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Rane Brake Lining Ltd.

BSE: 532987 Sector: Auto
NSE: RBL ISIN Code: INE244J01017
BSE 00:00 | 03 Jul 554.75 -10.90
(-1.93%)
OPEN

570.00

HIGH

570.00

LOW

552.10

NSE 00:00 | 03 Jul 555.55 -9.25
(-1.64%)
OPEN

565.15

HIGH

569.25

LOW

552.00

OPEN 570.00
PREVIOUS CLOSE 565.65
VOLUME 2140
52-Week high 783.60
52-Week low 294.00
P/E 12.78
Mkt Cap.(Rs cr) 439
Buy Price 553.00
Buy Qty 125.00
Sell Price 554.75
Sell Qty 50.00
OPEN 570.00
CLOSE 565.65
VOLUME 2140
52-Week high 783.60
52-Week low 294.00
P/E 12.78
Mkt Cap.(Rs cr) 439
Buy Price 553.00
Buy Qty 125.00
Sell Price 554.75
Sell Qty 50.00

Rane Brake Lining Ltd. (RBL) - Auditors Report

Company auditors report

To

The Members

Rane Brake Lining Limited

Report On The Audit Of Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Rane Brake LiningLimited ("the Company") which comprise the Balance Sheet as at 31st March 2019the Statement of Profit and Loss (including Other Comprehensive Income) Statement ofChanges in Equity and Cash Flows Statement for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information(herein after referred to as 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 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2019 and its profit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the consolidated financial statements of the current period.These matters were addressed in the context of our audit of the consolidated financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

We have determined that there are no key audit matters to communicate in our report.

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

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report Corporate Governance and CorporateInformation but does not include the standalone financial statements and our auditor'sreport thereon.

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

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in 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 Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the accounting Standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

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.

Those 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 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa 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.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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 Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable

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.

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 Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

d. In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e. On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting

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 opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the 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 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 financial statements – Refer Note 38 to the financial statements

(ii) the Company did not have any long-term contracts including derivative contractsfor which 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

For Varma & Varma
Chartered Accountants
FRN004532S
P R Prasanna Varma
Place : Chennai Partner
Date : May 22 2019 M No.25854

Annexure‘A' to the Independent Auditor's Report

Referred to in paragraph under the heading report on "Other Legal and RegulatoryRequirements" of our independent audit report of even date on the standalonefinancial statements of rane brake lining limited for the year ended March 31 2019

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

b. We are informed that fixed assets have been physically verified by the Management atreasonable intervals and that no material discrepancies were noticed on such verification

c. According to the information and explanations given to us and based on theexamination of the records of the company including confirmation received from banks inrespect of title deeds deposited with them wherever applicable and also having regard tolegal opinions received in two cases we report that the title deeds of immovableproperties are held in the name of the company.

(ii) We are informed that the physical verification of inventory has been conducted bythe management at reasonable intervals and no material discrepancies were noticed on suchverification

(iii) The Company has not granted any loans secured or unsecured to companies/firmsor other parties covered in the register maintained under section 189 of the CompaniesAct 2013. Accordingly reporting under Clause 3(iii) of the Order is not applicable to thecompany.

(iv) According to the information and explanations given to us and based on the recordsof the company examined by us the company has not made any investments granted any loansor given any security or guarantee for which the provisions of section 185 and 186 of theAct are applicable.

(v) The company has not accepted any deposit from the public during the year.Accordingly reporting under Clause 3(iii) of the Order is not applicable to the company.

(vi) The Central Government has prescribed maintenance of cost records under section148(1) of the Act in respect of certain products manufactured by the company. We havebroadly reviewed the cost records maintained by the Company pursuant to the Companies(Cost Records and Audit) Rules 2014 as amended and are of the opinion that primafacie the prescribed cost records have been made and maintained. We have however notmade a detailed examination of the cost records with a view to determine whether they areaccurate or complete.

