The Members of
BARTRONICS INDIA LIMITED
Report on the Standalone Financial Statements
We have audited the Standalone Financial Statements of BARTRONICS INDIA LIMITED("the Company") which comprise the Standalone Balance Sheet as at March 312019 and the Standalone Profit and Loss the Standalone Cash flow statement for the yearthen ended and notes to the Standalone financial statements including a summary of thesignificant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone financial statements give the information requiredby the Companies Act 2013 (Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 its Loss and cash flows for the yearended on that date subject to the qualifications stated in the report.
Basis for opinion
We conducted our audit in accordance with the standards on auditing specified undersection 143 (10) of the Companies Act 2013. Our responsibilities under those Standardsare further described in the auditor's responsibilities for the audit of the Standalonefinancial statements section of our report. We are independent of the Company inaccordance with the code of ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and thecode of ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Standalone financial statements.
Emphasis of Matters
We draw attention to the following matters in the Notes to the Standalone Ind ASfinancial statements:
Material Uncertainity Related to Going Concern:
We draw attention to Point (a) to (h) of this audit report and further company hasincurred net loss of Rs.7368 lakhs during the year ended march 2019.This indicatesmaterial uncertainty exists that may cast significant doubt on the company's ability tocontinue as a going concern. Our opinion is not modified in respect of this matter.
a. Reference is invited to Note 2.6 (a) forming part of the Financial Statementregarding Capital advances to the extent of Rs. 9061.49 Lakhs "We are unable toascertain whether such balances are fully recoverable" which is outstanding for along time. Accordingly we are unable to ascertain the impact if any that may arise incase any of these advances are subsequently determined to be doubtful of recovery. Had theCompany provided for the same the loss for the period would have been higher by the saidamount.
b. Note 2.8 forming part of the Statement regarding Trade Receivables aggregating toRs.72923.66 Lakhs are more than three years old and in respect of which the companyprovided only Rs.9277.70 lakhs. We are unable to form an opinion on the extent to whichthe debts may be recoverable & Value of the foreign debtors enhanced due tofluctuation in foreign currency.
c. Note 2.29 forming part of the financial statements regarding the non-repayment ofFCCB amounting to Rs. 34660.00 lakhs which has fallen due as of February 2013 and thecompany has defaulted the payments even after the expiry of extended time sought by itfrom the RBI.
d. The Company was awarded the "Aapke Dwar" Project in 2009 by the MunicipalCorproation of Delhi (MCD). The project envisages availment of various Governments toCitizen (G2C) services. The Company is required to install and operate 2000 kiosks atvarious locations in the city to facilitate the above. The Company has also the right todisplay advertisements on the external walls of the kiosks.
As at the balance sheet date 300 kiosks have been constructed and for the balance 1700kiosks allotment of clear sites by MCD is awaited.
However the matter was referred to Arbitration Courts but since the company was notable to pay Arbitration Fee on time the matter was time lapsed.
e. The LIC of India Andhra Bank Bank of India Indian Bank Barclays Bank IDBI Bankfiled cases in DRT. One Financial Creditor has field CIRP Petition against company atNCLT Hyderabad. A criminal case was also filed by a creditor at Delhi. There are certaincases against the Company pending at the Labour Court of India. Accordingly we are unableto ascertain the impact if any that may arise in case any of these matters are settledagainst the Company the outcome of the consequences may affect the going concern of thecompany.
f. The Company has provided interest on the Secured Bank Loans at the rates prevailingas on 2013 when the Company defaulted in repayments to Banks as the Banks are notproviding any statement of accounts to the Company - Refer Note No. 2.24 for details
g. With regard to investments in unquoted equities of subsidiary's for a value of Rs.30562.99 lakhs are valued at cost of investment however the present realizable value ofthese are not ascertained by the management hence the same is subject to currentvaluation.
Our opinion is not modified on respect of these matters
Basis for Qualified Opinion
Reference is invited to Note 2.17 of the financial statements the company has notprovided interest on unsecured loans as terms are not clearly available with the CompanyThis constitutes a departure from the Accounting Standards notified under the CompaniesAct 2013. The loss stated by the Company would be higher by the amount of interest hadthe same been debited to the statement of profit and loss.
