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Balkrishna Industries Ltd.

BSE: 502355 Sector: Auto
NSE: BALKRISIND ISIN Code: INE787D01026
BSE 00:00 | 20 May 2113.75 11.85
(0.56%)
OPEN

2118.15

HIGH

2143.50

LOW

2098.45

NSE 00:00 | 20 May 2113.15 10.70
(0.51%)
OPEN

2120.05

HIGH

2143.00

LOW

2098.05

OPEN 2118.15
PREVIOUS CLOSE 2101.90
VOLUME 5649
52-Week high 2724.40
52-Week low 1681.95
P/E 28.97
Mkt Cap.(Rs cr) 40,859
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 2118.15
CLOSE 2101.90
VOLUME 5649
52-Week high 2724.40
52-Week low 1681.95
P/E 28.97
Mkt Cap.(Rs cr) 40,859
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Balkrishna Industries Ltd. (BALKRISIND) - Auditors Report

Company auditors report

To the Members of

BALKRISHNA INDUSTRIES LIMITED

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the standalone financial statements of Balkrishna Industries Limited("the Company") which comprise the Balance Sheet as at 31st March 2021 andthe Statement of Profit and Loss (including other comprehensive income) Statement ofChanges in Equity and Statement of Cash Flows for the year then ended and notes to thestandalone financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as "the standalonefinancial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2021 and profit (including othercomprehensive income) changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor’s Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otheraccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

Key Audit Matters

Key audit matters (‘KAM’) are those matters that in our professionaljudgment were of most significance in our audit of the standalone financial statements ofthe current period. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters.

Description of Key Audit Matters

Capitalisation of property plant and equipment Principal Audit Procedures
During the year ended 31st March2021 the Company has incurred significant capital expenditure. Further the total additions to property plant and equipment at various factories of the Company was Rs. 46617 lakhs in the current year as set out in Note No.2. Significant level of judgement is involved to ensure that the aforesaid capital expenditure/ additions meet the recognition criteria of Ind AS 16 - Property Plant and Equipment. We assessed the capitalisation process and tested the design and operating effectiveness of the controls in the process.
As a result the aforesaid matter was determined to be a key audit matter. Assessed the nature of the additions made to property plant and equipment and capital work-in-progress on a test check basis to test that they meet the recognition criteria as set out in para 16 to 22 of Ind AS 16.
Reviewed the project completion details provided by the management to determine whether the asset is in the location and condition necessary for it to be capable of operating in the manner intended by the management.
Based on the above procedures management’s assessment in respect of Capitalisation of property plant and equipment in the Standalone Financial Statements are considered to be adequate.

Other Information

The Company’s management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in theCompany’s annual report but does not include the standalone financial statements andour auditors’ report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management’s Responsibility for the Standalone Financial Statements

The Company’s management and Board of Directors are responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the state of affairs profit / loss(including other comprehensive income) changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified 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 andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone financial statements management and Board of Directors areresponsible for assessing the Company’s ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Board of Directors are also responsible for overseeing the Company’s financialreporting process.

Auditor’s Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor’s report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of financial statements whetherstandalone due to fraud or error design and perform audit procedures responsive tothose risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to standalone financial operatingeffectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management’s use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor’s report to therelated disclosures in the standalone financial are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditors’report. However future events or conditions may cause the Company to cease to continue asa going concern.

Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors’ report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors’ Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of Section 143(11) of theAct we give in "Annexure A" a statement on the matters specified in paragraphs3 and 4 of the Order to the extent applicable.

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 Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account.

(d) In our opinion the aforesaid standalone financial statements comply with the IndAS specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 st March 2021 from being appointed as a director in terms ofSection 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(g) With respect to the other matters to be included in the Auditor’s Report inaccordance with the requirements of section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

(h) 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 information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31st March 2021on its financial position in its standalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and

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

For N.G.THAKRAR & CO.

CHARTERED ACCOUNTANTS

(FIRM REG. NO. 110907W)

NATWAR THAKRAR

PARTNER

MEMBERSHIP NO. 036213

UDIN: 21036213AAAABT2270

PLACE: Mumbai

DATE: 14th May 2021

Annexure - A to the Independent Auditors’ Report

The Annexure referred to in Independent Auditors’ Report to the members of theCompany on the standalone financialstatements for the year ended 31st March 2021 wereport that:

(i) (a) In our opinion the Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) As explained to us physical verification of these fixed assets is being conductedin a phased programme by the management designed to cover all the assets over a period ofthree to four years which in our opinion is reasonable having regard to the size of theCompany and the nature of assets. According to the information and explanations given tous no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) As explained to us physical verification of inventory has been conducted atreasonable intervals by the management and discrepancies noticed on such physicalverification between physical stocks and book records were not material considering theoperations of the Company and the same have been properly dealt with in the books ofaccount.

