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Blue Star Ltd.

BSE: 500067 Sector: Engineering
NSE: BLUESTARCO ISIN Code: INE472A01039
BSE LIVE 15:53 | 22 Sep 746.60 -39.15
(-4.98%)
OPEN

774.20

HIGH

774.20

LOW

740.35

NSE 15:40 | 22 Sep 750.45 -35.25
(-4.49%)
OPEN

780.75

HIGH

782.15

LOW

743.25

OPEN 774.20
PREVIOUS CLOSE 785.75
VOLUME 195553
52-Week high 812.70
52-Week low 435.00
P/E 67.57
Mkt Cap.(Rs cr) 7,152
Buy Price 746.60
Buy Qty 17.00
Sell Price 0.00
Sell Qty 0.00
OPEN 774.20
CLOSE 785.75
VOLUME 195553
52-Week high 812.70
52-Week low 435.00
P/E 67.57
Mkt Cap.(Rs cr) 7,152
Buy Price 746.60
Buy Qty 17.00
Sell Price 0.00
Sell Qty 0.00

Blue Star Ltd. (BLUESTARCO) - Auditors Report

Company auditors report

To

The Members of

Blue Star Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Blue StarLimited ("the Company") which comprise the Balance Sheet as at March 31 2017the Statement of Profit and Loss including the statement of Other Comprehensive Incomethe Cash Flow Statement and the Statement of Changes in Equity for the year then endedand a summary 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 stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act. read with Rule 7 of the Companies (Accounts) Rules 2014 and theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial control that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the Ind AS financial statements that give a trueand fair view and are free from material misstatement whether due 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 theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit of the standalone Ind AS financial statements in accordance with the Standardson Auditing issued by the Institute of Chartered Accountants of India as 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 standaloneInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone Ind AS financial statements that give a true and fair viewin order to design audit procedures that are appropriate in the circumstances. An auditalso includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone Ind AS financial statements. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea 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 standalone Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 312017 its profit including other comprehensive income its cash flows andthe changes in equity for the year ended on that date.

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 ofthe Act we give in the Annexure 1 a statement on the matters specified in paragraphs 3and 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 purpose 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 Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 Companies (Indian Accounting Standards) Rules 2015 asamended;

(e) On the basis of written representations received from the directors as on March312017 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2017 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 2" to this report; and

(g) 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 financialposition in its standalone Ind AS financial statements - Refer Note 36 (a) to thestandalone Ind AS financial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts. Further theCompany does not have any long term derivative contracts. Refer Note 18 to the standaloneInd AS financial statements;

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

iv. The Company has provided requisite disclosures in Note 47 to these standalone IndAS financial statements as to the holding of Specified Bank Notes on November 8 2016 andDecember 30 2016 as well as dealings in Specified Bank Notes during the period fromNovember 8 2016 to December 30 2016. Based on our audit procedures and relying on themanagement representation regarding the holding and nature of cash transactions includingSpecified Bank Notes we report that these disclosures are in accordance with the books ofaccounts maintained by the Company and as produced to us by the Management.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration

Number: 324982E/E300003

per Ravi Bansal

Partner

Membership Number: 49365

Place of signature: Mumbai

Date: May 09 2017

ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE IND ASFINANCIAL STATEMENTS OF BLUE STAR LIMITED

Annexure referred to in paragraph 1 under the heading "Report on other legal andRegulatory Requirement" of our report of even date Re: Blue Star Limited ('theCompany")

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

(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in fixed assets are held in the name of theCompany.

ii. The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on physicalverification.

iii. According to the information and explanations given to us the Company has notgranted 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. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.

iv. In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Companies Act 2013 in respect of loans todirectors including entities in which they are interested and in respect of loans andadvances given investments made and guarantees and securities given have been compliedwith by the Company.

v. The Company has not accepted any deposits within the meaning of Sections 73 to 76 ofthe Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordinglythe provisions of clause 3(v) of the Order are not applicable.

vi. We have broadly reviewed the books of account maintained by the Company pursuant tothe rules made by the Central Government for the maintenance of cost records under section148(1) of the Companies Act 2013 related to the manufacture or service of airconditioning and refrigeration products and are of the opinion that prima facie thespecified accounts and records have been made and maintained. We have not however made adetailed examination of the same.

vii. (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax customs duty excise duty value added tax cess andother material statutory dues applicable to it.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxsales-tax duty of custom duty of excise value added tax cess and other materialstatutory dues were outstanding at the year end for a period of more than six monthsfrom the date they became payable.

