To the Members of NRB Bearings Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of NRB BearingsLimited ('the Company') which comprise the Balance Sheet as at 31 March 2018 theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
2. 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 of thesestandalone financial statements that give a true and fair view of the state of affairs(financial position) profit or loss (financial performance including other comprehensiveincome) cash flows and changes in equity of the Company in accordance with the accountingprinciples generally accepted in India including the Indian Accounting Standards ('IndAS') specified under Section l33 of the Act. This responsibility also includes maintenanceof adequate accounting records in accordance with the provisions of the Act forsafeguarding the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.
3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
4. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
5. We conducted our audit in accordance with the Standards on Auditing 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 whetherthese standalone financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone financial statements. The procedures selected dependon the auditor's judgment including the assessment of the risks of material misstatementof the standalone financial statements whether due tofraud or error. In making those riskassessments the auditor considers internal financial controls relevant to the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. Anaudit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors a swell asevaluating the overall presentation ofthe standalone financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on these standalone financial statements.
8. 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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India including Ind AS specified under Section133 of the Act of the state of affairs (financial position) of the Company as at 31 March2018 and its profit (financial performance including other comprehensive income) itscash flows and the changes in equity for the year ended on that date.
9. The comparative financial information for the year ended 31 March 2017 and thetransition date opening balance sheet as at 1 April 2016 prepared in accordance with IndAS included in these standalone financial statements are based on the previously issuedstatutory financial statements for the year ended 31 March 2017 and 31 March 2016respectively prepared in accordance with Accounting Standards prescribed under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014 (as amended)which were audited by the predecessor auditor whose reports dated 26 May 2017 and 24 May2016 respectively expressed unmodified opinion on those standalone financial statementsand have been adjusted for the differences in the accounting principles adopted by theCompany on transition to Ind AS which have been audited by us. Our opinion is notmodified in respect of this matter.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditor's Report) Order 2016 ('the Order') issued bythe Central Government of India in terms of Section 143(11) of the Act we give in theAnnexure A a statement on the matters specified in paragraphs 3 and 4of the Order.
11. Further to our comments in Annexure A as required by Section 143(3) of the Act wereport 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 requiredby law have been kept by theCompany so far as it appears from our examination of those books;
c) the standalone financial statements dealt with by this report are inagreement withthe books of account;
d) in our opinion the aforesaid standalone financial statements comply with IndASspecified under Section 133 of the Act;
e) on the basis of the written representations receivedfrom the directors and taken onrecord by the Board of Directors none of the directors is disqualified as at 31 March2018 from being appointed as a director in terms of Section 164(2) of the Act;
f) we have also audited the internal financial controls over financial reporting(IFCoFR) of the Company as at 31 March 2018 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date and ourreport dated as per Annexure B expressed an unmodified opinion;
g) with respect to the other matters to be included inthe 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 andaccording to the explanations given tous:
i. the Company as detailed in Note 45(a) has disclosed the impact ofpendinglitigations on its financial position in the standalone financial statements.
ii. the Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;
iv. the disclosure requirements relating to holdings as well as dealings in specifiedbank notes were applicable for the period from 8 November 2016 to 30 December 2016 whichare not relevant to these standalone financial statements. Hence reporting under thisclause is not applicable.
For Walker Chandiok& Co LLP
Firm's Registration No.: 001076N/N500013
per Adi P. Sethna
Membership No.: 108840
Place: Mumbai Date: 21 May 2018
Annexure A to the Independent Auditor's Report of even date to the members of NRBBearings Limited on the standalone financial statements for the year ended 31 March 2018
Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
(b) The fixed assets have been physically verified by the management during the yearand no material discrepancies were noticed on such verification. In our opinion thefrequency of verification of the fixed assets is reasonable having regard to the size ofthe Company and the nature of its assets.
(c) The title deeds of all the immovable properties (which are included under the head'Property plant and equipment') are held in the name of the Company except for thefollowing property which was transferred as a result of amalgamation of companies asstated in Note 2 to the standalone financial statements wherein the tittle deed is in thename of the erstwhile company
|Nature of property ||Total Number of Cases ||Whether leasehold / freehold ||Gross block as on 31 March 2018 ||Net block on 31 March 2018 ||Remarks |
|Land at Waluj ||1 ||Leasehold |
|6.23 lakhs ||4.48 lakhs ||The lease deed is in the name of NRB Torrington Private Limited erstwhile Company that was merged with the Company under Section 391 to 394 of the Companies Act 1956 in terms of the approval of the Honorable High Court. |
In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year except for goods-in-transit and stocks lying withthird parties. For stocks lying with third parties at the year-end written confirmationshave been obtained by the management. No material discrepancies were noticed on theaforesaid verification
(iii) The Company has granted two unsecured loans (including a loan granted during theyear) to only one party covered in the register maintained under Section 189 of the Actwhich is its wholly owned foreign subsidiary; and with respect to the same:
(a) in our opinion the terms and conditions of a loan granted during the year is notprima facie prejudicial to the Company's interest;
(b) the schedule of repayment of principal and interest has been stipulated andrepayments of the principal amount and the receipts of interest are regular.
(c) there is no overdue amount in respect of loans granted to the party.
