TO THE MEMBERS OF BHARAT RASAYAN LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited accompanying financial statements of BHARAT RASAYAN LIMITED ("theCompany") which comprise the Balance Sheet as at March 31 2019 the Statement ofProfit and Loss (including Other Comprehensive Income) statement of changes in equity andstatement of cash flows for the year then ended and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under Section133 of the Ac t read with the Companies (Indian Accounting Standards) Rules 2015 asamended (Ind AS) and other accounting principles generally accepted in India of the stateof affairs of the Company as at March 31 2019 and profit total comprehensive incomechanges in equity and its cash flows for the year ended on that date.
Basis for Opinion
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 Auditors' Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the 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.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements for the financial year ended March31 2019. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report:
|KEY AUDIT MATTERS ||AUDITORS' RESPONSES |
|REVENUE RECOGNITION ||PRINCIPAL AUDIT PROCEDURES PERFORMED |
|Estimation of provision for sales returns discounts rebates schemes and incentives on sales impacting revenue from sale of products ||We obtained the understanding of the Company's process policies and procedures in making the estimates in the given areas of sales return discount rebates scheme incentives and performed the following procedures: |
|Revenue from sale of products is presented net of returns discounts rebates schemes and incentives in the consolidated Ind AS financial statement ||We evaluated and tested the design and operating effectiveness of controls related to these estimates. We assessed the assumptions used by the management in determining the amount of provisions by studying the market conditions and obtaining an understanding of key contractual agreements. |
|The estimates associated with sales returns discounts rebates schemes and incentives on sale of products have been identified as a key audit matter as it is having a significant impact on the recognized revenue and the management is required to make certain judgements in respect of revenue recognition and level of expected rebates/discounts and returns which are deducted in arriving at revenue. Management is required to consider historical experience specific contractual terms and future expectation of revenue to determine these estimates. Also factors such as current and expected operating environment action of third parties and weather conditions have a significant impact on management's judgement. || |
| ||We considered the accuracy of management's estimates in previous years by comparing historical accrued liabilities with their subsequent settlement ratio analysis of sales return discounts rebates schemes and incentive as a percentage of sale of last few years. |
| ||We verified if any credit notes were issued and/ or their adjustment after the balance sheet date and their impact on financial statements. |
Information Other than the Financial Statements and Auditors' Report Thereon
The Company's Board of Directors is responsible for the other information. Theother information obtained at the date of this Auditors' Report i.e. Board's ReportCorporate Governance Report and Management Discussion & Analysis Report but does notinclude the financial statements and our Auditors' Report thereon.
Our opinion on the financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that we have not found anymaterial misstatement of this other information.
Responsibility of Management for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationof these financial statements that give a true and fair view of the financial positionfinancial performance (including other comprehensive income) changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including 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 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 standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements 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. Board ofDirectors are also responsible for overseeing the Company's financial reporting process.
Auditors' Responsibility for the Audit of the Standalone Ind AS 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 Auditors' Report that includes our opinion. Reasonable assurance is a highlevel of assurance. Misstatements can arise from fraud or error and are consideredmaterial if individually or in the aggregate they could reasonably be expected toinfluence the economic decisions of users taken on the basis of these standalone Ind ASfinancial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained we are of the opinion that theCompany is able to continue as a going concern. Our conclusions are based on the auditevidence obtained up to the date of our Auditors' Report.
Evaluate the overall presentation structure and content of the financialincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
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 ofthe Companies Act 2013 we give in the Annexure A a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent 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 our opinion proper books accounts 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 including Other ComprehensiveIncome the Statement of Cash Flows and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account;
(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Ind AS specified under Section 133 of the Act;
(e) On the basis of the written representations received from the Directors as on 31stMarch 2019 taken on record by the Board of Directors none of the Directors isdisqualified as on 31st March 2019 from being appointed as Director in terms of Section164(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 B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting;
(g) With respect to the other matters to be included in the Auditors' Report inaccordance with the requirements of Section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its Directors during the year is in accordance withthe provisions of Section 197 of the Act; and
(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) The Company has no major pending litigations having an adverse impact on itsfinancial position in its standalone Ind AS financial statements.
(II) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses; and
(III) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
ANNEXURE-A TO THE INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS OF BHARATRASAYAN LIMITED
REFERRED TO IN PARAGRAPH 1 UNDER THE HEADING "REPORT ON OTHER LEGAL ANDREGULATORY REQUIREMENTS" OF OUR REPORT OF EVEN DATE:
(I) a. The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets;
b. The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this programme certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.
c. According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties areheld in the name of the company.
As informed to us the fixed assets have been physically verified by the Management atreasonable intervals and the discrepancies noticed during such physical verification werenot material and the same have been properly dealt with in the books of accounts.
(II) As explained to us the inventories were physically verified by the Management atreasonable intervals and the discrepancies noticed during such physical verification werenot material and the same have been properly dealt with in the books of accounts.
(III) The Company has not granted any loans secured or unsecured to companies firmsor other parties covered in the register maintained under Section 189 of the Act.Accordingly paragraph 3(iii) of the order is not applicable.
