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Bharat Road Network Ltd.

BSE: 540700 Sector: Infrastructure
NSE: BRNL ISIN Code: INE727S01012
BSE 11:08 | 22 Jun 34.75 1.70
(5.14%)
OPEN

34.10

HIGH

35.00

LOW

33.50

NSE 10:59 | 22 Jun 34.70 1.75
(5.31%)
OPEN

33.60

HIGH

35.00

LOW

33.00

OPEN 34.10
PREVIOUS CLOSE 33.05
VOLUME 13359
52-Week high 40.75
52-Week low 26.35
P/E
Mkt Cap.(Rs cr) 292
Buy Price 34.65
Buy Qty 154.00
Sell Price 34.85
Sell Qty 335.00
OPEN 34.10
CLOSE 33.05
VOLUME 13359
52-Week high 40.75
52-Week low 26.35
P/E
Mkt Cap.(Rs cr) 292
Buy Price 34.65
Buy Qty 154.00
Sell Price 34.85
Sell Qty 335.00

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

Wehaveaudited theaccompanying standalonefinancial statements of Bharat Road NetworkLimited ('the Company') which comprise the Balance Sheet as at March 312020 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 summaryof thesignificantaccountingpoliciesand other explanatory information (herein after referred to as "standalonefinancial statements").

In our opinion and to the best ofour information and according to the explanationsgiven to us except for the impact of the matter as described in the basis for qualifiedopinion paragraph the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the mannersorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015asamended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020the profit and total comprehensive income changes in equity and its cash flows for theyear ended on that date.

Basis for Qualified Opinion

We refer note-14 (i) (a) of the standalone financial statements where the Companyhasnot recognized interest on Rs. 7000 lakhs from July 01 2019 onwards which isnot in compliance of lnd AS 1 'Presentation of Financial Statements 'read with lnd AS 109'Financial lnstruments'. Due to this profit before tax of the Company for the year endedMarch 31 2020 has been overstated by Rs. 672.43 lakhs and the current liabilitiesas at March 31 2020 has been understated by Rs. 672.43 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 FinancialStatements section of our report. We are independent of the Company in accordancewith the Codeof Ethics issued by the Institute of Chartered Accountants of India(ICAI) together with the ethical requirements that are relevant to our audit of thestandalone financial statements under the provisions of the Act and the Rules madethereunder 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 qualified opinion.

Emphasis of Matter

We draw attention to the following:

i. Note no 27.5 of the standalone financial statements regarding investments in SpecialPurpose Vehicles formed as per concession agreement and guideline of respective governmentauthority and treatment of such investments as Qualifying asset and capitalization ofdirectly attributable borrowing costs incurred in respect thereof.

ii. Note no 9 of the standalone financial statements regarding a receivable of theCompany by way of assignment for which Company has initiated appropriate recovery process.

Our opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters (KAM) are those matters that in our professional judgment wereofmost significance in our audit of the standalone financial statements of the currentperiod. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

Following are the Key Audit Matters (KAM) -

Sl. No. 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-4and5(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 bythe 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 theother informationand wedo not express anyform ofassurance conclusion thereon.

In connection with ourauditof thestandalonefinancial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the standalone financial statements or our knowledge obtainedduring thecourse ofour auditorotherwiseappears to be materially misstated.

If based on the work we have performed we conclude that there is a material misstatement of this other information we are required to report that fact. Based on therecords information and explanation provided we have nothing to report inthis 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 viewof thefinancial positionfinancial 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 ofthestandalonefinancial 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'sfinancialreporting 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. Mis statements 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 ofan 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 over ride ofinternal control.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in thecircumstances. Undersection143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in placeand 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 useof 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on theaudit evidence obtained up to the date ofourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the over all presentationstructure and contentof 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 ofourauditworkandin evaluating theresultsofourwork;and (ii) to evaluate the effect of any identifiedmisstatements 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 thatwe havecomplied withrelevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

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 ofsuch 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 havebeen kept 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 Changesin Equity dealtwith bythisReportare in agreement with the books ofaccount;

d) In our opinion except for the effects of the matters described in the basis forqualified opinion paragraph theaforesaid standalone financial statements complywith the Indian Accounting Standards (Ind AS) specified underSection 133 of the Act readwith relevant Rules issued thereunder;

e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 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 inaccordancewith the requirements ofsection 197(16) of the Act as amended:

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

h) With respect to the other mattersto 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 ofour 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 already recognised in the accounts) havingmaterial impact on the financial position of the Company. (Refer Note- 27.7 of thestandalone financial statements)

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 bytheCompany.