(iv) In our opinion the Company has complied with the provisions of Section 186 inrespect of investments loans and guarantees. Further in our opinion the Company has notentered into any transaction covered under Section 185 and Section 186 of the Act inrespect of provision of security.
(v) In our opinion the Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act 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 undersub-section (1) of Section 148 of the Act in respect of Company's products and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. However we have not made a detailed examination of the cost records with aview to determine whether they are accurate or complete.
(vii) (a) The Company is regular in depositing undisputed statutory dues includingprovident fund employees' state
i nsurance income-tax sales-tax service tax goods and service tax duty of customsduty of excise value added tax cess and other material statutory dues as applicablewith the appropriate authorities. Further no undisputed amounts payable in respectthereof were outstanding at the year-end for a period of more than six months from thedate they become payable.
(b) There were no dues in respect of service tax goods and service tax duty ofcustoms and duty of excise that have not been deposited with the appropriate authoritieson account of any dispute.
The dues outstanding in respect of income-tax sales-tax and value added tax on accountof disputes are as follows:
Statement of Disputed Dues
|Name of the statute ||Nature of dues ||Amount* (' in Lakhs) ||Amount paid thereagainst (' in Lakhs) ||Period to which the amount relates ||Forum where dispute is pending |
|The Income-tax ||Income tax ||95.55 ||- ||A.Y. 2011-12 ||Commissioner of Income |
|Act 1961 || ||310.96 ||- ||A.Y. 2012-13 ||Tax (Appeals) |
| || ||110.89 ||- ||A.Y. 2014-15 || |
| || ||232.36 ||- ||A.Y. 2015-16 || |
|The Bombay Sales Tax Act 1959 ||Value added tax ||1.20 ||- ||FY 1996-97 ||Deputy Commissioner (Appeals) |
|The Central Sales ||Sales tax ||2.42 ||- ||F.Y. 1995-96 ||Deputy |
|Tax Act 1956 || ||214.04 ||- ||F.Y. 2011-12 ||Commissioner(Appeals) |
| || ||51.42 ||- ||F.Y. 2012-13 || |
| || ||46.32 ||- ||F.Y. 2013-14 || |
|The Central Sales Tax Act 1956 ||Sales tax ||7.84 ||- ||F.Y. 2012-13 ||Additional Deputy Commissioner (Appeals) |
* including interest
(viii) The Company has not defaulted in repayment of loans or borrowings to anyfinancial institution or a bank or government or any dues to debenture-holders during theyear.
(ix) The Company did not raise moneys by way of initial public offer or further publicoffer (including debt instruments). In our opinion the term loans availed during theyear were applied for the purposes for which the loans were obtained.
(x) No fraud by the Company or on the Company by its officers or employees has beennoticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the Company in accordancewith the requisite approvals mandated by the provisions of Section 197 of the Act readwith Schedule V to the Act.
(xii) In our opinion the Company is not a Nidhi Company. Accordingly provisions ofclause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance withSections 177 and 188 of Act where applicable and the requisite details have beendisclosed in the standalone financial statements etc. as required by the applicableIndAS.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures. Accordingly the provisionsof clause 3(xiv) of the Order are not applicable.
(xv) In our opinion the Company has not entered into any non-cash transactions withthe directors or persons connected with them covered under Section 192 of the Act.Accordingly the provisions of clause 3(xv) of the Order are not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
For Walker Chandiok & Co LLP
Firm's Registration No.: 001076N/N500013
per Adi P. Sethna
Membership No.: 108840
Mumbai: 21 May 2018
Annexure B to the Independent Auditor's Report of even date to the members of NRBBearings Limited on
the standalone financial statements for the year ended 31 March 2018
Independent Auditor's report on the Internal Financial Controls under Clause (i) ofsub-section 3 ofSection 143 of the
Companies Act 2013 (the "Act")
1. In conjunction with our audit of the standalone financial statements of NRB BearingsLimited (the "Company") as at and for the year ended 31 March 2018 we haveaudited the internal financial controls over financial reporting (IFCoFR) of the Companyas atthat date.
Management's Responsibility for Internal Financial Controls
2. The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India (ICAI). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of the Company's business including adherence to Company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
3. Our responsibility is to express an opinion on the Company's IFCoFR based on ouraudit. We conducted our audit in accordance with the Standards on Auditing issued by theICAI and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of IFCoFR and the Guidance Note issued by the ICAI. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate IFCoFR wereestablished and maintained and if such controls operated effectively in allmaterialrespects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining anunderstanding of IFCoFR assessing the risk that amaterial weakness exists and testingand evaluating 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 ofthe financial statements whether dueto fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A Company's IFCoFR is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles. A Company'sIFCoFR includes those policiesand procedures that (1) pertain to the maintenance ofrecords that in reasonable detailaccurately 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
7. Because of the inherent limitations of IFCoFR including the possibility ofcollusion or improper management override of controls material misstatementsdue to erroror fraud may occur and not be detected. Also projections of any evaluation of the IFCoFRto future periods are subject to the risk that IFCoFR may become inadequate because ofchanges inconditions or that the degree of compliance with the policies or procedures maydeteriorate.
8. In our opinion the Company has in all material respects adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31 March 2018 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note issued by the ICAI.
For Walker Chandiok & Co LLP
Firm's Registration No.: 001076N/N500013
per Adi P. Sethna
Membership No.: 108840
Date : 21 May 2018