Benara Bearing & Piston Limited
Report on the Audit of the Financial Statements
We have audited the financial statements ofBenara Bearing & PistonLimited("theCompany") which comprise the Balance Sheet as at March 31st2019Profitand Loss statementfor theyear ended and notes to the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the CompaniesAct 2013 (Act') in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2019 itsProfitsfor theyearended on that date.
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 financialstatements section of our report. We are independent of the Company in accordance with thecodeof ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the rules thereunder and we have fulfilled our otherethicalresponsibilities in accordance with these requirements and the code of ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.
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.
Key audit matters
|S/no. Key audit matters ||How our audit addressed the key audit matter |
|1. The Company has investments in Research and development of new product and new market Rs- 481.18 Lacs. ||Our audit procedures included amongst others the following: |
|We identified this as a KAM considering: ||? Evaluating the Company's process for identifying the expenses as Research and development; |
| ||? reconciled input data to approved budgets and tested mathematical accuracy; |
|2. The Company has Exceptional Item of new product and new market Rs- 104.36 Lacs. The Said expenses shown as Exceptional items ||? Discussed management's strategic and operational plans for the foreseeable future. Our audit procedures included amongst others the following: |
| ||? Evaluating the Company's process for identifying the expenses indicators of exceptional item; |
| ||? reconciled input data to approved budgets and tested mathematical accuracy; |
| ||? Discussed management's strategic and operational plans for the foreseeable future. |
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 but does not include the financial statementsand our auditor's report thereon.
Our opinion on the financial statements does not coverthe other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other informationismaterially inconsistent with the financial statements or our knowledge obtained duringthe 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.
Responsibilities of Management for the Financial Statements
The Company's board of directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give atrue and fair view of the financial position financial performance and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the accounting standards 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 wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements the management is responsible for assessing thecompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless themanagement either intends to liquidate thecompanyor to cease operations or has norealistic alternative but to do so.
The management is responsible for overseeing thecompany's financial reporting process.
Auditor's Responsibilities 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 thatincludes 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 financial statements. As part of an audit in accordance with SAs weexercise professional judgment and maintain 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 andobtain 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 theCompanies
Act 2013 we are also responsible for expressing our opinion on whether the companyhas adequate internal financial controls system in place and the operating effectivenessof such controls Evaluate the appropriateness of accounting policies used andthereasonableness of accounting 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 uncertaintyexistsrelated to events or conditions that may cast significant doubt on the Company's abilityto continue as a going concern. If we conclude that a material uncertainty exists we arerequired to draw attention in our auditor's report to the related disclosures in thefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions 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 financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner thatachieves 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 the management with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central
Government of India in terms of Section 143(11) of the Act we give in "AnnexureA" a statement on the matters specified in paragraphs 3 and 4 of the Order to theextent applicable.
2. As required by Section 143 (3) of the Act we report that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit. b) In ouropinion proper books of account as required by law have been kept by the Company so faras it appears from our examination of those books. c) The Balance Sheet and the Statementof Profit and Loss dealt with by this Report are in agreement with the books of account.
d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. e) On the basis of the written representations received from thedirectors as on 31st March 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2019 from being appointed as a director interms of Section 164 (2) of the Act. f) With respect to the adequacy of the internalfinancial controls with reference to financial statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in "Annexure B" g)With respect to the matter to be included in the Auditors' Report under Section 197(16) ofthe Act: In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limits laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.
h) 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. TheCompany has disclosed the impact of pending litigations as at 31 March 2019 on itsfinancial position in its standalone financial statements - Refer Note-25(i) to thestandalone financial statements ii. The Company did not have any long-term contractsincluding derivative contracts for which there were any material foreseeable losses. iii.There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company
|For AGRAWAL JAIN & GUPTA |
|Chartered Accountants |
|Firm Registration No. 0013538C |
|CA Narayan Swami |
|Membership No. 409759 |
|Agra: 30th May 2019 |
Annexure "A" to the Independent Auditors' Report on the Standalone FinancialStatements of Benara Bearings & Pistons Limited
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' section of our Report ofeven date)
i. In respect of its fixed assets: a) The Company has maintained proper records showingfull particulars including quantitative details and situation of fixed assets on the basisof available information. b) As explained to us all the fixed assets havebeen physicallyverified by the management in a phased periodical manner which in our opinion isreasonable having regard to the size of the Company and nature of its assets. No materialdiscrepancies were noticed on such physical verification. c) As per the information andexplanations provided to us title deeds of immovable properties are in the name of theCompany.
ii. In our opinion the inventories have been physically verified during the year bythe Management at reasonable intervals and as explained to us no material discrepancieswere noticed on physical verification.
iii.The Company has granted loans to following companies covered in the Registermaintained under section 189 of the Act.Further the terms and conditions of the grant ofsuch loan is not prejudicial to the company's interest. The loan is repayable on demand.
|S.No. Name of the company ||Relation ||Loan & Advances as on 31st March 2019 ||Loan &Advances as on 31st March 2018 |
|1. Benara solar Private company ||Wholly Owned Subsidiary ||55639841 ||38065873 |
iv. In our opinion and according to the information and explanations given to ustheCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities.
v. According to the information and explanations given to us the Company has notaccepted any deposit from the public. Therefore the provisions of Clause (v) of paragraph3 of the Order are not applicable to the Company.
vi. As informed to us the maintenance of Cost Recordsasspecified by the CentralGovernment under sub-section(1) of Section 148 of theActis not applicable.
vii.In respect of statutory dues: a. According to the records of the Companyundisputed statutory dues including Provident Fund Employees' State Insurance IncomeTax Sales Tax Service Tax Customs Duty Excise Duty Value Added Tax Cess and othermaterial statutory dues have been generally regularly deposited with the appropriateauthorities.
