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BEML Ltd.

BSE: 500048 Sector: Engineering
NSE: BEML ISIN Code: INE258A01016
BSE 00:00 | 07 Aug 656.35 3.90
(0.60%)
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654.15

HIGH

666.40

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647.10

NSE 00:00 | 07 Aug 656.60 4.15
(0.64%)
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654.70

HIGH

666.45

LOW

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OPEN 654.15
PREVIOUS CLOSE 652.45
VOLUME 141250
52-Week high 1108.20
52-Week low 369.60
P/E 39.97
Mkt Cap.(Rs cr) 2,733
Buy Price 656.35
Buy Qty 150.00
Sell Price 656.35
Sell Qty 15.00
OPEN 654.15
CLOSE 652.45
VOLUME 141250
52-Week high 1108.20
52-Week low 369.60
P/E 39.97
Mkt Cap.(Rs cr) 2,733
Buy Price 656.35
Buy Qty 150.00
Sell Price 656.35
Sell Qty 15.00

BEML Ltd. (BEML) - Auditors Report

Company auditors report

To the members of BEML LIMITED

Report on the Standalone Financial Statements

Opinion

1. We have audited the accompanying standalone financial statements of BEML LIMITED ("thecompany") which comprise the Balance Sheet as at March 31 2019 the Statement ofProfit and Loss (including Other Comprehensive Income) the Statement of Changes in Equityand the Statement of Cash Flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as "the standalone financial statements").

2. 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 ("the Act") in the manner so required and give a trueand fair view in conformity with the India Accounting Standards prescribed under section133 read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the company as at March 31 2019 and its PROFIT change inequity and its cash flows for the year ended on that date.

Basis for Opinion:

3. We conducted our audit in accordance with the Standards on Auditing [SAs] specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the audit offinancial statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountantsof India together with the ethical requirements that are relevant to our audit offinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter:

4. We draw our attention to:

a) Note No.14 in respect of Trade receivable from MOD Rs. 4899.99 lakhs towardsexchange rate difference and escalation for import of components in respect of a long termcontract for Design Development and Supply entered into with MOD in 2001. Therealization of these receivables depends on the final determination of the amount payableby MOD.

b) Note No.11 (a) in respect of the amount advanced to MAMC consortium for Rs.5851.03lakhs realization/settlement of which depends on approval from Ministry of Defence andviable business plan.

c) Note No. 39(G) regarding pending confirmation reconciliation review/ adjustment ofbalances in respect of advances balances with government departments trade payabletrade receivable other loans and advances and deposits.

Our opinion is not qualified in respect of the above matters.

Key Audit Matters:

5. Key Audit Matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the standalone financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matters described below to be the key audit mattersto be communicated in our report:

