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Bhagyanagar India Ltd.

BSE: 512296 Sector: Metals & Mining
NSE: BHAGYANGR ISIN Code: INE458B01036
BSE 00:00 | 04 Jun 14.40 -0.89
(-5.82%)
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15.03

HIGH

15.40

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14.30

NSE 00:00 | 04 Jun 14.45 -0.45
(-3.02%)
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15.10

HIGH

15.55

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14.40

OPEN 15.03
PREVIOUS CLOSE 15.29
VOLUME 2967
52-Week high 28.95
52-Week low 10.80
P/E 14.12
Mkt Cap.(Rs cr) 46
Buy Price 14.40
Buy Qty 1850.00
Sell Price 15.55
Sell Qty 300.00
OPEN 15.03
CLOSE 15.29
VOLUME 2967
52-Week high 28.95
52-Week low 10.80
P/E 14.12
Mkt Cap.(Rs cr) 46
Buy Price 14.40
Buy Qty 1850.00
Sell Price 15.55
Sell Qty 300.00

Bhagyanagar India Ltd. (BHAGYANGR) - Auditors Report

Company auditors report

To the Members of

M/s BHAGYANAGAR INDIA LIMITED

Report on the Audit of Standalone Ind AS Financial Statements

Opinion

1. We have audited the accompanying Ind AS Standalone financial statements ofBHAGYANAGAR INDIA LIMITED ("the Company") which comprise the Balance Sheetas at 31st March 2019 the Statement of Profit statement of Other Comprehensive Incomethe Cash Flow Statement and the statement of change in Equity for the year then ended andnotes to the standalone financial statements including the summary of the significantaccounting policies and other explanatory information.

2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financialstatements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2019 and total comprehensive income (comprising of profit andother comprehensive income) its cash flows and changes in equity for the year ended onthat date.

Basis for Opinion

3. We conducted our audit in accordance with the Standards on Auditing(SAs)specifiedunder section 143(10) of the Act.

Our responsibility under those standards are further described in the ‘Auditor'sResponsibility for the Audit of the Financial Statements' section of our report. We areindependent of the company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our Audit of The Financial Statements under the provision of the Act and the Rulesthere under and we havefulfilledour other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriateto . provide a basisfor our opinion

Key Audit Matters

4. Key audit matters are those matters that in our professional judgment were of mostsignificancein our Audit of Financial Statements of the current period these matters wereaddressed in the context of our Audit of the Standalone Financial Statements as a wholeand in forming our opinion thereon and we do not provide a separate opinion on thesematters. For each matter below our description of how our audit addressed the matter isprovided in that context.

Key audit matters How our audit addressed the key audit matter
Revenue Recognition
(Refer Note no.4(a) to standalone financial Statements) Our audit procedures included the following:
Revenue from contracts with customers is recognized when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Company expects to be entitled in exchange for those goods or services. The Company has generally concluded that as principal it typically controls the goods or services before transferring them to the customer. Assessed the Company's revenue recognition policy prepared as per Ind AS 115 ‘Revenue from contracts with customers'.
Assessed the design and tested the operating effectiveness of internal controls related to revenue recognition discounts and rebates.
The variety of terms that define when control are transferred to the customer as well as the high value of the transactions give rise to the risk that revenue is not recognized in the correct period. Performed sample tests of individual sales transaction and traced to sales invoices sales orders and other related documents. Further in respect of the samples checked that the revenue has been recognized as per the shipping terms.
Revenue is measured net of net of returns and allowances cash discounts trade discounts and volume rebates (collectively ‘discount and rebates'). There is a risk that these discount and rebates are incorrectly recorded as it also requires a certain degree of estimation resulting in understatement of the associated expenses and accrual. To test cut off selected sample of sales transactions made pre- and post - year end agreeing the period of revenue recognition to third party support such as transporter invoice and customer confirmation of receipt of goods.
Revenue is also an important element of how the Company measures its performance. The Company focuses on revenue as a key performance measure which could create an incentive for revenue to be recognized before the risk and rewards have been transferred. Tested the provision calculations related to management incentives discounts and rebates by agreeing a sample of amounts recognized to underlying arrangements with customers and other supporting documents.
risk associated with Accordingly due to the significant revenue recognition in accordance with terms of Ind AS 115 ‘Revenue from contracts with customers' it was determined to be a key audit matter in our audit of the standalone Ind AS financial statements.
Performed monthly analytical procedures of revenue by streams to identify any unusual trends.
Obtained confirmations from customers on sample basis to support existence assertion of trade receivables and assessed the relevant disclosures made in the financial statements; to ensure revenue from contracts with customers are in accordance with the requirements of relevant accounting standards.

We have determined that there are no other key audit matters to communicate in ourreport.

Other Information

5. The company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the annual report but does include theStandalone financial statements and our auditor's report thereon.

6. Our opinion on the Standalone financial statements does not cover the otherinformation and we do not express any of assurance conclusion thereon.

7. In connection with our audit of the standalone financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtain in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of theother information we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of management and those charged with the governance for the financialstatements.

8. 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 Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards

(Ind AS) specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 and the companies (Indian Accounting Standards) Rule 2015 asamended. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of 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 Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

9. In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelating 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 foroverseeing the company's financial reporting process.

Auditors Responsibilities for the audit of Financial Statements.

10. 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. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these financial statements.

11. 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 financial statementswhether due to error design and perform audit procedures responsive to those risks andobtain audit evidence that is sufficient and appropriate to provide a basis for ouropinion.

Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls with financial statements system in placeand the operating effectiveness 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 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.

