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Brigade Enterprises Ltd.

BSE: 532929 Sector: Infrastructure
NSE: BRIGADE ISIN Code: INE791I01019
BSE 15:08 | 08 Apr 147.75 10.50
(7.65%)
OPEN

137.90

HIGH

147.75

LOW

133.50

NSE 15:04 | 08 Apr 141.30 4.90
(3.59%)
OPEN

139.65

HIGH

141.30

LOW

134.00

OPEN 137.90
PREVIOUS CLOSE 137.25
VOLUME 3067
52-Week high 255.00
52-Week low 107.80
P/E 10.58
Mkt Cap.(Rs cr) 3,020
Buy Price 147.55
Buy Qty 25.00
Sell Price 148.00
Sell Qty 10.00
OPEN 137.90
CLOSE 137.25
VOLUME 3067
52-Week high 255.00
52-Week low 107.80
P/E 10.58
Mkt Cap.(Rs cr) 3,020
Buy Price 147.55
Buy Qty 25.00
Sell Price 148.00
Sell Qty 10.00

Brigade Enterprises Ltd. (BRIGADE) - Auditors Report

Company auditors report

To the Members of Brigade Enterprises Limited

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of BrigadeEnterprises Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2018 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of significant accounting policies and otherexplanatory information.

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015as amended. This responsibility also includes maintenance of adequate accounting recordsin accordance 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 the design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made there under. We conductedour audit of the standalone Ind AS financial statements in accordance with the Standardson Auditing issued by the Institute of Chartered Accountants of India as specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the standaloneInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the standalone Ind AS financial statements that give a true and fair viewin order to design audit procedures that are appropriate in the circumstances. An auditalso includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the standalone Ind AS financial statements. Webelieve that the audit evidence obtained by us and the audit evidence obtained by theother auditors in terms of their reports referred to in sub-paragraph (i) of the OtherMatters paragraph below is sufficient and appropriate to provide a basis for our auditopinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the standalone Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2018 its profit including other comprehensive income its cash flows andthe changes in equity for the year ended on that date.

Other Matters

i. We did not audit the financial statements and the other financial information asregards Company's share in losses of 2 limited liability partnership firms amounting toRs. 222 lakhs for the year ended March 31 2018 which have been audited by other auditorsand whose reports have been furnished to us by the management. Our opinion in so far asit relates to the affairs of such partnership firms is based solely on the report ofother auditors. Our opinion is not modified in respect of this matter.

ii. We draw attention to Note 47 of the audited standalone Ind AS financial statementsrelating to the Scheme of Arrangement between Brigade Enterprises Limited (‘theCompany') and its wholly owned subsidiaries - Brigade Hotel Ventures Limited BrigadeHospitality Services Limited and Augusta Club Private Limited and their respectiveshareholders and creditors in terms of the provisions of Sections 230 to 233 of theCompanies Act 2013 to transfer the hotels business integrated clubs and conventioncentre business and ‘Augusta Club' business to its wholly owned subsidiaries(hereinafter referred to as "the Scheme"). The Scheme was approved by NationalCompany Law Tribunal (‘NCLT') in March 2018 with an appointed date of October 012016 and consequently the Company has accounted for the Scheme using the pooling ofinterests method from the said appointed date. However the aforesaid accounting from theappointed date is not in accordance with Ind AS 103 specified under Section 133 of theCompanies Act 2013 read with the Companies (Indian Accounting Standards) Rules 2015 (asamended). The previously published Ind AS financial information of the Company includedin these standalone Ind AS financial statements have been restated for the reasons morefully described in Note 47 of the audited standalone Ind AS financial statements. Ouropinion is not qualified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure 1 a statement on the matters specified in paragraphs 3and 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) 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 and proper returnsadequate for the purposes of our audit have been received from branches not visited by us;

(c) The Balance Sheet Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of accounts;

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of written representations received from the directors as on March 312018 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 from being appointed as a director in terms of section 164 (2) ofthe 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 2" to this report;

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements – Refer Note 32(c) to thestandalone Ind AS financial statements;

ii. The Company did not have any material foreseeable losses on long-term contractsincluding derivative contracts;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Adarsh Ranka
Partner
Membership Number: 209567
Place: Bengaluru
Date: May 16 2018

ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE IND ASFINANCIAL STATEMENTS OF BRIGADE ENTERPRISES LIMITED

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment and investmentproperty.

(b) All property plant and equipment and investment property have not been physicallyverified by the management during the year but there is a regular programme ofverification which in our opinion is reasonable having regard to the size of the Companyand the nature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given by the management and based onthe examination of the registered sale deed/transfer deed/registered joint developmentagreements provided to us we report that the title deeds of immovable propertiesincluded in property plant and equipment and investment property are held in the name ofthe Company. Immovable properties of land and buildings whose title deeds have beenpledged as security for loans are held in the name of the Company based on confirmationsreceived by us from lenders.

(ii) The management has conducted physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.

(iii) (a) The Company has granted loans to six parties (including interest-free loans)covered in the register maintained under section 189 of the Companies Act 2013. In ouropinion and according to the information and explanations given to us the terms andconditions of the loans are not prejudicial to the Company's interest having regard tomanagement's representation that the loans are given to such parties considering theCompany's economic interest and long-term trade relationship with such parties.

