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Bhagyanagar India Ltd.

BSE: 512296 Sector: Engineering
NSE: BHAGYNAGAR ISIN Code: INE458B01028
BSE LIVE 15:57 | 09 Mar 24.35 0.35
(1.46%)
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25.10

HIGH

25.10

LOW

23.80

NSE LIVE 15:46 | 09 Mar 24.35 0.40
(1.67%)
OPEN

24.80

HIGH

24.90

LOW

23.75

OPEN 25.10
PREVIOUS CLOSE 24.00
VOLUME 40225
52-Week high 26.75
52-Week low 15.35
P/E 36.89
Mkt Cap.(Rs cr) 155.84
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 25.10
CLOSE 24.00
VOLUME 40225
52-Week high 26.75
52-Week low 15.35
P/E 36.89
Mkt Cap.(Rs cr) 155.84
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bhagyanagar India Ltd. (BHAGYNAGAR) - Auditors Report

Company auditors report

To The Members of Bhagyanagar India Limited

Report on the Financial Statements

We have audited the accompanying financial statements of Bhagyanagar India Limited("the Company") which comprise the Balance Sheet as at 31 March 2016 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters in section 134(5) ofthe Companies Act 2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provision of the Act for safeguarding of the assets of the Company and forpreventing and detecting the frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of internal financial control thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

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 there under.

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 anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the management as well as evaluating the overall presentation of thefinancial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the company as atMarch 312016 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw your attention to Note 2.25 of the financial statements wherein the managementhas disclosed the details of Claims against the company not acknowledged as debt inrespect of matters under dispute with statutory authorities.

Our opinion is not modified in this matter.

Report on other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in "Annexure - A" a statement on mattersspecified in paragraphs 3 and 4 of the Order.

2. 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 and Cash Flow Statement dealtwith by this Report are in agreement with the books of account.

d. In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

e. On the basis of written representations received from the directors as on 31stMarch 2016 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2016 from being appointed as a director in terms of Section164(2) of the Act.

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 B".

g. With respect to the other matters included in the Auditor's Report and in accordancewith Rule 11 of Companies (Audit and Auditors) Rules 2014 and in our opinion and to thebest of our information and explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 2.25 to the financial statementsand also included in the Emphasis of matter paragraph above;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long term contracts includingderivative contracts.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For Sekhar& Co.
Chartered Accountants
FRN: 003695-S
G. Ganesh
Place : Secunderabad Partner
Date : 24-May-2016 M.No.: 211704

Annexure A referred to in paragraph 1 of our report of even date Re: Bhagyanagar IndiaLimited

i. a) The Company has maintained proper records showing full particular includingquantitative details and situation of fixed assets.

b) As explained to us the fixed assets have been physically verified by the managementin a phased manner designed to cover all the fixed assets over the year. In respect offixed assets verified according to this program which we consider reasonable no materialdiscrepancies were noticed on such verification.

c) The title deeds of immovable properties are held in the name of the company.

ii. The inventory except Goods-in-transit has been physically verified by themanagement at reasonable intervals during the year. In our opinion the frequency of suchverification is reasonable. In respect of inventory lying with third parties these havesubstantially been confirmed by them. No material discrepancies were noticed on physicalverification.

iii. The Company has granted unsecured loans to six parties covered inthe register maintained under section 189 of the Act. There are no firms/ LLPs/ otherparties covered in the register maintained under Section 189 of the Act.

a) In respect of the aforesaid loans the terms and conditions under which such loanswere granted are not prejudicial to the company's interest.

b) In respect of the aforesaid loans the schedule of repayment of principle andinterest has not been stipulated. Due to absence of schedule of repayment the regularityof the same could not be commented.

c) In absence of specific schedule of repayment of loans we are of the opinion of nooverdue amounts.

iv. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of loans investments guarantees and security.

v. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.