Key audit matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone financial statements of the current period.These matters were addressed in the context of our audit of the Standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report
|S.No. ||Key Audit Matters ||Auditor's Response |
|1. ||Revenue Recognition : Revenue from the sale of goods (herein after referred to as "Revenue") is recognized when the Company performs its obligation to its customers and the amount of revenue can be measured reliably and recovery of the consideration is probable. ||Principal Audit Procedures Our audit approach was a combination of test of internal controls and substantive procedures including: |
| ||The timing of such recognition in case of sale of goods is when the control over the same is transferred to the customer which is mainly upon delivery. || Assessing the appropriateness of the Company's revenue recognition accounting policies in line with Ind AS 115 ("Revenue from Contracts with Customers") and testing thereof. |
| || || Evaluating the integrity of the general information and technology control environment and testing the operating effectiveness of key IT application controls. |
| ||The timing of revenue recognition is relevant to the reported performance of the Company. || Evaluating the design and implementation of Company's controls in respect of revenue recognition. |
| || || Testing the effectiveness of such controls over revenue cut off at year-end. |
| ||The management considers revenue as a key measure for evaluation of performance. There is a risk of revenue being recorded before control is transferred. Refer Note 1 to the Standalone Financial Statements - Significant Accounting Policies || Testing the supporting documentation for sales transactions recorded during the period closer to the year end and subsequent to the year end including examination of credit notes issued after the year end to determine whether revenue was recognized in the correct period. |
| || || Performing analytical procedures on current year revenue based on monthly trends and where appropriate conducting further enquiries and testing |
|2. ||Evaluation of uncertain tax positions. ||Principal Audit Procedures |
| ||The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Refer Notes 2.27 (A) to the standalone Financial Statements ||Obtained details of completed tax assessments and demands during the year ended March 31 2019 from management. We involved our internal tax experts to challenge the management's underlying assumptions in estimating the tax provision and the possible outcome of the disputes. Our internal tax experts also considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions. Additionally we considered the effect of new information in respect of uncertain tax positions as at April 1 2018 to evaluate whether any change was required to management's position on these uncertainties. |
Information other than the financial statements and auditors' report thereon
The Company's board of directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report Business Responsibility Report but does notinclude the Standalone financial statements and our auditor's 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 during the course of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
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 financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsprescribed under Section 133 of the Act read with the rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the Standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The board of directors are also responsible for overseeing the Company's financialreporting process.
Auditors Responsibility for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis 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 the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those 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 todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves 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 withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
Report on Other Legal and Regulatory Requirements
1. 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 relating to preparationof the financial statements been kept by the Company so far as it appears from ourexamination of those books.
(c) The Balance Sheet the Statement of and Profit and Loss including OtherComprehensive Income Statement of Changes in equity and the Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid Standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with rule 7 of theCompanies (Accounts) Rules2014.
(e) On the basis of the written representations received from the Directors as on March31 2019 taken on record by the Board of Directors none of the Directors is disqualifiedas on March 31 2019 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
(g) With respect to the other matters to be included in the Independent Auditors'Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
i. The Company does not have any pending litigations which would impact its financialposition.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses under the applicable law or accountingstandards.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016 (the Order')issued by the Central Government in terms of Section 143(11) of the Act we give inAnnexure B' a statement on the matters specified in paragraphs 3 and 4 of the Order.
| ||For N G Rao & Associates |
| ||Chartered Accountants |
| ||FRN: 009399S |
|Place: Hyderabad ||Nageswara Rao G |
|Date: 30th May 2019 ||Mem No. 207300 |
ANNEXURE A' TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 1(f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the Act')
We have audited the internal financial controls over financial reporting BartronicsIndia Limited (the Company') as of March 31 2019 in conjunction with our audit ofthe Standalone Ind AS financial statements of the Company for the year ended and as onthat 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 (the Guidance Note').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
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 Standards on Auditing prescribed under Section 143(10) of the Act and theGuidance Note to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with the 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 procedureselected depend on the auditors' 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 appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover 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 their liability 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 controlsover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note.
| ||For N G Rao & Associates |
| ||Chartered Accountants |
| ||FRN: 009399S |
|Place: Hyderabad ||Nageswara Rao G |
|Date: 30th May 2019 ||Mem No. 207300 |
ANNEXURE B' TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
Report on Companies (Auditor's Report) Order 2016 (the Order') issued by theCentral Government in terms of Section 143(11) of the Companies Act 2013 (the Act')of Bartronics India Limited(the Company')
1. In respect of the Company's fixed assets:
a. The Company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets.
b. The fixed assets were not physically verified during the year by the Management inaccordance with a phased programmed of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals having regard to thesize of the Company nature and value of its assets. According to the information andexplanation given to us 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
2. The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.
3. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies Limited Liability Partnerships orother parties covered in the register maintained under Section 189 of the Companies Act2013. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of the Order are notapplicable to the Company and hence not commented upon.
4. 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 ofgrant of loans making investments and providing guarantees and securities as applicable.
