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Birla Corporation Ltd.

BSE: 500335 Sector: Industrials
NSE: BIRLACORPN ISIN Code: INE340A01012
BSE 00:00 | 27 May 993.25 -8.40
(-0.84%)
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1004.10

HIGH

1019.80

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986.00

NSE 00:00 | 27 May 999.85 -7.95
(-0.79%)
OPEN

1006.00

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OPEN 1004.10
PREVIOUS CLOSE 1001.65
VOLUME 7005
52-Week high 1649.00
52-Week low 895.30
P/E 33.80
Mkt Cap.(Rs cr) 7,649
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1004.10
CLOSE 1001.65
VOLUME 7005
52-Week high 1649.00
52-Week low 895.30
P/E 33.80
Mkt Cap.(Rs cr) 7,649
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Birla Corporation Ltd. (BIRLACORPN) - Auditors Report

Company auditors report

TO THE MEMBERS OF BIRLA CORPORATION LIMITED

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements ofBIRLA CORPORATION LIMITED ("the Company") which comprise the Balance Sheet asat 31st March 2021 the Statement of Profit & Loss (including Other ComprehensiveIncome) the Statement of Changes in Equity and the Statement of Cash Flows for the yearthen ended and notes to the standalone financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas "the standalone financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 as amended ("the Act") in themanner so required and give a true and fair view in conformity with accounting principlesgenerally accepted in India of the state of affairs (financial position) of the Companyas at 31st March 2021 its profit (financial performance including other comprehensiveincome) its cash flows and changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those Standards are further described 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 Code of Ethics issued by the Institute of Chartered Accountants of India("ICAI") together with the ethical requirements that are relevant to our auditof the standalone 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 ICAI's Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our opinion on thestandalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. 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. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matter Auditor's Response
Recoverability of MAT Credit Entitlement in future: Audit procedures included among others review of:
The Company has recognised deferred tax assets mainly on account of tax credit available for set o3 (Minimum Alternate Tax) under the Income Tax Act 1961. Under Ind AS 12 – Income Taxes deferred tax assets shall be recognised to the extent that it is probable that future taxable profit will be available against which the unused tax credit can be utilised. The assessment of valuation of deferred tax assets requires significant management judgement and estimation. This include amongst others estimation of long-term future profitability future revenue from proposed projects and tax regulations and developments. The appropriateness of the methodology applied by the Company with applicable Indian accounting standards and applicable taxation laws along with the future business forecast of taxable profits.
The likelihood of the Company to utilize the available MAT credit entitlements in the future with underlying projections and assumptions relating to future estimated profits future capitalisations and depreciation allowance thereon and future estimates of taxable income.
As a result the recognition of the deferred tax asset on above is significant to our audit. The disclosures relating to the above are included in Note No. 25 of the standalone financial statements. The adequacy of the Company's disclosures in the financials on deferred tax assets and assumptions used.
Litigations and Claims
The Company is exposed to different laws regulations and interpretations thereof which encompasses direct/ indirecttaxationandlegalmatters.Inthe normal course of business provisions and contingent liabilities may arise from legal and tax proceedings including regulatory and other Governmental proceedings constructive obligations as well as investigations by authorities and commercial claims. Our audit procedure in response to this key Audit Matter included among others
Assessment of the process and relevant controls implemented to identify legal and tax litigations and pending administrative proceedings.
Based on the nature of regulatory and legal cases management applies significant judgement when considering whether and how much to provide for the potential exposure of each matter. Assessment of assumptions used in the evaluation of possible legal and tax risks by the legal and tax department of the Company considering the legal precedence and other rulings in similar cases.
These estimates could change significantly over time as new facts emerge and each legal case progresses. Inquiry with the legal and tax divisions of the Company regarding the status of the most significant disputes and perusal of the relevant documentation.
Given the inherent complexity and magnitude of potential exposures and the judgement necessary to estimate the amount of provisions required or to determine required disclosures this is a key audit matter.
Taking note of opinion received from the experts where available.
(Refer Note No. 40 to the Standalone Ind AS Financial Statements) Review of the adequacy of the disclosures in the notes to the standalone financial statements.

