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Bharat Gears Ltd.

BSE: 505688 Sector: Auto
NSE: BHARATGEAR ISIN Code: INE561C01019
BSE 00:00 | 20 Mar 166.95 1.75
(1.06%)
OPEN

167.50

HIGH

167.50

LOW

164.90

NSE 00:00 | 20 Mar 166.75 0.70
(0.42%)
OPEN

165.05

HIGH

167.85

LOW

164.25

OPEN 167.50
PREVIOUS CLOSE 165.20
VOLUME 116
52-Week high 220.00
52-Week low 142.10
P/E 8.99
Mkt Cap.(Rs cr) 136
Buy Price 164.00
Buy Qty 1.00
Sell Price 167.75
Sell Qty 36.00
OPEN 167.50
CLOSE 165.20
VOLUME 116
52-Week high 220.00
52-Week low 142.10
P/E 8.99
Mkt Cap.(Rs cr) 136
Buy Price 164.00
Buy Qty 1.00
Sell Price 167.75
Sell Qty 36.00

Bharat Gears Ltd. (BHARATGEAR) - Auditors Report

Company auditors report

TO THE MEMBERS OF BHARAT GEARS LIMITED

Report on the Ind AS Financial Statements

We have audited the accompanying Ind AS financial statements of BharatGears Limited ("the Company") which comprise the Balance Sheet as at 31March 2018 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of significant accounting policies and otherexplanatory information.

Management's Responsibility for the Ind AS Financial Statements

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended. This responsibility also includes maintenance of adequate accounting recordsin accordance 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 the design implementation and maintenance of adequateinternal financial control 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.

Auditor's Responsibility

Our responsibility is to express an opinion on these Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit of the Ind AS financial statements in accordance with the Standards on Auditingissued by the Institute of Chartered Accountants of India as specified under Section143(10) of the Act. Those Standards require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the financialstatements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence aboutthe amounts and disclosures in the financial statements. The procedures selected depend onthe auditor's judgment including the assessment of the risks of materialmisstatement of the Ind AS financial statements whether due to fraud or error. In makingthose risk assessments the auditor considers internal financial control relevant to theCompany's preparation of the Ind AS financial statements that give a true and fairview in order to design audit procedures that are appropriate in the circumstances. Anaudit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as wellas evaluating the overall presentation of the Ind AS financial statements. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to theexplanations given to us the Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2018 its profit including other comprehensive income its cash flows andthe changes in equity for the year ended on that date.

Other Matter

The comparative financial information of the Company for the year ended31 March 2017 and the transition date opening balance sheet as at 01 April 2016 includedin these Ind AS financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with the accounting principles generallyaccepted in India including the Companies (Accounting Standards) Rules 2006 (as amended)specified under section 133 of the Act read with the Companies (Accounts) Rules 2014audited by the predecessor auditor whose report for the year ended 31 March 2017 and 31March 2016 dated 23 May 2017 and 24 May 2016 respectively expressed an unmodifiedopinion on those financial statements as adjusted for the differences in the accountingprinciples adopted by the Company on transition to the Ind AS which have been audited byus.

Report on Other Legal and Regulatory Requirements

1. 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 of the Act we give in the "Annexure 1" a statement on thematters specified in paragraphs 3 and 4 of the Order.

2. As required by section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purpose of our audit;

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books;

(c) The Balance Sheet Statement of Profit and Loss including theStatement of Other Comprehensive Income the Cash Flow Statement and Statement of Changesin Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid Ind AS financial statements complywith the Accounting Standards specified under section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of written representations received from the directorsas on 31 March 2018 and taken on record by the Board of Directors none of the directorsis disqualified as on 31 March 2018 from being appointed as a director in terms ofsection 164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure 2" to this report;

(g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its Ind AS financial statements – Refer Note 29.1(i) to the IndAS financial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

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

For S R B C & CO LLP

Chartered Accountants ICAI Firm Registration Number: 324982E/E300003 perPramod Kumar Bapna

Partner Membership Number: 105497

Place: Mumbai Date: 30 May 2018

Annexure 1 referred to in paragraph 1 to Report on Other Legal andRegulatory Requirements of our report of even date

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

(b) All fixed assets have not been physically verified by themanagement during the year but there is a regular programme of verification which in ouropinion is reasonable having regard to the size of the Company and the nature of itsassets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us and therecords examined by us and based on the examination of the registered sale deeds providedto us we report that the title deeds comprising all the immovable properties of landand buildings are held in the name of the Company as at the balance sheet date. Immovableproperties of land and buildings whose title deeds have been pledged as security for loanstaken by the Company are held in the name of the Company based on the confirmationsdirectly received by us from lenders. In respect of immovable property of land that hasbeen taken on lease and building constructed thereon the lease agreement is in the nameof the Company where the Company is the lessee in the agreement. However in case offreehold land at one of the locations the Company observed that the area and namementioned in the records of the Government does not match with the Indenture ofConveyance for which the Company has initiated necessary action for correction.