Sl.No Key Audit Matters Auditor's Response
a. Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of Ind AS 115 "Revenue from Contracts with Customers" (new revenue accounting standard): Principal Audit Procedures
The application of the new revenue accounting standard involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognised over a period. Additionally new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date. We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows:
Refer Note 30 to the Standalone Financial Statements • Evaluated the design of internal controls relating to implementation of the new revenue accounting standard.
• Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation reperformance and inspection of evidence in respect of operation of these controls.
• Selected a sample of continuing and new contracts and performed the following procedures:
• Read analysed and identified the distinct performance obligations in these contracts.
• Compared these performance obligations with that identified and recorded by the Company.
• Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration.
• In respect of samples relating to metro contracts progress towards satisfaction of performance obligation used to compute recorded revenue was verified with actual cost incurred up to that stage with estimation. We also tested the access and change management controls relating to these systems.
• Sample of revenues disaggregated by type and service offerings was tested with the performance obligations specified in the underlying contracts.
• Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings.
• We reviewed the collation of information from the budgeted information of the management used to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date.
b. Recoverability and assessment of Trade Receivables advances balances with government departments Principal Audit Procedures
The Company has net trade receivable (Note No.14) of Rs. 161304.66 lakhs after providing for impairment of Rs. 19003.07 lakhs and net Advances & balances with Government Departments (Note No. 18) of Rs. 12827.27 lakhs after providing for impairment of Rs. 9575.30 lakhs We have performed the following procedures in relation to the recoverability of trade receivables:
Trade receivables advances balances with government departments of the company comprise mainly receivables in relation to the manufacturing and sale of (i) Earth Moving equipment (ii) Rail & Metro Products (iii) Defence products (iv) spares and services (v) Advance to Vendors and (vi) Duties and taxes etc. • Tested the accuracy of aging of trade receivables advances balances with government departments at year end on a sample basis.
These balances are recognised at their anticipated realisable value which is the original invoiced amount/payments less provision (estimated for) for non-realisable value. • Obtained a list of outstanding receivables and identified any debtors wherever there is delay in payment over the terms agreed.
Valuation of trade receivables advances and balances with government departments is a key audit matter in the audit due to the size of its holding and the high level of management judgement used in determining the impairment provision. • Assessed the recoverability of the unsettled receivables on a sample basis through our evaluation of management's assessment with reference to the credit profile of the customers historical payment pattern of customers and latest correspondence with customers and to consider if any additional provision should be made; and
• Tested subsequent settlement of trade receivables after the balance sheet date on a sample basis if any.
We found the key judgements and assumptions used by management in the recoverability assessment of trade receivables to be supportable based on the available evidence.
We have drawn attention in Emphasis of Matters on trade receivables advances and balances with government departments which in our judgement are fundamental to the users' understanding of the financial statements.
c. Disputes and potential litigations: Principal Audit Procedures
Refer to Note 39.D.I.a.i. in the standalone financial statements In response to the risk of completeness of the disclosures and the completeness of the provisions in the financial statements we discussed the cases with management and reviewed correspondence and other documents exchanged between company and advocates/legal practitioners parties involved in the disputes. We verified the demands with extracts of concerned web-portals produced on sample basis.
The Company is involved in legal proceedings on disputed tax demands. The company's management has assessed that the probability of success of the demand is Remote and accordingly has not provided for the disputed demands. We tested provisions recorded in the accounting records and reviewed the disclosures for completeness based on our procedures detailed above.
Management judgement is involved in assessing the accounting for demands and in particular in considering the probability of a demand being successful and we have accordingly designated this as a focus area of the audit. The risk related to the claims is mainly associated with the completeness of the disclosure and the completeness of the provisions in the financial statements.

Information Other than the Standalone Financial Statements and Auditor's Report Thereon

6. 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 Management Discussion and Analysis BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon. Our opinionon the standalone financial statements does not cover the other information and we do notexpress any form of assurance conclusion thereon.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial Statements:

7. 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 changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

8. In preparing the financial statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters relating to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.

9. The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements:

10. 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 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 financial statements.

Report on other Legal and Regulatory Requirements

11. 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 Companies Act 2013 we give in the Annexure-A a statement on the mattersSpecified in paragraphs 3 and 4 of the Order to the extent applicable.

12. 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 Statement of Changes in Equityand Cash Flow Statement dealt with by this Report are in agreement with the books ofaccount.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e) Being a Government Company provisions of section 164(2) of the Act relating todisqualification of directors are not applicable.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company's financial statements and the operating effectiveness of suchcontrols refer to our separate Report in Annexure-B.

g) With respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest 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 financial statements. Refer Note 39(D)(I)(a)(ii) of standalonefinancial statements.

ii. The Company did not have any derivative contracts but have provided materialforeseeable losses of Rs. 1123.57 Lakhs for onerous contracts (Refer Note 37).

iii. There were no amounts which required to be transferred by the Company to theInvestor Education and Protection Fund.

13. As required by Section 143(5) of the Act which is applicable to the Company wegive our separate report in Annexure-C.

For V. KRISHNAN & CO.
Chartered Accountants
Firm Regn No: 001541S
M.GOPINATH-Partner
Place: Bengaluru (camp) Membership No. 023819
Date: 25.05.2019

Referred in paragraph 11 of the INDEPENDENT AUDITOR'S REPORT of even date on thestandalone financial statements of M/s. BEML LIMITED for the year ended 31.03.2019

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that

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

(b) The Fixed Assets have been physically verified by the management in a phasedmanner designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the company and nature of itsbusiness. Pursuant to the program a portion of the fixed asset has been physicallyverified by the management during the year and as informed to us no materialdiscrepancies have been noticed between the book records and physical verification offixed assets.

(c) The title deeds of immovable properties are held in the name of the company exceptin the following cases.

1) As explained to us Building costing Rs. 33.00 lakhs (carrying value Rs.15.86 lakhs)situated at Mumbai and Ranchi are pending for registration / khatha transfer.

2) As explained to us Lease Hold land costing Rs. 129.41 Lakhs at Hyderabad for whichregistration will be completed after development of showroom.

3) As explained to us free hold land measuring 560 acres at Mysore costing Rs. 307.58lakhs (including additional compensation of Rs. 183.57 lakhs demanded by KIADB) for whichtitle deeds have to be obtained from KIADB.

