Home  »  Company  »  Bharat Electroni  »  Quotes  »  Auditor Report
Enter the first few characters of Company and click 'Go'

Auditor Report of Bharat Electronics Ltd.

Mar 31, 2016

We have audited the accompanying standalone financial statements of BHARAT ELECTRONICS LIMITED ("the Company"), which comprise the Balance Sheet as at 31 March 2016, the Statement of Profit and Loss and, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company''s branches at Ghaziabad, Panchkula, Kotdwara, Pune, Navi Mumbai and Machilipatnam.

In the light of observations arising in our Auditor''s Report from the audit of Comptroller & Audit General of India, our Independent Auditor''s Report dated 27 May 2016 has been revised to incorporate Annexure III, the directions of Comptroller & Audit General of India and our findings thereon.

This report supersedes our Independent Auditor''s Report dated 27 May 2016.

Management''s Responsibility for the Standalone financial statements

The Company''s Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

a) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2016.

b) in the case of the statement of profit and loss, of the profit for the year ended on that date; and

c) in the case of the cash flow statement, of the cash flows for the year ended on that date.

Other Matters

a) We did not audit the financial statements of six branches included in the standalone financial statements of the Company whose financial statements reflect total assets of Rs. 3,81,908.39 lakhs as at 31 March 2016 and total revenues of Rs. 1,81,023.18 lakhs for the year ended on that date, as considered in the standalone financial statements. The financial statements of these branches have been audited by the branch auditors, appointed by Comptroller & Audit General of India, whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these Units, is based solely on the report of such branch auditors.

b) We draw attention to Note No. 31(6) regarding disclosures required under Para 5 of Part II to Schedule III of the Companies Act, 2013 (under General Instructions for preparation of Statement of Profit and Loss) [erstwhile Para 5 of Part II to Schedule VI of the Companies Act, 1956 (under General Instructions for preparation of Statement of Profit and Loss)].

c) We draw attention to Note No. 31(12) regarding disclosure of segment information as required under AS-17.

Our opinion is not modified in respect of these matters.

Report on other Legal and Regulatory Requirements

1. As required by Companies (Auditor''s Report) Order, 2016, issued by the Central Government in terms of sub-section 11 of section 143 of the Companies Act, 2013 and based on the comments in the auditors'' report of the respective branches, we give in the annexure a statement on the matters specified in paragraph 3 and 4 of the Order to the extent applicable. (Annexure 1).

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 best of 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 the Company so far as it appears from our examination of those books. The audit of the accounts of Bangalore, Hyderabad and Chennai branches and Corporate Office has been carried out by us. In the case of New York and Singapore Offices and other offices not visited by us, and in respect of which the accounts are maintained at Corporate Office, the returns / records received from the said offices have been verified and found to be adequate for the purpose of our audit.

(c) The reports on the accounts of the Unit''s offices of the Company audited under Section 143 (8) of the Act by Branch auditors ( in respect of Ghaziabad, Panchkula, Kotdwara, Pune, Navi Mumbai and Machilipatnam Units) have been sent to us and have been properly dealt with, by us, in preparing this report.

d) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account of the Company.

e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

f) On the basis of the written representations received from the Directors as at 31 March 2016 taken on record by the Board of Directors, none of the Directors is disqualified as on 31 March 2016 from being appointed as a Director in terms of Section 164 (2) of the Act.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company''s financial statements and the operating effectiveness of such controls, a separate report is annexed (Annexure II).

h) With respect to the other matters to be included in the Auditor''s Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its standalone financial statements as at 31 March 2016 - Refer Note 31 (8) to the financial statements.

ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses.

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

3. As required under Section 143 (5) of the Act, which is applicable to the Company, findings on the directions issued by Comptroller and Auditor General of India is annexed (Annexure III).

