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Birla Corporation Ltd.

BSE: 500335 Sector: Industrials
NSE: BIRLACORPN ISIN Code: INE340A01012
BSE 00:00 | 16 Apr 956.15 12.15
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NSE 00:00 | 16 Apr 956.55 10.55
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OPEN 945.00
PREVIOUS CLOSE 944.00
VOLUME 7018
52-Week high 1014.20
52-Week low 372.50
P/E 25.23
Mkt Cap.(Rs cr) 7,363
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 945.00
CLOSE 944.00
VOLUME 7018
52-Week high 1014.20
52-Week low 372.50
P/E 25.23
Mkt Cap.(Rs cr) 7,363
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 of BIRLACORPORATION LIMITED (“the Company”) which comprise the Balance Sheet as at31st March 2020 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 the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 as amended (“the Act”) in the manner so required andgive a true and fair view in conformity with accounting principles generally accepted inIndia of the state of a3airs (financial position) of the Company as at 31st March 2020its profit (financial performance including other comprehensive income) its cash flowsand changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the “Auditor'sResponsibilities for the Audit of the Standalone Financial Statements” section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (“ICAI”) together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules made thereunder and we have ful3lled ourother ethical responsibilities in accordance with these requirements and the ICAI's Codeof Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion on the standalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone 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 Matter Auditor's Response
Recoverability of MAT Credit Entitlement in future:
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 Audit procedures included among others review of:
– 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 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 adequacy of the Company's disclosures in the financials on deferred tax assets and assumptions used.
The disclosures relating to the above are included in Note no 25 of the standalone financial statements.

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

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Directors'Report and Management Discussion and Analyses Business Responsibility Report and theReport on Corporate Governance but 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 material misstatementof this other information we are required to report that fact. We have nothing to reportin this regard.

Responsibilities of Management and Those Charged with Governance for the StandaloneFinancial 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 changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under Section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements the Board of Directors is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the Board of Directors either intends to liquidate the Company or tocease operations or has no realistic alternative but to do so.

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

Auditor's Responsibilities 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company 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.

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 Government of India in terms of sub-section (11) of section 143 of the Actand on the basis of such checks of the books and records of the Company as we consideredappropriate and according to the information and explanations given to us we give in“Annexure A” a statement on the matters specified in the paragraphs 3 and 4 ofthe 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 explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit of the aforesaidstandalone financial statements;

b) In our opinion proper books of account 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 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 the aforesaid standalone financial statements comply with the IndianAccounting Standards (Ind AS) specified under section 133 of the Act read with relevantrules issued thereunder;

e) On the basis of written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 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 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: 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.

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

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company in accordance with the relevantprovisions 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)
Date : 22nd May 2020 UDIN: 20024282AAAABL7992

Annexure-A referred to in the Independent Auditors' Report to the Members of BirlaCorporation Limited on the standalone accounts for the year ended 31st March 2020.

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

(b) The fixed assets have been physically verified by the management/ outside agenciesin a phased manner and reconciled with books of account except in case of Soorah JuteMills (due to suspension of work) with carrying value other than land and building at Rs.0.30 Crore and Auto Trim Division at Gurgaon & Chakan with carrying value other thanland and building at Rs.1.61 Crores where verification could not be done. We areinformed that no major discrepancies were noticed on such verification. Minordiscrepancies stands adjusted in the accounts. In our opinion the frequency ofverification is reasonable in relation to the size of the Company.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed/ transfer deed/ conveyancedeed etc. provided to us we report that the title deeds of immovable properties are heldin the name of the Company. The title deeds relating to certain immovable properties havebeen pledged as security with banks and financial institution for loans guarantees etc.are held in the name of the Company based on the con3rmations from the Security Trustees.

(ii) The stock of finished goods stores spare parts and raw materials have beenphysically verified by the management/ outside agencies at reasonable intervals during theyear except for Soorah Jute Mills (due to suspension of work) and Auto Trim Division atGurgaon and Chakan where physical verification could not be done. We are informed thatinventory held at these locations were insignificant. No material discrepancies werenoticed on physical verification and minor discrepancies stands adjusted in the accounts.