(b) According to the records of the Company the dues outstanding of income-taxsales-tax service tax excise duty value added tax on account of any dispute are asfollows:

Name of Statute Nature of dues Amount ' Lacs * Period to which the amount relates Forum where dispute is pending
Disallowance for deduction Tax u/s 80IA/80IB/80IC/80HHC 955 AY 1998-99 AY 2000-01 to AY 2007-08 CIT (A)/ITAT/High Court
Disallowance of software expenses as revenue expenses 128 AY 2007-08 ITAT
Income Act 1961 Disallowance on advertisement on brand building considered as revenue expense 127 AY 2006-07 ITAT
Disallowance u/s 14A 1 AY 2007-08 ITAT
Reduction of claim u/s 10A 368 AY 2005-06 and AY 2006-07 ITAT
Short deduction of Tax at Source on payment to subcontractors 166 AY 2008-09 and AY 2009-10 CIT (A)
Other disallowances 8 AY 2007-08 ITAT
Demand due to difference in AMC tax computation 144 FY 2011-12 Asst. Comm./Jt. Comm.
Local Sales Tax VAT Act and Central Sales Tax Act Demand due to excess tax payable as computed by assessing officer against that paid by the Company 6809 FY 1990-91 FY 1995-96 to FY 2010-11 and FY 2013-14 to FY 2014-15 Asst. Comm./Jt. Comm. / CESTAT/High Court
Denial of ITC and disallowance due to non submission of forms 4228 FY 1992-93 FY 2000-01 FY 2001-02 to FY 2006-07 to FY 2013-14 Asst. Comm./Jt. Comm./ CESTAT/High Court
Disallowance made for stock transfer 121 FY 2004-05 and FY 2011-12 Dy. Comm./Asst. Comm.
Demand due short payment of service tax as alleged by the assessing officer 20963 FY 2003-04 to FY 2013 -14 CEC (Appeals)/CESTAT
Service Tax under Finance Act 1994 Demand due to excess tax payable as computed by assessing officer against that paid by the Company 8 FY 2003-04 High Court
Demand of service tax on commission received from abroad 837 FY 2005-06 to FY 2009-10 CEC (Appeals)/ CESTAT/High Court
Denial of CENVAT credit availed on some services 78 FY 2005-06 to FY 2012-13 CEC (Appeals)/CESTAT
Denial of exemption on services provided 9 FY 2007-08 to FY 2008-09 CEC (Appeals)
Reversal of CENVAT credit on trading activity 91 1 FY 2004-05 to FY 2011-12 CEC (Appeals)/CESTAT
Demand due to excess tax payable as computed by assessing officer against that paid by the Company 248 FY 1996-97 to FY 1990-91 CEC (Appeals)/High Court/ Supreme Court
Demand for excise duty payable as alleged by assessing officer 144 FY 1998-99 to FY 2003-04 and FY 2008-09 CESTAT
Customs Act 1962 and Central Excise Act 1944 Denial of CENVAT credit on some services 237 FY 1994-95 to FY 1995-96 and FY 2006-07 to FY 2014-15 CEC (Appeals)/CESTAT
Denial of exemption available 24 FY 2009-10 CESTAT
Rejection of Refund/CENVAT Credit claimed by the Company 48 FY 2011-12 and FY 2012-13 CEC (Appeals)
Rejection of Refund of Duty claimed by the Company 7 FY 2009-10 CESTAT
Other miscellaneous issues 28 FY 2008-09 and FY 2015-16 CESTAT

* net of advances

viii. In our opinion and according to the information and based on explanationsprovided to us the Company has not defaulted in repayment of dues to a financialinstitution bank or debenture holders. The Company has not taken any loan or borrowingfrom the government.

ix. According to the information and explanations given by the management the Companyhas not raised any money by way of initial public offer/further public offer/debtinstruments and term loans hence reporting under clause (ix) is not applicable to theCompany and hence not commented upon.

x. We have been informed by the management of the Company that it detected through itswhistle blower mechanism certain instances of fraud for which investigations have beencompleted involving certain employees of the Company colluding with vendors to receiveundue benefits resulting in a loss to the Company of '2.70 Crores which was subsequentlyrecovered.

xi. According to the information and explanations given by the management themanagerial remuneration has been paid/provided in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Companies Act 2013.

xii. In our opinion the Company is not a nidhi Company. Therefore the provisions ofclause 3 (xii) of the order are not applicable to the Company and hence not commentedupon.

xiii. According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3 (xiv) are not applicable tothe Company and not commented upon.

xv. According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim.

xvi. According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration

Number: 324982E/E300003

per Ravi Bansal

Partner

Membership Number: 49365

Place of signature: Mumbai

Date: May 09 2017

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE IND AS STANDALONEFINANCIAL STATEMENTS OF BLUE STAR LIMITED

Annexure referred to in paragraph 2(f) under the heading "Report on other Legaland Regulatory Requirements" of our report of even date- Report on the InternalFinancial Controls under Clause (i) of sub-section 3 of Section 143 of the Companies Act2013 ("the Act")

We have audited the internal financial controls over financial reporting of Blue StarLimited ("the Company") as of March 312017 in conjunction with our audit of theInd AS 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 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 the 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.

Auditor's 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 as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was 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 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 internal financial controls system overfinancial 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 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 312017 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 S R B C & CO LLP

Chartered Accountants

ICAI Firm Registration

Number: 324982E/E300003

per Ravi Bansal

Partner

Membership Number: 49365

Place of signature: Mumbai

Date: May 09 2017