vi. We have broadly reviewed the cost records maintained by the Company prescribed bythe Central Government of India under Section 148(1) of the Act and are of the opinionthat prima facie the prescribed accounts and records have been maintained. We havehowever not made a detailed examination of the cost records with a view to determinewhether they are accurate or complete.

vii. a) According to information and explanations given to us and on the basis of ourexamination of the books of accounts and records the Company has been generally regularin depositing undisputed statutory dues with appropriate authorities including providentfund employees' state insurance income tax sales tax service tax duty of customsduty of excise value added tax cess and any other statutory dues with the appropriateauthorities. According to the information and explanations given to us no undisputedamounts payable in respect of the above were in arrears as at March 312016 for a periodof more than six months from the date on when they become payable.

a) According to the information and explanations given to us there are no dues ofincome tax sales tax service tax duty of customs duty of excise value added taxoutstanding on account of any dispute.

b) Details of dues of Duty of Excise Duty of Customs and Income Tax which have notbeen deposited as on 31st March 2016 on account of disputes are given below:

Name of Statute Nature of Dues Amount not paid/ (Amount involved in dispute) Period to which it relates Forum where dispute is pending
1 Central Excise Act 1944 Excise Duty 2569007 2008-09 Appellate Additional
(2569007) Commissioner - Hyd
NIL Various Years
(2000000)
2 Customs Act 1964 Custom Duty NIL 2008-09 Supreme Court of
(18040837) India
3 Income Tax Act 1961 Income Tax NIL 2012-13 CIT Appeals
(10536490)

Figures in brackets are the amounts involved in dispute. The taxes paid against theabove disputes at '20060932 are shown under heads Taxes paid under protest are includedin Long Term Advances and Income Tax Receivable under other current assets.

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks. The Company has not taken anyloan either from financial institutions or from the government and has not issued anydebentures.

ix. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not raised moneys by way of initial public offeror further public offer including debt instruments and term loans. Accordingly theprovisions of clause 3 (ix) of the Order are not applicable to the Company and hence notcommented upon.

x. Based upon the audit procedures performed and the information and explanations givenby the management we report that no fraud by the company or on the company by itsofficers or employees has been noticed or reported during the year.

xi. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act.

xii. In our opinion the Company is not a Nidhi company. Therefore the provisions ofclause 4 (xii) of the Order are not applicable to the Company.

xiii. In our opinion all transactions with the related parties are in compliance withSection 177 and 188 of Companies Act 2013 and the details have been disclosed in theFinancial Statements as required by the applicable accounting standards.

xiv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe company and hence not commented upon.

xv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the company and hence not commented upon.

xvi. In our opinion the company is not required to be registered under Section 45 IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi)of the Order are not applicable to the company and hence not commented upon.

For Sekhar& Co.
Chartered Accountants
FRN: 003695-S
G.Ganesh
Place : Secunderabad Partner
Date : 24-May-2016 M.No.:211704

Annexure B to the Auditor's Report:

Report on the Internal Financial Controls under the Clause (i) of sub section 3 ofSection 143 of the Companies Act 2013(‘the Act)

We have audited the internal financial controls financial reporting of BhagyanagarIndia Limited ("the Company") as of 31 March 2016 in conjunction with our auditof the standalone financial statements of the Company for the year ended on that date.

Management's responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls base 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'). 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 the Company's policies the safeguardingof its assets the prevention and detention 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("the Act").

Auditors' Responsibility:

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 issued by ICAI and deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. 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 about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of the internal financial controls over the financial reportingincluded obtaining an understanding of the 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 assessed risk. Theprocedures selected depend on the auditors' judgment including the assessment of therisks of material misstatements of the financial statements whether due to fraud orerror.

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 systemsover 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 the financial reporting andthe preparation of financial statements for external purposes in accordance it 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 authorizations of theManagement 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 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 31 March 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 Sekhar & Co
Chartered Accountants
FRN: 003695-S
G. Ganesh
Place : Secunderabad Partner
Date : 24-May-2016 M. No.:211704