNo. 46).
For Dalai & Shah LLP FRN: 102021W/W100110 Chartered Accountants
| ||Anish P Amin |
|Mumbai ||Partner |
|May 29 2017 ||Membership Number: 40451 |
Annexure A to Independent Auditors' Report
Referred to in paragraph 11(f) of the Independent Auditors' Report of even date to themembers of Bajaj Electricals Limited on the standalone financial statements for the yearended March 312017
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUBSECTION 3 OF SECTION143 OF THE ACT
1. We have audited the internal financial controls over financial reporting of BajajElectricals Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing deemed to be prescribedunder Section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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.
5. 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 systemoverfinancial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable
assurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control over financial reportingincludes those policies and procedures that (1) pertain to the maintenance of recordsthat 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
7. 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.
8. 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 the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
|For Dalai & Shah LLP |
|FRN: 102021W/W100110 |
|Chartered Accountants |
| ||Anish P Amin |
|Mumbai ||Partner |
|May 29 2017 ||Membership Number: 40451 |
Annexure B To Independent Auditors' Report
Referred to in paragraph 10 of the Independent Auditors' Report of even date to themembers of Bajaj Electricals Limited on the standalone financial statements as ofand forthe year ended March 312017
i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation offixed assets.
(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over a period of 3 years which in our opinionis reasonable having regard to the size of the Company and the nature of its assets.Pursuant to the programme a portion of the fixed assets have been physically verified bythe Management during the year and no material discrepancies have been noticed on suchverification.
(c) The title deeds of immovable properties as disclosed in Note 2 on fixed assets tothe financial statements are held in the name of the Company.
H. The physical verification of inventory excluding stocks with third parties have beenconducted at reasonable intervals by the Management during the year. The discrepanciesnoticed on physical verification of inventory as compared to book records were notmaterial and have been appropriately dealt with in the books of accounts.
Hi. The Company has granted unsecured loans to 2 companies covered in the registermaintained under Section 189 of the Act.
(a) In respect of the aforesaid loans the terms and conditions under which such loanswere granted are not prima facie prejudicial to the Company's interest.
(b) In respect of the aforesaid loans the parties are regular in paying interest.
In respect of the one of such aforesaid loans no schedule for repayment of principalhas been stipulated by the Company. Therefore in absence of stipulation of repaymentterms we do not make any comment on the regularity of repayment of principal.
In respect of the other loan the schedule of repayment of principal and payment ofinterest has been stipulated by the Company. An amount aggregating ' 28000000 isoutstanding towards principal as on March 312017.
(c) In respect of the aforesaid loan the total amount overdue for more than ninetydays as at March 31 2017 is ' 28000000. In such instances in our opinion reasonablesteps have been taken by the Company for the recovery of the principal amount. No interestis overdue with respect to the aforesaid loan.
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofthe loans and investments made and guarantees provided by it. There is no securityprovided by the Company to parties covered under Sections 185 & 186.
v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.
vi. Pursuant to the rules made by the Central Government of India the Company isrequired to maintain cost records as specified under Section 148(1) of the Act in respectof its products. We have broadly reviewed the same and are of the opinion that primafacie the prescribed accounts and records have been made and maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate or complete.
vii. (a) According to the information and explanations
given to us and the records of the Company examined by us in our opinion except fordues in respect of service tax and sales tax the Company is generally regular indepositing undisputed statutory dues including provident fund employees' stateinsurance income tax duty of customs duty of excise value added tax and othermaterial statutory dues as applicable with the appropriate authorities though there hasbeen a slight delay in a few cases. The extent of the arrears of statutory duesoutstanding as at March 31 2017 for a period of more than six months from the date theybecame payable are as follows:
|Name of the statute ||Nature of dues ||Amount (?) ||Period to which the amount relates ||Due date ||Date of Payment |
|The Central Sales Tax Act ||Sales Tax ||311403 ||April 2016 ||May 212016 ||April 292017 |
(b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of income tax sales tax service taxduty of customs and duty of excise value added tax as at March 312017 which have notbeen deposited on account ofa dispute are as follows:
(Rs in Lakh)
|Name of the statute || |
Nature of dues
Amount as at March 31 2017
Period to which the amount relates
Forum where the dispute is pending
|The Central Sales Tax Act and Local Sales Tax Acts || |
Sales Tax including interest and penalty if applicable
Dy. Commissioner / Commissioner / Jt. Commissioner Appeals
|Income Tax Act 1961 || |
|The Central Excise Act 1944 || |
|Dy. Commissioner / Commissioner /Jt. Commissioner Appeals |
| || || |
viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or bank or Government or dues to debenture holders as at thebalance sheet date.
ix. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 3(ix) of the Order are not applicable to the Company.
x. During 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 we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.
xi. The Company has paid/provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.
xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under AccountingStandard (AS) 18 Related Party Disclosures specified under Section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014.
xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non cash transactions with its directors orpersons connected with them. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.
xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.
|For Dalai & Shah LLP |
|FRN: 102021W/W100110 |
|Chartered Accountants |
| ||Anish PAmin |
|Mumbai ||Partner |
|May 29 2017 ||Membership Number: 40451 |