4) Kerala Industrial Infrastructure Develop-ment Corporation (KIIDC) has allottedLeased land measuring 374.59 acres for a lease premium of Rs. 2547.21 lakhs for 99 yearslease period w.e.f 01.07.2009. The actual land handed over by KIIDC was measuring 374.16acres and revised lease premium payable is Rs. 2544.29 lakhs only and execution of formalamendment of lease agreement is pending.

5) As explained to us the Company has taken land measuring 1109 acres and twoworkshops on lease for a period of 10 years vide Lease Agreement dated 5th May 2004w.e.f. 28.04.2004 from M/s. Bharat Gold Mines Limited (BGML) and a sum of 100 Lakhs waspaid as non-refundable deposit The Company had incurred on the above land a sum of Rs.1452.95 lakhs ( with carrying value of Rs.948.61 Lakhs) on Buildings included in PropertyPlant and Equipment (Note 3) as at the year end. Vide order dated 09.07.2013 the Hon'bleSupreme Court of India upheld the decision of the Union Government to float a globaltender of BGML assets with an observation about the existence of sub-lease of a portion ofthe land to BEML Ltd expired on 28.04.2014 to be included in the tender documents. TheCompany filed an Interlocutory application before the Hon'ble Supreme Court of Indiapraying for exclusion of land leased to BEML from the purview of global tender which wasdismissed. Since the lease agreement provides for the continuation of the lease even afterthe expiring of lease period on 28.04.2014 till the final decision of the Company /Government in this regard the operations of the company on the above land is continued.

6) As explained to us the Company has taken action to obtain title documents inrespect of the following immovable properties;

a) Flat at Roshan Complex Madras - Rs. 4.04 lakhs

b) Flat at Ashadeep New Delhi - Rs. 2.80 lakhs

c) Office building at Nagpur - Rs. 27.18 lakhs

d) Lease Hold Land at Singrauli - Rs. 1.75 lakhs.

7) The Company has initiated legal action to obtain possession of 1.88 acres of landout of 5 acres at Tatisileai Arra Village Ranchi.

ii) The company has conducted the physical verification of the inventory excludingmaterials lying with third parties and work in progress during the year in accordance withprogramme designed to cover all items over a phased manner. According to the informationand explanation given to us and in our opinion the frequency of physical verification isreasonable. The discrepancies noticed on physical verification of the inventory ascompared to books records which has been properly dealt with in the books of account werenot material.

iii) The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the Register maintained undersection 189 of the Act. Accordingly the provisions of paragraph 3 (iii) (a) (b) and (c)of the Order are not applicable to the Company.

iv) There are no transactions of loans to directors and being a Government Companyengaged in defence production provisions of Sec 185 and 186 of the Companies Act 2013 inrespect of loans investments guarantees and security are not applicable.

v) The Company has not accepted any deposits to which the provisions of Sections 73 to76 or any other relevant provisions of the Act and the rules framed there under and alsothe directions issued by the Reserve Bank of India.

vi) Maintenance of Cost Records has been specified by the Central Government undersub-section (1) of Section 148 of the Act in respect of the activities carried on by thecompany. We are of the opinion that prima facie the prescribed records have been made andmaintained.

vii) (a) The Company has been generally regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance Income-Tax Sales tax Service TaxDuty of Customs Duty of Excise Value added Tax Cess and any other statutory dues withthe appropriate authorities. According to the information and explanations given to us noundisputed amounts payable in respect of the above were in arrears as at March 31 2019for a period of more than six months from the date they became payable.

(b) The details of dues of income-tax sales tax service tax duty of customs duty ofexcise value added tax outstanding on account of any dispute is furnished below :-

