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Bharat Road Network Ltd.

BSE: 540700 Sector: Infrastructure
NSE: BRNL ISIN Code: INE727S01012
BSE 00:00 | 12 Aug 34.30 0.15
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32.10

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34.65

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32.10

NSE 00:00 | 12 Aug 34.20
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OPEN

34.65

HIGH

35.10

LOW

33.40

OPEN 32.10
PREVIOUS CLOSE 34.15
VOLUME 3505
52-Week high 59.45
52-Week low 24.00
P/E
Mkt Cap.(Rs cr) 288
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 32.10
CLOSE 34.15
VOLUME 3505
52-Week high 59.45
52-Week low 24.00
P/E
Mkt Cap.(Rs cr) 288
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bharat Road Network Ltd. (BRNL) - Auditors Report

Company auditors report

To

The Members of

Bharat Road Network Limited

Report on the Standalone Financial Statements

Qualified opinion

We have audited the accompanying standalone financial statements of Bharat Road NetworkLimited (‘the Company') which comprise the Balance Sheet as at March 31 2021 theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and notes tothe standalone financial statements including a summary of the significant accountingpolicies and other explanatory information (herein after referred to as "standalonefinancial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us except for the impact of the matter as described in the basis for qualifiedopinion paragraphthe aforesaid standalone financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended ("Ind AS") and other accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2021 the loss and totalcomprehensive loss changes in equity and its cash flows for the year ended on that date.

Basis for Qualified Opinion

We refer note - 14 (i) (a) of the standalone financial statements where the Companyhas not recognized interest on Rs7000 lakhs from July 01 2019 onwards which is not incompliance of Ind AS 1 ‘Presentation of Financial Statements' read with Ind AS 109‘Financial Instruments'. Due to this loss before tax of the Company for the yearended March 31 2021 has been understated by Rs892.50 lakhs and the current liabilities asat March 31 2021 has been understated by Rs1564.93 lakhs.

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act (SAs). Our responsibilities under those Standards are furtherdescribed in the

Auditor's Responsibilities for the Audit of the Standalone Financial Statements sectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our qualified opinion.

Key Audit Matters

Key audit matters (KAM) are those matters that in our professional judgment were ofmost significance in our audit of the standalone financial statements of the currentperiod. These matters were addressed in the context of our audit of thestandalonefinancial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters.

Following are the Key Audit Matters (KAM) –

Sl. Key Audit Matter Auditor's Response
1 Investments in Optionally Convertible Debentures of subsidiaries and associates and Debt instruments has been considered as financial assets and valued at Fair Value Through Profit and Loss. Refer Note no - 4 and 5(i)of the standalone financial statement. We have reviewed the projections and related information and explanations and additionally considered the valuation report of a registered valuer appointed by the Company.

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

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Director's Report includingannexures to Director's Reportbut does not include the standalone financial statementsand our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the 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. Based on therecords information and explanation provided we have nothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and accounting principles generally accepted in India.

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 standalone financial statements that give a true and fair view and are free frommaterial misstatements whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related 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.

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

Auditor's Responsibility for the Audit of the Standalone Financial Statements

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 standalone financial 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• 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 system in place and the operatingeffectiveness of such 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 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonable knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative and qualitative factors in (i) planning the scope of our audit workand in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the standalone 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.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of Section 143(11) of the Act andaccording to the information and explanations given to us and also on the basis of suchchecks as we considered appropriate we give in the "Annexure A" a statement onthe matters 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 explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

b) Except for the possible effects of the matters described in the basis for qualifiedopinion paragraph in our opinion proper books of accounts as required by law have beenkept by the Company so far as it appears from our examination of those books;

c) The Balance Sheet the Statement of Profit and Loss (including Other Comprehensiveincome) Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account;

d) In our opinion except for the effects of the matters described in the basis forqualified opinion paragraph the aforesaid standalone financial statements comply with theIndian Accounting Standards (Ind AS) specified under Section 133 of the Act read withrelevant Rules issued thereunder;

e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164(2) of theAct;

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

As per the information and explanation given to us and on the basis of our examinationof the records the managerial remuneration has been paid or provided in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Act.