(vii) a. As per the information and explanations furnished to us and according to ourexamination of the records of the Company the Company has been regular in depositing theundisputed statutory dues including provident fund employees state insurance income taxgoods and service tax duty of customs cess and other material statutory dues asapplicable to the Company with the appropriate authorities during the year and noundisputed amounts in respect of material statutory dues were in arrears as at March 312019 for a period of more than six months from the date they became payable.

b. According to the information and explanations given to us and based on the recordsof the Company examined by us the particulars of dues of income tax sales tax servicetax duty of customs duty of excise and value added tax that have not been deposited onaccount of any dispute as at March 31 2019 are as follows:

Statute Nature of dues Amount (Rs.in Cr) Period to which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Income Tax 0.48 April 2001 to March 2002 April 2003 to March 2004 High Court of Judicature Madras
Income Tax Act 1961 Income Tax 0.34 April 2004 to March 2005 Income Tax Appellate Tribunal Chennai
Income Tax Act 1961 Income Tax 3.46 April 2006 to March 2008 April 2010 to March 2013 April 2014 to March 2017 Commissioner of income (Appeals) Chennai
Central Sales Tax Act 1956 Sales Tax 0.34 April 2004 to March 2005 April 2008 to March 2012 Sales Tax Appellate Tribunal Hyderabad
Central Sales Tax Act 1956 Sales Tax 0.24 April 2008 to March 2009 and April 2011 to March 2012 Puducherry Value Added Tax Appellate Tribunal Puducherry
Central Sales Tax Act 1956 Sales Tax 0.08 April 2010 to March 2011and April 2013 toMarch2014 The Joint Commissioner of Sales Tax (Appeal) Pune
Central Sales Tax Act 1956 Sales Tax 1.21 April 2013 to March 2015 The Value Added Tax Officer Ward-204 Delhi
Central Sales Tax Act 1956 Sales Tax 0.05 April 2014 to March 2016 The Commercial Tax Officer Special Circle-III Jaipur
Puducherry Value Added Tax Act 2007 Sales Tax 0.01 April 2008 to March 2009 and April 2011 to March 2012 Puducherry Value Added Tax Appellate Tribunal Puducherry
Delhi Value Added Tax Act 2004 Sales Tax 3.49 April 2014 to March 2015 The Value Added Tax Officer Ward-204 Delhi
Central Excise Act 1944 Excise Duty (including interest and penalty) 0.05 March 2009 to April 2010 Customs Excise And Service Tax Appellate Tribunal Chennai
Finance Act 1994 Service Tax (including interest and penalty) 3.80 April 2006 to June 2017 Customs Excise And Service Tax Appellate Tribunal Chennai

(viii) In our opinion and according to the information and explanations given to us andbased on the records of the Company examined by us the Company has not defaulted inrepayment of loans to banks. The Company has neither taken any loans or borrowings fromany financial institution or government during the year nor has it issued any debentures.

(ix) According to the information and explanations given to us and based on the recordsof the Company examined by us no monies were raised by way of initial public offer orfurther public offer (including debt instruments) or by way of term loans during the year.Accordingly reporting under Clause 3(ix) of the Order is not applicable to the company.

(x) During the course of our examination of the books and records of the companycarried out in accordance with generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstances of material fraud by the company or on the company by its officers or employeeswhich has been noticed or reported during the year nor have we been informed of any suchcase by the management.

(xi) According to the information and explanations given to us and based on the recordsof the Company examined by us managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

(xii) The Company is not a Nidhi Company. Accordingly reporting under Clause 3(xii) ofthe Order is not applicable to the company.

(xiii) According to the information and explanations given to us and based on therecords of the Company examined by us transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and the details thereofhave been duly disclosed in Note 33 to the standalone financial statements as required bythe applicable accounting standard.

(xiv) According to the information and explanations given to us and based the recordsof the Company examined by us the company has not made any preferential allotment/privateplacement of shares or fully or partially convertible debentures during the year underreview and hence the requirements of Section 42 of the Act are not Applicable.

(xv) According to the information and explanations given to us and based the records ofthe Company examined by us the company has not entered into any non-cash transactionswith directors or persons connected with the directors. Accordingly the reportingrequirements under clause 3(xv) of the Order is not applicable.

(xvi) According to the information and explanations given to us and the records of theCompany examined by us the company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934. Accordingly the reporting requirement underclause 3(xvi) of the Order is not applicable.

For Varma & Varma
Chartered Accountants
FRN004532S
P R Prasanna Varma
Place : Chennai Partner
Date : May 22 2019 M No.25854

Annexure‘B' to the Independent Auditor's Report

Referred to in paragraph under the heading "Report on Other Legal and RegulatoryRequirements" of our Independent Audit report of even date on the standalonefinancial statements of Rane Brake Lining Limited for the year ended March 31 2019

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

We have audited the internal financial controls over financial reporting of Rane BrakeLining Limited ("the Company") as of March 31 2019 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 company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

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 on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability 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 March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Varma & Varma
Chartered Accountants
FRN004532S
P R Prasanna Varma
Place : Chennai Partner
Date : May 22 2019 M No.25854