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Best & Crompton Engineering Ltd.

BSE: 500046 Sector: Engineering
NSE: BECREL ISIN Code: INE287A01015
BSE LIVE 10:30 | 22 Jun Stock Is Not Traded.
NSE LIVE 00:00 | 28 Nov Stock Is Not Traded.
OPEN 3.43
PREVIOUS CLOSE 3.61
VOLUME 8800
52-Week high 3.43
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 42.48
Buy Price 0.00
Buy Qty 0.00
Sell Price 3.43
Sell Qty 13700.00
OPEN 3.43
CLOSE 3.61
VOLUME 8800
52-Week high 3.43
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 42.48
Buy Price 0.00
Buy Qty 0.00
Sell Price 3.43
Sell Qty 13700.00

Best & Crompton Engineering Ltd. (BECREL) - Auditors Report

Company auditors report

INDEPENDENT AUDITOR

To the Members of Best & Crompton Engg. Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Best & CromptonEngg. Limited ("the Company") which comprise the Balance sheet as at31st March 2013 the Statement of Profit and Loss and the Cash Flow Statementfor the year then ended and a summary of significant accounting policies and otherexplanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give atrue and fair view of the financial position financial performance and cash flows of thecompany in accordance with the Accounting Standards referred to in sub-section (30 ofsection 211 of the Companies Act 1956 read with the General Circular 15/2013 dated 13September 2013 of the Ministry of Corporate Affairs in respect of Section 133 of theCompanies Act 2013. This responsibility includes the design implementation andmaintenance of internal control relevant to the preparation and presentation of thefinancial 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 financial statements based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theInstitute of Chartered Accountants of India. Those standards require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgement including the assessment of the risks of material misstatementsof the financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal control relevant to the Company's preparationand fair presentation of the financial statements in order to design audit procedures thatare appropriate in the circumstances but not for the purpose of expressing an opinion onthe effectiveness of the entity's internal control. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by management as well as evaluating the overall presentation of financialstatements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view subject to 2 below and inconformity with the accounting principles generally accepted in India:

1. Attention is called to the following without qualifying

The Company has received inward remittances in respect of export of goods which are yetto be made through authorized dealers which is more clearly reflected in Note 43.

2. a) The company’s ability to continue as a going concern under SA 570 has beenassessed. In our opinion unless the company comes up with concrete plans to tie upShareholders' equity/ Long term debt it will have difficulty to continue to operate as agoing concern.

b) The company has not complied with the following Accounting Standards -

• AS - 13 (Accounting for Investments). The majority of the Company's assets areits investment in Subsidiaries whose financial results have been adversely commented uponby their respective auditors. We are unable to state that the diminutions in theseinvestments are long term in nature. Any long term diminution in the value of theseinvestments will significantly erode the net worth of Best & Crompton Engg. Limited.

• With regard to AS - 28 (Impairment of Assets) the recoverability of most of thedebts exceeding 6 months should have been classified as doubtful.

c) The company has obtained secured loan from Institutions amounting to Rs. 57.45crores and the repayment of principal and interest is outstanding as on date.

d) There has been a very significant delay in remitting PF ESI TDS and Employeerelated dues and other statutory obligations as at the balance sheet date. Tax deducted atsource obligation of Rs. 40.52 lakhs is pending. Since remitted.

e) The effect of items (a) and (b) above are not quantifiable owing to uncertainty inestimation of recoverable value of investments and current assets. Hence this cumulativeeffect on the Statement of Profit & Loss reserves and net worth is not ascertainable.

(a) in the case of the Balance Sheet of the state of affairs of the Company as atMarch 31 2013;

(b) in the case of the Statement of Profit and Loss of the LOSS for the year ended onthat date; and

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2003 ("theOrder") issued by the Central Government of India in terms of subsection (4A) ofsection 227 of the Act we give in the Annexure a statement on the matters specified inparagraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act we report that:

a. we have obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purpose of our audit;

b. in our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

c. the Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;

d. in our opinion the Balance Sheet Statement of Profit and Loss and Cash FlowStatement comply with the Accounting Standards referred to in sub section (30 of section211 of the Companies Act 1956 subject to note 2 above and

e. on the basis of written representations received from the directors as on March 312013 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2013 from being appointed as a director in terms of clause (g) ofsub-section (1) of section 274 of the Companies Act 1956 read with the General Circular15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of Section133 of the Companies Act 2013.

f. Since the Central Government has not issued any notification as to the rate at whichthe cess is to be paid under section 441A of the Companies Act 1956 nor has it issued anyRules under the said section prescribing the manner in which such cess is to be paid nocess is due and payable by the Company.