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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. To the best of our information and according to the explanation given to us there isno pending litigations (other than those referred in note 14 (i) (a) of the standalonefinancial statements) having material impact on the financial position of the Company.

ii. The Company does not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses;

iii. There was no amount required to be transferred to the Investor Education andProtection Fund by the Company.

For S. S. Kothari Mehta & Company
Chartered Accountants
Firm Registration No. 000756N
Rana Sen
Partner
Membership No. 066759
Place : Kolkata
Date : June 29 2021
UDIN : 21066759AAAADK1031

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BHARAT ROAD NETWORKLIMITED

Report on the matters specified in paragraph 3 of the Companies (Auditor's Report)Order 2016 ("the Order") issued by the Central Government of India in terms ofsection 143 (11) of the Companies Act 2013 ("the Act") as referred to inparagraph 1 of ‘Report on Other Legal and Regulatory Requirements' section.

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

(b) These fixed assets have been physically verified by the management according to aphased programme designed to cover all the items during the year which in our opinion isreasonable having regard to the size of the company and nature of its assets. Inaccordance with this programme fixed assets were physically verified by the managementduring the reporting period and no discrepancies were noticed on such verification;

(c) As the Company has no immovable property provisions of clause (i) (c) of para 3 ofthe said order is not applicable to the Company.

(ii) As the Company has no inventory provisions of clause (ii) of para 3 of the saidorder is not applicable to the company.

(iii) The Company has granted unsecured loan/advances to companies covered in registermaintained under section 189 of the Act. With respect to the said loan/advances we haveto state that; a) In our opinion the terms and conditions of the grant of suchloan/advances are not prejudicial to the interest of the company. b) The schedule ofrepayment of principal and interest of these unsecured loans/advances are stipulated.There has been no irregularities in this respect. c) The total amount overdue for morethan 90 days is nil.

(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 in respect ofgrant of loans making investments and providing guarantees and securities as applicable.

(v) The Company has not accepted any deposits and hence the directives issued by theReserve Bank of India and the provisions of sections 73 to 76 or any other relevantprovisions of the Act and the rules framed hereunder are not applicable.

(vi) The provisions regarding maintenance of cost records under section 148 (1) of theAct are not applicable to the Company.

(vii) (a) According to information and explanations given to us and the records of thecompany examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax duty of customs duty of excise value added taxgoods and service tax cess and any other statutory dues except tax deducted at source oninterest on certain loans taken from financial institution to the appropriate authorities.The Company has not deducted / paid tax deducted at source (TDS) amounting to Rs. 66.75lakhs on interest on loan taken from financial institution which is due for more than sixmonths from the date they became payable as at March 31 2021.

(b) According to information and explanations given to us and the records of thecompany examined by us there are no dues outstanding in respect of income tax sales taxservice tax duty of customs duty of excise goods and service tax and cess as at March31 2021 on account of disputes.

(viii) The Company has defaulted in payment of interest to one of the financialinstitution(NBFC). Interest accrued but not paid for the period July 01 2018 to June 302019 amounts to Rs 870.00 lakhs.

Further company has not provided and paid interest from July 01 2019 to March 31 2021amounting to Rs. 1564.93 lakhs (Refer Note 14(i) (a) of the standalone financialstatements).

(ix) No money has been raised by way of initial public offer or further public offer(including debt instruments).Further the term loans raised by the Company during the yearwere applied for the purpose for which they were obtained.

(x) To the best of our knowledge and according to information and explanations given tous no fraud by the Company or no fraud on the Company by its officers or employees hasbeen noticed or reported during the year.

(xi) The managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct.

(xii) The Company is not a Nidhi Company hence clause (xii) of the Order is notapplicable to the Company.

(xiii) According to the information and explanation given to us and on the basis ofour examination of the records the company has transacted with the related parties whichare in compliance with sections 177 and 188 of the Act and the details have been disclosedin the standalone financial statements – Refer Note no - 28.1 to the standalonefinancial statements.

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

(xv) The Company has not entered into non-cash transactions with directors or personsconnected with the directors and therefore provisions of section 192 of the Act is notapplicable.