(b) In respect of the loans granted to parties covered in the register maintained underSection 189 of the Companies Act 2013 the loans are repayable as per the contractualterms. As per the contractual terms the loans have not fallen due for repayment.Accordingly there has been no default on the part of the parties to whom the money hasbeen lent.

(c) There are no amounts of loans granted to companies firms or other parties listedin the register maintained under section 189 of the Companies Act 2013 which are overduefor more than ninety days.

(iv) In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Companies Act 2013 in respect of loans todirectors including entities in which they are interested and in respect of loans andadvances given investments made and guarantees and securities given have been compliedwith by the company.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) We have broadly reviewed the books of account maintained by the Company pursuantto the rules made by the Central Government for the maintenance of cost records undersection 148(1) of the Companies Act 2013 related to the construction activities and areof the opinion that prima facie the specified accounts and records have been made andmaintained. We have not however made a detailed examination of the same.

(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund employees' state insuranceincome-tax sales-tax service tax goods and service tax duty of custom duty of excisevalue added tax cess and other statutory dues applicable to it.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax wealth-taxservice tax sales-tax goods and service tax duty of custom duty of excise value addedtax cess and other material statutory dues were outstanding at the year end for aperiod of more than six months from the date they became payable.

(c) According to the records of the Company the dues outstanding of income-taxsales-tax wealth-tax service tax goods and service tax duty of custom duty of excisevalue added tax and cess on account of any dispute are as follows:

Name of the statue Nature of dues Disputed Amount Amount Paid under protest Financial Year to which it relates Forum where dispute is pending
(Rs. lakhs) (Rs. lakhs)
Income Tax Act 1961 Income Tax 37 37 2007-14 Income Tax Appellate Tribunal
973 - 2006-10 The High Court of Karnataka
298 - 2010-11 Commissioner Of Income Tax (Appeals)
2 2 2011-12
499 - 2012-13
29 - 2013-14
Finance Act 1994 Service Tax 97 - 2006-08 Custom Excise & Service Tax Appellate Tribunal
376 - 2008-12
699 - 2009-12
Karnataka Value Added Tax 2003 Value added tax 222 222 2006-07 Joint Commissioner of Commercial Taxes (Appeals)
80 80 2008-09
48 48 2009-10
435 237* 2010-11
115 115 2011-12
250 250 2010-11 The High Court of Karnataka
1290 400** 2012-13 Karnataka Appellate Tribunal
246 100 2013-14 Deputy Commissioner of Commercial Taxes
Karnataka Tax On Entry Of Goods Act 1979 Entry tax 84 84 2008-09 Joint Commissioner of Commercial Taxes (Appeals)

* Excluding bank guarantee of Rs. 198 lakhs provided by the Company under protest.

** Excluding bank guarantee of Rs. 890 lakhs provided by the Company under protest.

(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing to a bank orfinancial institution. The Company did not have any loans or borrowing from government ordues to debenture holders.

(ix) In our opinion and according to the information and explanations given by themanagement the Company has utilized the monies raised by way of term loans (representingloans with a repayment period beyond 36 months) for the purposes for which they wereraised. The Company has not raised any monies by way of initial public offer/furtherpublic offer (including debt instruments).

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the Company or no fraud on the Companyby the officers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management we reportthat the managerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 of theCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given by the management theCompany has complied with provisions of Section 42 of the Companies Act 2013 in respectof the preferential allotment or private placement of shares (representing offering of itsequity shares through a qualified institutions placement). According to the informationand explanations given by the management we report that the amounts raised have beenused for the purposes for which the funds were raised though idle/surplus funds whichwere not required for immediate utilization have been gainfully invested in liquidinvestments payable on demand. The Company has not made any preferential allotment orprivate placement of fully or partly convertible debentures during the year.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in Section 192 of the Companies Act 2013.

(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.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Adarsh Ranka
Partner
Membership Number: 209567
Place : Bengaluru
Date: May 16 2018

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE IND ASFINANCIAL STATEMENTS OF BRIGADE ENTERPRISES LIMITED

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of BrigadeEnterprises Limited("the Company") as of March 31 2018 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 responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the 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 Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these standalone financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the "Guidance Note")and the Standards on Auditing as specified under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls and both issuedby the Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting with reference to these standalone financial statements was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to thesestandalone financial statements and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting with reference to these standalonefinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto 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 internal financial controls over financialreporting with reference to these standalone financial statements.

Meaning of Internal Financial Controls Over Financial Reporting With Reference to theseFinancial Statements

A company's internal financial control over financial reporting with reference to thesestandalone financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accountingprinciples. A company's internal financial control over financial reporting with referenceto these standalone financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting WithReference to these Standalone Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these standalone financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these standalone financial statements to future periods are subject to the risk thatthe internal financial control over financial reporting with reference to these standalonefinancial statements may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls over financial reporting with reference to these standalone financialstatements and such internal financial controls over financial reporting with reference tothese standalone financial statements were operating effectively as at March 31 2018based on 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.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Adarsh Ranka
Partner
Membership Number: 209567
Place : Bengaluru
Date: May 16 2018