(iii) The Company has not granted any loans secured or unsecured to companies 3rmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the Companies Act 2013. Therefore the provisions of clause3(iii)(a)(b)&(c) of the Order are not applicable.

(iv) The Company has not given any loan or provided any guarantees or security toparties covered under section 185 of the Companies Act 2013. In respect of loansinvestments guarantees and security the Company has complied with the provisions ofsection 186 of the Companies Act 2013.

(v) The Company has not accepted deposits during the year from the public within theprovisions of section 73 to 76 or any other provisions of the Companies Act 2013 and theRules framed thereunder.

(vi) We have broadly reviewed the books of accounts maintained by the Company pursuantto rules made under subsection (1) of section 148 of the Act and are of the opinion thatprima facie the prescribed accounts and records have been maintained. We have nothowever made a detailed examination of the records with a view to determine whether theyare accurate and complete.

(vii) (a) According to the records of the Company the Company has been generallyregular in depositing undisputed statutory dues including provident fund employees' stateinsurance income-tax service tax sales-tax goods and services tax (GST) duty ofexcise duty of custom value added tax cess and any other statutory dues with theappropriate authorities. There were no arrears of undisputed statutory dues as at 31stMarch 2020 which were outstanding for a period of more than six months from the date theybecame payable.

(b) The disputed dues of different years relating to income-tax service-taxsales-tax duty of customs duty of excise value added tax or goods and services tax(GST) which have remained unpaid as on 31st March 2020 for which appeals are pending asunder:

Name of the Statute Nature of Dues Amount Period to which amount relates Forum where the dispute is pending
(Rs. in Crore)
Sales Tax & VAT Laws Sales Tax and VAT 15.58 FY 1993-94 to 2017-18 Department/ 1st Appellate Authority
3.53 FY 1989-90 to 2013-14 Appellate Tribunals
3.11 FY 1989-90 to 2010-11 High Court
IGST SGST and CGST Act IGST and SGST 0.16 FY 2017-18 to 2018-19 Department/ 1st Appellate Authority
Central Excise Act 1944 Excise Duty 42.80 FY 1980-81 to 2017-18 Department/ 1st Appellate Authority
38.84 FY 2001-02 to 2017-18 Appellate Tribunals
2.12 FY 2003-04 to 2017-18 High Court
Finance Act 1994 Service Tax 5.74 FY 2013-14 to 2016-17 Department/ 1st Appellate Authority
1.19 FY 2005-06 to 2010-11 Appellate Tribunals
1.62 FY 2012-13 to 2013-14 High Court
Customs Act 1962 Custom Duty 1.99 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 verification of records and information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings tofinancial institutions or banks and dues to debenture holders.

(ix) In our opinion and according to the information and explanations given to us termloans taken during the year were applied for the purpose for which the loans wereobtained. The Company has not raised moneys by way of public offer (including debtinstruments).

(x) Based on the audit procedures performed and representation obtained from themanagement we report that no case of material fraud by the Company or on the Company byits officers or employees has been 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 theCompanies Act 2013.

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

(xiii) In our opinion and according to the information and explanations given to usall the transactions with the related parties are in compliance with section 177 and 188of the Companies Act 2013 to the extent applicable and the details have been disclosed inthe financial statements as required by the applicable Indian Accounting Standards (IndAS).

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures. Therefore the provisionsof clause 3(xiv) of the Order are not applicable.

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

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934.

For V. Sankar Aiyar & Co.
Chartered Accountants
(Firm Regn. No.: 109208W)
(M.S. BALACHANDRAN)
Place : New Delhi Partner (M. No: 024282)
Date : 22nd May 2020 UDIN: 20024282AAAABL7992

Annexure-B referred to in the Independent Auditors' Report to the Members of BirlaCorporation Limited on the standalone accounts for the year ended 31st March 2020.

We have audited the internal financial controls over financial reporting of the Companyas of 31st March 2020 in conjunction with our audit of the standalone financialstatements 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 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 Reporting(the“Guidance Note”) issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to Company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the 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 accordancewith the Guidance Note and the Standards on Auditing issued by ICAI and deemed to beprescribed 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit 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 judgement including the assessment of the risks of materialmisstatement of the standalone financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 effect 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 2020 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)
Date : 22nd May 2020 UDIN: 20024282AAAABL7992

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