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

13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

15. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure B" statement on the mattersSpecifiedinparagraphs 3 and 4 of the Order.

16. As required by section 143(3) of the Act we further report that: a. we have soughtand obtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purpose of our audit. b. in our opinion proper books ofaccount as required by law have been kept by the Company so far as appears from ourexamination of those books; c. The Balance Sheet Statement of Profit and Loss includingthe Statement of Other Comprehensive Income the Cash Flow Statement and Statement ofChanges in Equity dealt with by this Report are in agreement with the books of account; d.In our opinion the aforesaid Ind AS financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 Companies (Indian Accounting

Standards) Rules 2015 as amended; e. on the basis of written representations receivedfrom the directors as on March 31 2019 and taken on record by the Board of Directorsnone of the directors is disqualified as on March 31 2019 from being appointed as adirector in terms of Section 164(2) of the Act; f. with respect to the adequacy of theinternal financial controls over financial reporting of the Company and the operatingeffectiveness of such controls refer to our separate report in "Annexure A";and 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 which would impact itsfinancial position. Refer note No. 34(i) to the financial statement.

II. The Company has made provision as required under the applicable law or accountingstandard for material foreseeable losses if any on long-term contracts includingderivative contracts; III. During the year the Company has transfer the required amount tothe Investor Education and Protection Fund and there is no delay in transferring of suchsum.

For Luharuka & Associates
Chartered Accountants
Firm Reg No:- 01882S
Place: Secunderabad Rameshchand Jain
Date: 23rd May 2019 (Partner) Membership No.023019

Annexure A - to the Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

1. We have audited the internal financial controls with reference to StandaloneFinancial Statements of BHAGYANAGAR INDIA LIMITED ("the Company") as of31 March 2019 in conjunction with our audit of the Standalone financial statements of theCompany for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. 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 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

3. 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 aboutwhetheradequateinternalfinancialcontrols over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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 financial statements whether due to fraud or error.

5. 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 systemwith reference to financial statements.

Meaning of Internal Financial Controls over Financial Reporting

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding financialreporting the and thepreparation reliability financialstatements for external purposes in of of accordance withgenerally accepted accounting principles. Acompany'sinternalfinancialcontrol overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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

7. 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

8. In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial with reference toreporting Standalone suchfinancial internal financial statements were operating effectively as at 31 March2019 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For Luharuka & Associates
Chartered Accountants
Firm Reg No:- 01882S
Rameshchand Jain
Place: Secunderabad (Partner)
Date: 23rd May 2019 Membership No.023019

‘Annexure- B' referred to in Independent Auditors' Report to the members of theCompany on the financial statements for the year ended 31st March 2019 we report that

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets ; (b) As explained to us fixedassetshave been physically verified by the management at reasonable intervals. According to theinformation and explanation given us no material discrepancies were noticed on suchverification; (c) According to the information and explanations given to us and on thebasis of our examination of the records of the company the title deeds of immovableproperty held in the name of company. (ii) (a) The inventories have been physicallyverified at reasonable intervals by the management.

(b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness. (iii) The company had granted loan to one of its wholly owned subsidiary companyas covered in the register maintained under section 189 of the Companies Act 2013.

(a) In our opinion and according to the information and explanations given to us theterms and conditions of the grant for such Loan are not prejudicial to the Company'sinterest.

(b) In respect of the aforesaid loans the schedule of repayment of principle andinterest has been stipulated repayment of principal and interest has been regular as perthe stipulation.

(c) There are no overdue amounts in respect of the loan granted to a body corporatelisted in the register maintained under section 189 of the Act.

(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 the loans and investments made.

(v) The Company has not accepted any deposits from the public.

(vi) We have broadly reviewed the cost records maintained by the company prescribed bythe Central Government of India under section 148(1) of the Act and are of the opinionthat prima facie the prescribed accounts and records have been maintained. We have however not made a detailed examination of the cost records with a view to determinewhether they are accurate or complete .

(vii) (a) According to the information and explanations given to us and based on therecords of the company examined by us the company is generally regular in depositing theundisputed statutory dues including Provident Fund Employees' State InsuranceIncome-tax Sales-tax Wealth Tax Service Tax Custom Duty Excise Duty and otherstatutory dues as applicable with the appropriate authorities in India;

(b) According to the information and explanations given to us and based on the recordsof the company examined by us no undisputed amounts payable in respect of Provident FundIncome Tax Sales Tax Wealth Tax and other material statutory dues for a period of morethan six months from the date they become payable except the following disputed statutoryliabilities have not been deposited in view of pending Appeals.

Name of Statue Nature of dues Amount involved in dispute & not paid Period to which it relates Forum where dispute is pending
Central Excise Act 1944 Excise Duty 2560007/- 2010-11 Appeal is pending against CESTAT
2000000/- 2011-12 Appeal is pending against CESTAT

(viii) According to the records of the company examined by us and as per theinformation and explanations given to us the company has not defaulted in repayment ofloans from any financial institution or banks and has not issued debenture. (ix) TheCompany did not raise any money by way of initial public offer or further public offer(including debt instruments) and term loans during the year. Accordingly paragraph 3 (ix)of the Order is not applicable. (x) According to the information and explanations given tous no material fraud by the Company or on the Company by its officers or employees hasbeen noticed or reported during the course of our audit.

(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has provided for managerialremuneration in accordance with the provisions of section 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 applicableaccounting standards. (xiv) According to the information and explanations give to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the 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 Luharuka & Associates
Chartered Accountants
Firm Reg No:- 01882S
Rameshchand Jain
Place: Secunderabad (Partner)
Date: 23rd May 2019 Membership No.023019