Information Other than the Standalone Financial Statements andAuditor's Report Thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Directors' Report and Management Discussion and Analyses BusinessResponsibility Report and the Report on Corporate Governance but does not include thestandalone financial statements and our auditor's report thereon.

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

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements the Board ofDirectors is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the Board of Directors either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

Obtain an understanding of internal control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinionon whether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit 3ndingsincluding any significant de3ciencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1 As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Government of India in terms of sub-section (11) ofsection 143 of the Act and on the basis of such checks of the books and records of theCompany as we considered appropriate and according to the information and explanationsgiven to us we give in "Annexure A" a statement on the matters specified in theparagraphs Rs and 4 of the said 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 purposes of our auditof the aforesaid standalone financial statements;

b) In our opinion proper books of account 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 othercomprehensive income) the Statement of Cash Flows and the statement of Changes in Equitydealt with by this report are in agreement with the books of account;

d) In our opinion the aforesaid standalone financial statements complywith the Indian Accounting Standards (Ind AS) specified under section 133 of the Act readwith relevant rules issued thereunder;

e) On the basis of written representations received from the directorsas on 31st March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of section164(2) of the Act;

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in "Annexure B";

g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.

h) 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 as amended in our opinion and to the best of our information and accordingto the explanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements – Refer Note 40.1 to 40.4to the standalone financial statements;

ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts;

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company in accordancewith the relevant provisions of the Act and Rules made there under.

For V. Sankar Aiyar & Co.
Chartered Accountants
(Firm Regn. No.: 109208W)
(M.S. BALACHANDRAN)
Place: New Delhi Partner (M. No:024282)
Dated: 12th May 2021 UDIN: 21024282AAAAFY6281

Annexure-A referred to in the Independent Auditors' Report to theMembers of Birla Corporation Limited on the standalone accounts for the year ended 31stMarch 2021

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

(b) The fixed assets have been physically veri3ed by the management/outside agencies in a phased manner and reconciled with books of account except in caseof Soorah Jute Mills (due to suspension of work) with carrying value other than land andbuilding at Rs. 0.30 Crore and Auto Trim Division at Gurgaon & Chakan with carryingvalue other than land and building at Rs.1.54 Crores where veri3cation could not bedone. We are informed that no major discrepancies were noticed on such veri3cation. Minordiscrepancies stands adjusted in the accounts. In our opinion the frequency ofveri3cation is reasonable in relation to the size of the Company.

(c) According to the information and explanations given to us and therecords examined by us and based on the examination of the registered sale deed/ transferdeed/ conveyance deed etc. provided to us we report that the title deeds of immovableproperties are held in the name of the Company. The title deeds relating to certainimmovable properties have been pledged as security with banks and financial institutionfor loans guarantees etc. are held in the name of the Company based on the confirmationsfrom the Security Trustees.

(ii) The stock of 3nished goods stores spare parts and raw materialshave been physically veri3ed by the management/ outside agencies at reasonable intervalsduring the year except for Soorah Jute Mills (due to suspension of work) and Auto TrimDivision at Gurgaon and Chakan where physical veri3cation could not be done. We areinformed that inventory held at these locations were insignificant. No materialdiscrepancies were noticed on physical veri3cation and minor discrepancies stands adjustedin the accounts.

(iii) The Company has not granted any loans secured or unsecured tocompanies firms limited liability partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013. Therefore the provisions ofclause 3(iii)(a)(b)&(c) of the Order are not applicable.

(iv) The Company has not given any loan or provided any guarantees orsecurity to parties covered under section 185 of the Companies Act 2013. In respect ofloans investments guarantees and security the Company has complied with the provisionsof section 186 of the Companies Act 2013.

(v) The Company has not accepted deposits during the year from thepublic within the provisions of section 73 to 76 or any other provisions of the CompaniesAct 2013 and the Rules framed thereunder.

(vi) We have broadly reviewed the books of accounts maintained by theCompany pursuant to rules made under sub-section (1) of section 148 of the Act and are ofthe opinion that prima facie the prescribed accounts and records have been maintained. Wehave not however made a detailed examination of the records with a view to determinewhether they are accurate and complete.