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

For S. S. Kothari Mehta & Company
Chartered Accountants
Firm Registration No. 000756N
Rana Sen
Partner
Membership No. 066759
Place : Kolkata
Date : June 29 2021
UDIN : 21066759AAAADK1031

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT TO THE MEMBERS OF BHARAT ROAD NETWORKLIMITED

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' section

We have audited the internal financial controls over financial reporting of Bharat RoadNetwork Limited ("the Company") as of March 31 2021 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

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". These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit.

We conducted our audit in accordance with the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting (the "Guidance Note") and theStandards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) ofthe Act to the extent applicable to an audit of internal financial controls bothapplicable to an audit of Internal Financial Controls and both issued by the Institute ofChartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone 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 designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A Company's internal financial control overfinancial reporting includes those policies and procedures that:

a) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

b) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of Management and directors of the Company; and

c) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the standalone financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were generally operating effectively as at March 31 2021 basedon "the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India".

For S. S. Kothari Mehta & Company
Chartered Accountants
Firm Registration No. 000756N
Rana Sen
Partner
Membership No. 066759
Place : Kolkata
Date : June 29 2021
UDIN : 21066759AAAADK1031

Statement on Impact of Audit Qualifications (for audit report with modified opinion)submitted along-with Annual Audited Financial Results - (Standalone)

Statement on Impact of Audit Qualifications for the Financial Year ended March 31 2021[See Regulation 33 / 52 of the SEBI (LODR) (Amendment) Regulations 2016]

(Rsin Lakhs)
I Sl. Particulars No. Audited Figures (as reported before adjusting for qualifications) Adjusted Figures (audited figures after adjusting for qualifications)
1 Turnover / Total Income 3098.56 3098.56
2 Total Expenditure 6819.94 7712.44
3 Profit/(Loss) before tax (3721.38) (4613.88)
4 Earnings per Share (3.68) (4.48)
5 Total Assets 150455.84 150857.75
6 Total Liabilities 150455.84 150857.75
7 Net worth 114531.76 113368.74
8 Any other financials item(s) (as felt appropriate by the Management)

II Audit Qualification (each audit qualification separately):

a. Details of Audit Qualification:The Company has not recognized interest on Rs. 7000lakhs from July 01 2019 onwards which is not in compliance of Ind AS 1 ‘Presentationof Financial Statements' read with Ind AS 109 ‘Financial Instruments'. Due to thisloss before tax of the company for the quarter ended March 31 2021 has been understatedby Rs. 220.07 lakhs and loss before tax of the Company for the year ended March 31 2021has been understated by Rs. 892.50 lakhs and the current liabilities as at March 31 2021has been understated by Rs. 1564.93 lakhs.

b. Type of Audit Qualification : Qualified Opinion

c. Frequency of qualification : As at 31st March ‘2020 and 31st March'2021

d. For Audit Qualification(s) where the impact is quantified by the auditorManagement's Views:The Company had received an amount of Rs.7000 lakhs from IL&FSGroup - IL&FS Financial Services Ltd. (IL & FS) in the financial year 2016-17. TheCompany also has a receivable of Rs 11419 lakhs from IL&FS Group - IL & FSTransportation Networks Limited (ITNL) hence the Company has initiated appropriatemeasures for set off of this payable and recovery of the balance amount. As per NCLATorder these companies have been classified under IL&FS Group. The Company as suchhas put on hold the interest and Principal payment since September 30 2018. The Companyhas not provided interest from July 01 2019 onwards pending the settlement of dispute.An application has been filed against the Company by IL & FS before the Hon'bleNational Company Law Tribunal Kolkata claiming their dues which is yet not admitted.

e. For Audit Qualification(s) where the impact is not quantified by the auditor : Sameis already quantified.

(i) Management's estimation on the impact of audit qualification : Not Applicable (ii)If management is unable to estimate the impact reasons for the same : Not Applicable(iii) Auditors' Comments on (i) or (ii) above : Not Applicable

For S. S. Kothari Mehta & Company For and On behalf of the Board of Directors
Chartered Accountants
Firm Registration No.000756N
Rana Sen Brahm Dutt Bajrang K Choudhary
Partner Chairman Audit Committee Managing Director
Membership No. 066759 DIN : 05308908 DIN : 00441872
Place : Kolkata Arindam Bhowmick
Date : June 29 2021 Chief Financial Officer

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