For CNGSN & ASSOCIATES
Chartered Accountants
F.R.No.004915S
C N GANGADARAN
Place : Chennai Partner
Dated: October 9 2014 Memb. No. 11205

Annexure to the Auditors’ Report

1. (a) The Company has maintained proper records showingfull particulars includingquantitative details and situation of fixed assets. The fixed assets have been physicallyverified during the year by the management.

(b) During the year the Company has not disposed off substantial part of the fixedassets.

2. (a) Inventories have been physically verified during the year by the Management.

(b) In our opinion the procedure of physical verification of inventory followed by themanagement is reasonable and adequate in relation to the size of the Company and thenature of its business.

(c) The Company has maintained proper records of inventories. The discrepancies noticedon verification between physical stocks and book records were not material.

3. The Company has certified that no transaction need to be entered in the Registermaintained under Section 301 of the Companies Act 1956. Hence the question of loans givenor received from such parties does not arise.

4. In our opinion and according to the information and explanations given to us thereare adequate internal control systems commensurate with the size of the Company and thenature of its business with regard to the purchase of stores raw materials includingcomponents plant and machinery equipment and other assets and with regard to the sale ofgoods and services.

5. (a) In our opinion and according to the information and explanations and based oncertifications given to us we are of the opinion that there are no transactions that needto be entered into the register maintained under Section 301 of the Companies Act 1956.

(b) No transactions have been entered at a price exceeding the value of Rs. 500000/-in respect of any one party.

6. The company has not accepted any fixed deposits from the public during the year andthere are no outstanding fixed deposits.

7. In our opinion the internal audit functions carried out during the year by anexternal agency appointed by the Management have been commensurate with the size of theCompany and the nature of its business.

8. We have been informed that Cost Audit is applicable to 2 units in the Pumps Divisionof the Company. The Cost audit is in progress.

9. (a) According to the records of the Company Provident fund Employees StateInsurance Tax deducted at source and Service tax dues have been deposited with theappropriate authorities with severe delays in certain months except for TDS amounting toRs. 40.52 lakhs. Since remitted.

(b) The Undisputed income tax liability amounting to Rs 19.80 crores were in arrears ason 31st March 2013 for a period of more than six months from the date they became payable.The amount relates to the period A.Y.2009-10

(c) The disputed statutory dues amounting to Rs. 1843.94-lakhs that have not beendeposited on account of matters pending before appropriate authorities are as under.

S. No Particulars Forum Year Amount (lakhs)
1 Excise Duty Commissioner of Excise 1998-99 0.86
2 Sales Tax High Court Tribunal Additional Deputy Commissioner Assistant Commissioner Joint Commissioner Additional Commissioner. 1983-84 to 2003-04 352.92
3 Central Sales Tax Tribunal Additional Deputy Commissioner Assistant Commissioner Joint Commissioner Additional Commissioner. 1987-88 to 2001-02 80.88
4 Income Tax 1409.28
TOTAL 1843.94

10. The Company has accumulated losses as at 31st March 2013. The Company has incurredcash losses in the current financial year and also in the immediately preceding financialyear.

11. The Company has defaulted in repayments to Financial Institutions as follow:

Particulars Principle (Rs.) Interest (Rs.)
ILFS 5070 lakhs 674.56 lakhs

12. According to the information and explanations given to us the company has notgranted any loans and advances on the basis of security by way of pledge of sharesdebentures and other securities.

13. The provisions of any special statute as specified under clause (xiii) of paragraph4 of the Order are not applicable to the Company.

14. According to the information and explanations given to us the Company is notdealing or trading in shares securities debentures and other investments. Accordinglyclause 4(xiv) of Companies (Auditors' Report) Order 2003 is not applicable.

15. The company has given guarantees for Rs.3268050/- thousands on behalf of itssubsidiaries and another company.

16. According to the information and explanations given to us on an overall basis theterm loans have been applied for the purposes for which they were obtained.

17. According to the information and explanation given to us and on overall examinationof the Balance Sheet of the Company we report that funds raised on short-term basis havenot been used for longterm investment.

18. During the year the Company has not made any preferential allotment of shares tothe parties and the companies covered in the register maintained under Section 301 of theCompanies Act 1956. Accordingly clause 4 (xviii) of Companies (Auditors Report) Order2003 is not applicable.

19. On the basis of records and documents examined by us there is no shortfall in thecreation of security.

20. The Company has not raised any money through public issue during the year.

21. According to the information and explanations given to us no fraud on or by theCompany has been noticed or reported during the year.

For CNGSN & ASSOCIATES
Chartered Accountants
F.R.NO.004915S
C N GANGADARAN
Place : Chennai Partner
Dated: October 9 2014 Memb. No. 11205

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