5. The Company has not accepted deposits within the meaning of Section 73 to 76 of theact and the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordingly theprovisions of clause 3(v) of the Order are not applicable.
6. The Company does not maintained the cost records pursuant to the Companies (CostAccounting Records) Rules 2011 prescribed by the Central Government under Section 148 (1)of the Companies Act 2013
7. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues of Provident Fund Employees' StateInsurance Investor Education and Protection Fund Income-tax Sales tax Wealth TaxService Tax Customs Duty Excise Duty Cess and other material statutory dues have beenregularly deposited during the period by the Company with the appropriate authorities.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of Provident fund Employees' State Insurance Investor Education andProtection Fund Income Tax Sales Tax Wealth tax Service Tax Customs Duty ExciseDuty Cess and other material statutory dues were in arrears as at March 31 2019 for aperiod of more than six months from the date they became payable except given below:
|Sl.No ||Particulars ||Amount |
|1. ||Central Sales Tax (2011-12) ||590577/- |
|2. ||Dividend Distribution Tax (2010-11) ||5655516/- |
|3. ||Service tax (Reverse Charge) ||155090/- |
(c) According to the information and explanations given to us the dues outstanding ofsales tax income tax customs duty wealth tax excise duty and cess on account of anydispute are as follows
|Natures of dues ||Disputed Dues ||Period to which the amount relates ||Forum where the dispute is pending |
|Income tax-FBT ||58320485/- ||2008-09 ||Appellate authority CIT Appeals |
|Income tax ||198526020/- ||2008-09 ||Appellate authority Income Tax Appellate Tribunal |
|Income tax ||23857430/- ||2009-10 ||Appellate authority Income Tax Appellate Tribunal |
|Income tax ||169815780/- ||2010-11 ||Appellate authority DRP Bangalore |
|Income tax ||64855030/- ||2011-12 ||Appellate authority Income Tax Appellate Tribunal |
|Income tax ||238266090/- ||2013-14 ||Appellate authority Income Tax Appellate Tribunal |
|Income tax ||496500450/- ||2014-15 ||Appellate authority CIT Appeals |
8. Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to information and explanations givenby the Management we are of the opinion that the Company has defaulted in repayment ofdues to financial institutions banks or debenture holders details as follows :
| || || || || ||Rs.In Lakhs |
|Sl. No ||Name of the Bank / Financial Institutions ||Installment Type ||Principal O verdue ||Interest Overdue ||Due Since (No. of installments) |
|1. ||Andhra Bank ||Monthly ||3623.15 ||6334.86 ||24 |
|2. ||Bank of Baroda ||Quarterly ||2036.09 ||2410.20 ||15 |
|3. ||Bank of India ||Quarterly ||2791.08 ||3869.45 ||8 |
|4. ||Indian bank ||Quarterly ||1199.41 ||1591.42 ||13 |
|5. ||LIC ||Quarterly ||3000.00 ||3183.26 ||21 |
| ||Totals || ||12649.73 ||17389.19 || |
The Company has default in repaying Working Capital Loans to banks details as follows: Rs.In Lakhs
|Sl.No ||Bank Name ||Sanction Amount ||Outstanding Amount as per Books |
|1. ||Andhra Bank ||4500.00 ||13104.55 |
|2. ||Bank of Baroda ||1100.00 ||2258.47 |
|3. ||Bank of India ||2000.00 ||4452.54 |
|4. ||Barclays Bank ||2000.00 ||5112.47 |
|5. ||IDBI Bank ||2500.00 ||5814.59 |
| ||Totals ||12100.00 ||30742.62 |
9. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause 3 (ix)of the Order is not applicable.
10. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no fraud on the Company by its officers oremployees has been noticed or reported during the year.
11. In our opinion and according to the information and explanations given to us theCompany has not paid / provided managerial remuneration during the year. Hence theprovisions of Section 197 read with Schedule V to the Act is not applicable.
12. The Company is not a Nidhi Company and hence reporting under clause 3(xii) of theOrder is not applicable.
13. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Act where applicable for alltransactions with the related parties and the details of related party transactions havebeen disclosed in the financial statements as required by the applicable accountingstandards.
14. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause 3(xiv) of the Order is not applicable to the Company.
15. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its Directors and hence provisions of Section 192 of theAct are not applicable.
16. The Company is not required to be registered under Section 45-I of the Reserve Bankof India Act 1934.
| ||For N G Rao & Associates |
| ||Chartered Accountants |
| ||FRN: 009399S |
|Place: Hyderabad ||Nageswara Rao G |
|Date: 30th May 2019 ||Mem No. 207300 |