(vii) (a) According to the records of the Company the Company has beengenerally regular in depositing undisputed statutory dues including provident fundemployees' state insurance income-tax service tax sales-tax goods and servicestax (GST) duty of excise duty of custom value added tax cess and any other statutorydues with the appropriate authorities. There were no arrears of undisputed statutory duesas at 31st March 2021 which were outstanding for a period of more than six months fromthe date they became payable.

(b) The disputed dues of di3erent years relating to income-taxservice-tax sales-tax duty of customs duty of excise value added tax or goods andservices tax (GST) which have remained unpaid as on 31st March 2021 for which appeals arepending as under:

Name of the Statute Nature of dues Amount (Rs. in Crores) Period to which amount relates Forum where the dispute is pending
Sales Tax & VAT Laws Sales tax and VAT 6.43 FY 1993-94 to 2017-18 Department / 1st Appellate Authority
1.84 FY 1989-90 to 2007-08 Appellate Tribunals
2.79 FY 1989-90 to 2005-06 High Court
IGST SGST and CGST Act IGST and SGST 38.19 FY 2017-18 to 2019-20 Department / 1st Appellate Authority
0.80 FY 2017-18 High Court
Central Excise Act 1944 Excise Duty 21.27 FY 1980-81 to 2017-18 Department / 1st Appellate Authority
41.77 FY 2001-02 to 2017-18 Appellate Tribunals
16.57 FY 2012-13 to 2017-18 High Court
Finance Act 1994 Service Tax 6.62 FY 2005-06 to 2010- 11 and 2013-14 to 2016-17 Appellate Tribunals
Customs Act 1962 Custom Duty 3.18 FY 2012-13 Appellate Tribunals
Income Tax Act 1961 Income Tax 1.18 AY 2016-17 Department / 1st Appellate Authority

(viii) On the basis of the veri3cation of records and information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings to financial institutions or banks and dues to debenture holders.

(ix) In our opinion and according to the information and explanationsgiven to us the Company has utilized the monies raised by way of debt instruments andterm loans for the purposes for which they were raised/obtained.

(x) Basedontheauditproceduresperformedandrepresentation obtained fromthe management we report that no case of material fraud by the Company or on the Companyby its officers or employees has been noticed or reported during the year.

(xi) The managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act 2013.

(xii) The Company is not a Nidhi Company. Therefore the provisions ofclause 3(xii) of the Order are not applicable.

(xiii) In our opinion and according to the information and explanationsgiven to us all the transactions with the related parties are in compliance with section177 and 188 of the Companies Act 2013 to the extent applicable and the details have beendisclosed in the financial statements as required by the applicable Indian AccountingStandards (Ind AS).

(xiv) During the year the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures.Therefore the provisions of clause 3(xiv) of the Order are not applicable.

(xv) According to the information and explanations given to us and therepresentation obtained from the management the Company has not entered into any non-cashtransactions with directors or persons connected with them. Therefore the provisions ofclause 3(xv) of the Order are not applicable.

(xvi) In our opinion and according to the information and explanationsgiven to us the Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.

For V. Sankar Aiyar & Co.
Chartered Accountants
(Firm Regn. No.: 109208W)
(M.S. BALACHANDRAN)
Place: New Delhi Partner (M. No:024282)
Dated: 12th May 2021 UDIN: 21024282AAAAFY6281

Annexure-B referred to in the Independent Auditors' Report to theMembers of Birla Corporation Limited on the standalone accounts for the year ended 31stMarch 2021

We have audited the internal financial controls over financialreporting of the Company as of 31st March 2021 in conjunction with our audit of thestandalone financial statements of the Company for the year ended 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(the "Guidance Note") issued by the Institute of CharteredAccountants of India (ICAI). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and effcient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand issued by ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting 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 system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting 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 standalone financial statements whether due tofraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over 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 financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that 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 andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material e3ect on the 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 operating effectively as at 31st March 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.

For V. Sankar Aiyar & Co.
Chartered Accountants
(Firm Regn. No.: 109208W)
(M.S. BALACHANDRAN)
Place: New Delhi Partner (M. No:024282)
Dated: 12th May 2021 UDIN: 21024282AAAAFY6281

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