According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues wereoutstanding as at March 31 2019for a periodof more than six months from the date of becoming payable.
b. Details of dues of Income Tax Sales Tax Service Tax Customs Duty Excise Duty andValue Added Tax which have not beendeposited as on March 312019on account of disputes aregiven below:
|Name of the Statute ||Period to which amount relates ||Amount of Dues (Rs.) ||Forum where dispute is pending |
|Income Tax Act ||A.Y 2010-11 ||193210/- ||Deputy Commissioner CIT-1(A) |
|1961 ||A.Y 2014-15 ||3204340/- ||Deputy Commissioner CIT-1(A) |
| ||A.Y. 2017-18 ||2434730/- ||DeputyCommissioner CIT-1(A) |
|Tax deduction at ||F.Y. 17-18 ||3689/- ||Income Tax Officer TDS-1 |
|source ||F.Y.2016-17 ||58316/- ||Income Tax Officer TDS-1 |
| ||F.Y.2015-16 ||1970/- ||Income Tax Officer TDS-1 |
| ||Prior to F.Y. 2012-13 ||980336/- ||Income Tax Officer TDS-1 |
|Sales tax Demand || ||3115899/- ||Pending before Appeal |
|Central excise Act 1944 || ||3036098/- ||Pending before Appeal |
viii.In our opinion and according to the information and explanations given to us theCompany hasnot defaulted in the repayment of loans or borrowings to financialinstitutions banks and Government anddues to debenture holders.
ix. In our opinion andaccording to the information and explanations given to us moniesraised by way of debt instruments and the term loans during the year have been applied bythe Company for the purposes for which they were raised.
x. In our opinion and according to the information and explanations given to us nomaterial fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the year.
xi. In our opinion and according to the information and explanations given to us theCompany haspaid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.
xii.The Company is not a Nidhi Company and hence reporting under clause (xii) ofParagraph 3 of the Order is not applicable.
xiii. In our opinion and according to the information and explanations given to us theCompany's transactions with its related party are in compliance with Sections 177 and 188of the Companies Act 2013 where applicable and details of related party transactionshave been disclosed in the financial statements etc. as required by the applicableaccounting standards.
xiv.During the year the Company hasnotmade preferential allotment/private placement ofequitysharesand the requirement of Section 42 of the Companies Act 2013 have beencomplied with and the amount raised have been used for the purposes for which the fundswere raised.
xv.In our opinion and according to the information and explanations given to us duringthe year the Company has not entered into any non-cash transactions with its directors orpersons connected with him and hence reporting under clause (xv) of Paragraph 3 of theOrder is not applicable to the Company.
xvi.In our opinion and according to information and explanations provided to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.
|In terms of our report of even date attached. |
|For Agrawal Jain & Gupta |
|Chartered Accountants |
|F R N-013538C |
|CANarayan Swami |
|M R N :409759 |
|Date :30May 2019 |
|Place :Agra |
Annexure "B" to the Independent Auditors' Report on the StandaloneFinancialStatements of Benara Bearings & Pistons Limited (Referred to in paragraph 1(f) under Report on Other Legal and Regulatory Requirements' of our report of evendate)
REPORT ON THE INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING UNDER CLAUSE (i)OFSUBSECTION 3 OF SECTION 143 OF THE COMPANIES ACT 2013 ("THE ACT")
We have audited the internal financial controls over financial reporting of BenaraBearings & Pistons Limited ("thelistedCompany") as of March 31 2019inconjunction with our audit of the standalone financial statements of the Company for theyear 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 (the"Guidance Note") issued by the Institute of Chartered Accountants of India.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 asrequired under the Companies Act 2013.
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 prescribed under Section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols. Those
Standards and the Guidance Note require that we comply with ethical requirementsandplan and perform the audit to obtain reasonable assurance about whether adequateinternal financial controls over financial reporting was established and maintained and ifsuch 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 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 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 designedtoprovide 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 and paymentsof the company are being made only in accordance with authorisations ofmanagement anddirectors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorised acquisition use or disposition of the company's assetsthat 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.
In our opinion to the best of our information and according to the explanations givento usthe 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 internalcontrolover financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note.
|In terms of our report of even date attached. |
|For Agrawal Jain & Gupta |
|F R N-013538C |
|CA Narayan Swami |
|M R N : |
|Date :30 May 2019 |
|Place :Agra |