(iii) In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to any companies firms LimitedLiability Partnerships or other parties as covered in the register maintained underSection 189 of the Act. Accordingly the provisions of clause 3(iii) (a) (b) and (c) ofthe order are not applicable.

(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 Act with respectto loans investments and guarantees made.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit within the meaning of Section 73 to 76 of the Actand the rules framed thereunder.

(vi) We have broadly reviewed the books of account maintained by the Company in respectof products where pursuant to the Rules made by the Central Government the maintenanceof cost records have been prescribed under Section 148 (1) of the Act and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. We have not however made a detailed examination of the records with a viewto determining whether they are accurate or complete.

(vii) (a) According to the records of the Company and the information and explanationsgiven to us the Company has generally been regularly depositing with the appropriateauthorities undisputed statutory dues including Provident Fund Employees’ StateInsurance Income tax Sales-Tax Service tax Duty of Customs Duty of Excise Valueadded Tax Goods and Service Tax Cess and any other statutory dues applicable to it.There are no undisputed statutory dues as referred to above as at 31st March 2021outstanding for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us the dues in respect ofIncome Tax Sales Tax Duty of Customs Excise Duty and Service Tax that have not beendeposited with the appropriate authorities on account of dispute and the forum where thedisputes are pending are given below :-

Name of Statute Nature of Dues Amount Period to which the Amount Relates Forum where dispute is pending
(Rs. in lakhs)
Sales Tax Act Sales Tax (Including Interest and Penalty) 3 2004-05 High Court
61 2011-12 Tribunal
301 1996-97 2012-2015 & 2017-18 Commissioner (Appeals)
7 2013-14 Assessing Authority
Customs Act Custom Duty (Including 6036 2012-2014 Supreme Court
Interest and Penalty) 2612 2012-2016 CESTAT
543 2012-13 Assessing Authority
Central Excise And Service Tax Act Excise Duty/ Service tax (Including Interest and Penalty) 3549 2007-2013 High Court
96 2006-2009 & 2012-2017 CESTAT
165 2003-2009 & 2015-16 Assessing Authority

(viii) Based on our audit procedures and according to the information and explanationsgiven by the management the Company has not defaulted in repayment of loans from bank.Further as per the records of the Company during the year there were no loans orborrowings from any financial institution government or debenture holders.

(ix) In our opinion and according to the information and the explanations given to usthe term loans have been applied for the purposes for which they were obtained. Further asper the records the Company did not raise any money by way of initial public offer orfurther public offer (including debt instruments).

(x) Based upon the audit procedures performed and to the best of our knowledge andbelief and according to the information and explanations given to us no fraud by thecompany or any fraud on the Company by its officers or employees has been noticed orreported during the year.

(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableIndian Accounting Standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For N.G.THAKRAR & CO.

CHARTERED ACCOUNTANTS

(FIRM REG. NO. 110907W)

NATWAR THAKRAR

PARTNER

MEMBERSHIP NO. 036213

UDIN: 21036213AAAABT2270

PLACE: Mumbai

DATE: 14th May 2021

Annexure - B to the Independent Auditors’ Report

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 BalkrishnaIndustries Limited ("the Company") as of 31 st March 2021 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

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 (‘ICAI’). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial that were operating effectively for ensuring the orderly and efficient conductof its business including adherence to company’s policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under 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 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 judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror. We believe that the audit evidence we have obtained is sufficient and appropriateto provide 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 company’s internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company’s internal financial control overfinancial reporting includes procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company’s assets that could havea 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 that the internal financial control over financialreporting may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an internal financial controls withreference to financial statements as at 31 st March 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For N.G.THAKRAR & CO.

CHARTERED ACCOUNTANTS

(FIRM REG. NO. 110907W)

NATWAR THAKRAR

PARTNER

MEMBERSHIP NO. 036213

UDIN: 21036213AAAABT2270

PLACE: Mumbai

DATE: 14th May 2021

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