(ii) The management has conducted physical verification of inventory atreasonable intervals during the year and no material discrepancies were noticed on suchphysical verification.

(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013. Accordingly the provisions of clause 3(iii) (a) (b) and(c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanationsgiven to us there are no loans investments guarantees and securities given in respectof which provisions of section 185 and 186 of the Companies Act 2013 are applicable andhence not commented upon.

(v) The Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by theCompany pursuant to the rules made by the Central Government for the maintenance of costrecords under section 148(1) of the Companies Act 2013 related to the manufacture ofcertain products of the Company and are of the opinion that prima facie the specifiedaccounts and records have been made and maintained. We have not however made a detailedexamination of the same.

(vii) (a) The Company is regular in depositing with appropriateauthorities undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of custom duty of excise value addedtax goods and services tax cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us noundisputed amounts payable in respect of provident fund employees' state insuranceincome-tax service tax sales-tax duty of custom duty of excise value added tax goodsand services tax cess and other statutory dues were outstanding at the year end for aperiod of more than six months from the date they became payable.

(c) According to the records of the Company the dues of income-taxsales-tax service tax duty of custom duty of excise value added tax and cess onaccount of any dispute are as follows:

Name of the statute Nature of the dues

Amount (`)

Period to which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Income Tax

730115

Assessment Year 2013-2014 Income Tax Appellate Tribunal

(viii) In our opinion and according to the information and explanationsgiven by the management the Company has not defaulted in repayment of loans or borrowingto a financial institution bank or government or dues to debenture holders.

(ix) In our opinion and according to the information and explanationsgiven by the management the Company has utilized the monies raised by way of term loansfor the purposes for which they were raised. The Company has not raised money by way ofinitial public offer further public offer or debt instruments.

(x) Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the financial statements and according to theinformation and explanations given by the management we report that no fraud by theCompany or no fraud on the Company by the officers and employees of the Company has beennoticed or reported during the year.

(xi) According to the information and explanations given by themanagement the managerial remuneration has been paid/provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theCompanies Act 2013.

(xii) In our opinion the Company is not a Nidhi company. Thereforethe provisions of clause 3(xii) of the Order are not applicable to the Company and hencenot commented upon.

(xiii) According to the information and explanations given by themanagement transactions with the related parties are in compliance with section 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in thenotes to the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given by themanagement the Company has complied with provisions of section 42 of the Companies Act2013 in respect of the preferential allotment of shares during the year. According to theinformation and explanations given by the management we report that the amounts raisedhave been used for the purposes for which the funds were raised.

(xv) According to the information and explanations given by themanagement the Company has not entered into any non-cash transactions with directors orpersons connected with him as referred to in section 192 of Companies Act 2013.

(xvi) According to the information and explanations given to us theprovisions of section 45-IA of the Reserve Bank of India Act 1934 are not applicable tothe Company.

For S R B C & CO LLP

Chartered Accountants ICAI Firm Registration Number: 324982E/E300003 perPramod Kumar Bapna

Partner Membership Number: 105497

Place: Mumbai Date: 30 May 2018

Annexure 2 to the Independent auditor's report of even date on theInd AS Financial Statements of Bharat Gears Limited

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of Bharat Gears Limited ("the Company") as of 31 March 2018 inconjunction with our audit of the Ind AS Financial Statements of the Company for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India. 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 the 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 Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting with reference to these financialstatements based on our audit. We conducted our audit in accordance with the Guidance Noteon Audit of Internal Financial Controls Over Financial Reporting (the "GuidanceNote") and the Standards on Auditing as specified under section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controlsboth issued by the Institute of Chartered Accountants of India. Those Standards and theGuidance Note require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether adequate internal financial controlsover financial reporting with reference to these financial statements was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls over financial reporting with reference tothese financial statements and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting with reference to these financialstatements assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlsover financial reporting with reference to these financial statements.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial control over financial reportingwith reference to these financial statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A Company's internal financial control over financialreporting with reference to these financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the Company's assets that could have a materialeffect on the financial statements.

Inherent Limitations of Internal Financial Controls Over FinancialReporting With Reference to these Financial Statements

Because of the inherent limitations of internal financial controls overfinancial reporting with reference to these financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these financial statements to future periods are subject to the risk that the internalfinancial control over financial reporting with reference to these financial statementsmay become inadequate because of changes in conditions or that the degree of compliancewith the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequateinternal financial controls over financial reporting with reference to these financialstatements and such internal financial controls over financial reporting with reference tothese financial statements were operating effectively as at 31 March 2018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For S R B C & CO LLP

Chartered Accountants ICAI Firm Registration Number: 324982E/E300003 perPramod Kumar Bapna

Partner Membership Number: 105497

Place: Mumbai Date: 30 May 2018