For S. S. Kothari Mehta & Company
Chartered Accountants
Firm Registration No. 000756N
Neeraj Bansal
Partner
Membership No. 095960
Place: New Delhi
Date:July 24 2020
UDIN: 20095960AAAAHL4222

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

To

The Members of

Bharat Road Network Limited

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 termsofsection 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 coverall the itemsduring theyearwhich in ouropinion isreasonable having regard tothesizeof thecompanyand nature of its assets. In accordancewith this programme fixed assets were physically verified by the management during thereporting 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 saidorderisnotapplicableto theCompany.

(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 such loan/advances are notprejudicial to the interest of the company.

b) The schedule of repayment of principal and interest of these unsecuredloans/advances are stipulated. There has been no irregularities in this respect.

c) The total amount overdue for more than 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 185and 186 of the Act in respectofgrant of loans making investments and providing guarantees and securities asapplicable.

(v) The Company has not accepted any deposits and hence the directives issued bytheReserve 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 recordsofthecompanyexamined byus in ouropinion the Company is generally regular in depositingundisputed statutory dues including provident fund employees'state insurance income-taxsales-tax service tax duty of customs dutyofexcisevalueadded tax goodsandservicetaxcess and any other statutory dues except tax deducted at sourceon interest oncertain loans taken from financial institutions to the appropriate authorities.The Companyhas not deducted/paid tax deducted at source (TDS) amounting to Rs.66.75 lakhs on Intereston loan taken from financial institutions which is due for more than six months from thedate they became payable asat March 312020. (Refer Note 14(i) (a) of the notes to thestandalone financialstatements).

(b) According to information and explanations given to us and the records of thecompany examined by us there is no dues outstanding in respect ofincometax sales taxservice tax duty of customs duty of excise goods and service tax and cess asat March31 2020 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 12018 to June302019 amounts to Rs.870.00 lakhs. Further company hasnot provided and paid interest fromJuly 01 2019 to March 312020 amounting to t. 672.43 lakhs (ReferNote 14(i) (a) of thenotes to the standalone financial statements).

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

(x) To thebestofourknowledgeand according to information and explanations given to usno fraud by the Company or no fraud on the Company by its officers or employees has beennoticed 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) TheCompany is not a Nidhi Company henceclause (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 177and 188 of the Act andthe details have been disclosedin the standalone financial statements - Refer Note no - 28.1 to the standalone financialstatements.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during theyear and hence paragraph 3(xiv) of theOrder 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) Based on the information and explanation the Company is required to beregistered under section 45-IA of the Reserve Bankoflndia Act 1934. The Company hadmadean application to the Reserve Bank of India (RBI) to grant Certificate ofRegistration. The Company is in the process of communication with RBI in this regard.ReferNote no - 30 to the standalone financial statements.

For S.S. Kothari Mehta & Company
CharteredAccountants
Firm Registration No. 000756N
Neeraj Bansal
Partner
Membership No. 095960
Place: New Delhi
Date:July 24 2020
UDIN:20095960AAAAHL4222

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 ofSection143 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 312020 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibilityfor 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 ofinternal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute ofChartered Accountants of India". These responsibilitiesinclude the design implementation and maintenance ofadequate 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 bytheInstituteofChartered Accountants ofIndia. 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 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'sjudgement 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 offinancial reporting and thepreparation ofstandalone 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 maintenanceofrecordsthat in reasonabledetail accurately and fairlyreflect 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 receiptsand expenditures of thecompanyare being made only inaccordance with authorisations of Management and directors of the Company; and

c) provide reasonable assurance regarding prevention or timely detection ofunauthorisedacquisition useordisposition of the Company's assets that could have a material effecton the standalonefinancial 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 managementoverrideofcontrols material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because ofchanges in conditions orthat the degree ofcompliance 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 2020 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 bythe Institute ofChartered Accountants of India".

For S. S. Kothari Mehta & Company
CharteredAccountants
Firm Registration No. 000756N
Neeraj Bansal
Partner
Membership No. 095960
Place: New Delhi
Date:July 24 2020
UDIN:20095960AAAAHL4222