(IV) According to the information explanations and representations provided by theManagement and based upon audit procedures performed we are of the opinion that inrespect of loans and investments the Company has complied with the provisions of theSection 185 and 186 of the Companies Act 2013.The Company has not provided any guaranteesor security as specified under Section 185 and 186 of the Companies Act 2013.
(V) In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits and hence the directives issued by Reserve Bank ofIndia and the provisions of sections 73 to 76 or any other relevant provisions of the Actand the rules framed there under are not applicable to the company. Accordingly theprovisions of clause 3 (v) of the Order are not applicable to the Company.
(VI) The Central Government has specified maintenance of cost records under sub-section(1) of Section 148 of the Act and we are of the opinion that prima facie such accountsand records are made and maintained. We have not however made a detailed examination ofthe records with a view to determine whether they are accurate or complete.
(VII) (a) According to the information and explanations given to us and on the basis ofexamination of the records of the Company the Company is generally regular in depositingwith appropriate authorities undisputed statutory dues including Provident FundEmployees' State Insurance Income-tax GST Duty of Customs Duty of Excise Cess and anyOther Material Statutory Dues applicable to it to the Appropriate Authorities.
(b) According to the information and explanations given to us no undisputed amountpayable in respect of Provident Fund Employees' State Insurance Income-tax Sales taxService tax GST Duty of Customs Duty of Excise Value Added Tax or Cess and any OtherMaterial Statutory Dues were outstanding at the year-end for a period of more than sixmonths from the date they became payable as at March 31 2019.
(c) According to the records of the Company the dues of Income Tax Sales Tax ServiceTax GST Duty of Custom Duty of Excise Value Added Tax and Cess which have not beendeposited as on March 31 2019 on account of any dispute are as follows:
|Name of the Statute ||Nature of Dues ||Amount (in Rs) ||Amount Deposited ||Period to which Amount Relates ||Forum where the Dispute is Pending |
| || || ||(in Rs) || || |
|The Income ||Income Tax ||8650/- ||- ||2008-09 ||Assessing Officer Delhi |
|Tax Act || ||181192/- ||- ||2009-10 ||Assessing Officer Delhi |
|1961 || ||1870090/- ||- ||2011-12 ||Assessing Officer Delhi |
| || ||1543920/- ||- ||2016-17 ||Assessing Officer Delhi |
(VIII) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to its bankers/ Financial Institutions.The Company did not have any outstanding debentures during the year;
(IX) According to the information and explanations given to us the Company did notraise any money by way of initial public offer or further public offer (Including debtinstruments). As informed to us there is neither any term loan outstanding nor any termloan has been taken during the year.
(X) According to the information and explanations given to us no fraud by the Companyor any fraud on the Company by its officers or employees has been noticed or reportedduring the year.
(XI) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Companies Act 2013.
(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 to the Company and hence not commented upon.
(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 Standalone Ind AS financial statements as requiredunder Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specified underSection 133 of the Act.
(XIV)According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares of full or partly convertible debentures duringthe year and hence reporting requirement under clause 3(XIV) not applicable to theCompany and not commented upon.
(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 any non-cashtransactions with Directors or persons connected with them. Accordingly provisions ofClause 3(XV) of the Orders are not applicable.
(XVI) As informed to us the Company is not required to be registered under Section45-IA of the Reserve Bank of India Act 1934. Hence reporting requirement under clause3(XVI) not applicable to the Company.
ANNEXURE-B TO THE INDEPENDENT AUDITORS' REPORT ON FINANCIAL STATEMENTS OF BHARATRASAYAN LIMITED
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (i) OF SUB-SECTION 3 OF SECTION143 OF THE COMPANIES ACT 2013 ("THE ACT") AS REFERRED TO IN PARAGRAPH 2(f) OF'REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS'
We have audited the Internal Financial Controls over financial reporting of BHARATRASAYAN LIMITED ("the Company") as of March 31 2019 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company for the year ended onthat date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining InternalFinancial Controls based on the Internal Control Over Financial Reporting criteriaestablished by the Company considering the essential components of Internal Control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India ("ICAI'). Theseresponsibilities included 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 accuracy and completeness of theaccounting records and the timely preparation of reliable 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 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 Control and essential components stated in Guidance Note issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.
Our Audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial control 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 controls based on the assessed risk. Theprocedures selected depend on the auditors' judgment including the assessment of the riskof material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidences 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 Controls 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 Controls Over FinancialReporting includes those policies and procedures that (1) pertain to the maintenance ofrecords 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 andexpenditure of the Company are being made only in accordance with authorizations 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 on the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlsover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such Internal Financial ControlsOver Financial Reporting were operating effectively as at March 31 2019 based on theInternal Financial Controls Over Financial Reporting criteria established by the Companyconsidering the essential components of Internal Controls stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
| ||For R.D. Garg & CO. |
| ||CHARTERED ACCOUNTANTS |
| ||Sd/- |
| ||R.D. Garg |
|NEW DELHI ||Proprietor |
|MAY 30 2019 ||Membership No 007526 |
| ||(Firm Registration No 001776N) |