Name Of The Statute Nature Of Disputed Tax Amount (Rs. Lakhs) Period To Which The Amount Relates Forum Where The Dispute Is Pending
Central Excise Act 1944 Excise Duty incl. Interest and Penalty 28761.75 2003-04 to June 2017 CESTAT Bangalore
Excise Duty incl. Interest and Penalty 735.55 2005-06 to 2006-07 Appellate Authority
National Calamity Contingency Duty 1193.30 2014-15 CESTAT
Total Excise Duty 30690.60
Service Tax Act 1994 Service Tax including penalty 1352.25 2004-05 2006-07 2010-11 & Feb 2014 to March 2015 CESTAT Bangalore
Service Tax 2112.24 2006-07 to 2016-17 Appellate Authority
Total Service Tax 3464.49
The Customs Act 1962 Customs Duty 2126.30 2006-07 CESTAT Chennai
The Karnataka Municipal Municipality Taxes KGF 706.11 2012 City Municipality council - KGF
Corporation Act 1976 Property Tax 109.11 1995-96 to 2005-06 City Civil Judge Bangalore
Total ED Service Tax CD & Property tax 37096.61
Sales Tax Act of Various States Sales Tax /VAT 10.24 2003-04 Maharashtra Sales Tax tribunal
Sales Tax /VAT 6631.33 December 2005 to March 2008 & 2008- 09 2009- 102010-11 Karnataka Sales Tax tribunal
Sales Tax /VAT 604.32 1999-00 2001-02 2002-03 2003-04 2005-06 2006-07 2007-08 2009-10 Revision & Appellate Board of Various States
Sales Tax /VAT 2041.73 From 1983-84 to 2012-13 Other appellate authorities
Total Sales Tax / VAT 9287.62
Grand Total 46384.23
Amount Deposited under Protest Central Excise/ Customs 146.57
Amount Deposited under Protest Sales Tax VAT 2867.60
TOTAL 3014.17

viii) The Company has not defaulted in repayment of loans or borrowings due tofinancial institutions banks Government and to debenture holders.

ix) The company has not raised moneys by way of initial public offer or further publicoffer including debt instruments and term Loans during the year.

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) Being a Government company the provisions of sec 197 read with schedule V to theAct relating to the managerial remuneration are not applicable.

xii) The Company is not a Nidhi Company and accordingly paragraph 3 (xii) of the Orderis not applicable to the Company.

xiii) All transactions with the related parties are in compliance with section 177 and188 of Companies Act 2013 and the details have been disclosed under Note 39C in thestandalone financial Statements as required by the applicable Accounting Standards.

xiv) The company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year and accordingly paragraph 3(xiv) of the Order is not applicable to the Company.

xv) The company has not entered into any noncash transactions with directors or personsconnected with him and accordingly paragraph 3 (xv) of the Order is not applicable to theCompany.

xvi) The Company is not required to be registered under section 45 IA of the ReserveBank of India Act 1934 and accordingly paragraph 3 (xvi) of the Order is not applicableto the Company.

For V. KRISHNAN & CO.
Chartered Accountants
Firm Regn No: 001541S
M.GOPINATH-Partner
Place: Bengaluru (camp) Membership No. 023819
Date: 25.05.2019

ANNEXURE-B

Referred in clause (f) paragraph 12 of the INDEPENDENT AUDITOR'S REPORT of evendate on the standalone financial statements of M/s. BEML LIMITED for the year ended31.03.2019

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 M/s.BEML LIMITED (hereinafter referred as "the Company") as of March 312019 in conjunction with our audit of the standalone financial statements of the companyfor 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 Reporting (theGuidance Note) issued 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 company's policies the safeguarding ofits assets the prevention and detection 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.

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 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 plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting were established and maintained and if such controlsoperated 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 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 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 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 over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2019 based on"the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India".

For V. KRISHNAN & CO.
Chartered Accountants
Firm Regn No: 001541S
Place: Bengaluru (camp) M.GOPINATH-Partner
Date: 25.05.2019 Membership No. 023819

ANNEXURE -C

Referred in paragraph 13 of the INDEPENDENT AUDITOR'S REPORT of even date on thestandalone financial statements of M/s. BEML LIMITED for the year ended 31.03.2019

Report as required by section 143 (5) of the Act 2013 relating to the directionsissued by the Comptroller and Auditor General of India.

I. Whether the company has system in place to process all the accounting transactionsthrough IT system? If yes the implications of processing of accounting transactionsoutside IT system on the integrity of the accounts along with the financial implicationsif any may be stated.

Comment: Yes the company has system in place to process all the accountingtransactions through IT system. We observed that no accounting transactions are processedoutside IT system on the integrity of the accounts.

II. Whether there is any restructuring of an existing loan or cases of waiver/write offof debts /loans/ interest etc. made by a lender to the company due to the company'sinability to repay the loan? If yes the financial impact may be stated.

Comment: There are no instances of restructuring of an existing loan or cases ofwaiver/write off of debts/loans/interest etc made by a lender to the company due tocompany's inability to repay the loan.

III. Whether funds received/receivable for specific schemes from central/ stateagencies were properly accounted for/ utilized as per its term and conditions? List thecases of deviation.

Comment: The company during the year of audit has not received/receivable of fundsfor specific schemes from Central/State agencies.

For V. KRISHNAN & CO.
Chartered Accountants
Firm Regn No: 001541S
Place: Bengaluru (camp) M.GOPINATH-Partner
Date: 25.05.2019 Membership No. 023819