Annexure I to the Independent Auditor''s report

The Annexure referred to in paragraph 1 in Report on Other Legal and Regulatory Requirements of the Independent Auditor''s Report of even date to the members of the company on the Standalone financial statements for the year ended March 31, 2016, We report that :

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of its fixed assets

(b) As explained to us and based on our examination of records, the Management has generally carried out the physical verification of a portion of the Fixed Assets in accordance with their phased programme of physical verification, which is considered reasonable, having regard to the size of the Company and nature of its fixed assets. In accordance with the programme, certain fixed assets were verified during the year and discrepancies, if any, were properly dealt with on such verification during the year. As informed to us, no material discrepancies have been noticed on such verification during the year.

(c) As explained to us and based on our examination of records, the title deeds of immovable properties are held in the name of the company. We draw your attention to Note No. 9 to the financial statements.

(ii) The raw materials, stores and spare parts, tools, work- in-progress, semi-finished goods and finished goods inventory (excluding stock with third parties and material in transit) have been physically verified by the management during the year. In our opinion, the frequency of verification is reasonable and adequate in relation to the size of the Company and the nature of its business.

As informed to us, no material discrepancies have been noticed on such verification. The discrepancies noticed on verification between the physical stocks and the book records have been properly dealt in the books of account.

In respect of materials with sub-contractors, confirmations have been received generally and reconciled with the book records. However, in case of such items for which no confirmations have been received, which are not significant, the company has dealt with the same by making adequate provision in the books of account

(iii) According to the information and explanations given to us, the Company has granted unsecured loan to one subsidiary company covered in the register maintained under section 189 of the Companies Act 2013 ("Act"). The Company has not granted loans to firms or other parties covered in the register maintained under Section 189 of the Act.

(a) According to the information and explanations given to us and based on the audit procedures conducted by us, we are of the opinion that the terms and conditions of loans granted by the company to it''s subsidiary covered in the register maintained under section 189 of the Companies Act, 2013 are not prejudicial to the company''s interest.

(b) In case of the loans granted to the Company listed in the register maintained under section 189 of the Act, the borrower has been regular in the payment of interest and repayment of principal as stipulated.

(c) There is no amount overdue for more than 90 days.

(iv) According to the information and explanations given to us, in respect of loans, investments, guarantees, and security, the provisions of section 185 and 186 of the Companies Act, 2013 are not applicable

(v) According to the information and explanations given to us, the Company has not accepted any deposit from public in the current year as per the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under.

All deposits have matured and settled except for Rs. 36.95 lakhs, out of which Rs. 36.50 lakhs is retained as per Garnishee Order of Lokayukta, Bangalore and the balance of Rs. 0.45 lakhs though matured is unpaid due to legal issues.

In our opinion and according to the information and explanations given to us and based on our examination of records, the Company has complied with the provisions of Section 73 and other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014.

(vi) The Company pursuant to sub-section (1) of section 148 of the Companies Act for the maintenance and audit of cost records prescribed by the Central Government has maintained cost records. We are of the opinion that, prima facie, the prescribed cost accounts and cost records have been made and maintained. However, we have not carried out any detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) (a) The Company is regular in remittance of undisputed statutory dues including Provident Fund, Employees'' State Insurance, Income- tax, Sales-tax, Service-tax, Custom Duty, Excise Duty, Cess and other applicable statutory dues. According to the information and explanation given to us, no undisputed statutory dues are outstanding as at 31 March 2016, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no disputed amounts that remain unpaid as at 31 March 2016 for a period of more than six months from the date they became payable in respect of Provident Fund, Employees'' State Insurance, Income-tax, Sales-tax, Service-tax, Custom Duty, Excise Duty, Cess and other applicable statutory dues with the exception of the following :

Financial year to Name of Statute Nature of Dues which amount relates

Sales Tax Act Sales Tax dues 1995-96 to 1997-98, 2005-2015

Sales Tax Act Sales Tax dues 2000-01

Central Sales tax Central Sales Tax (CST) 1980-81, 1991-92, Act 2005-06 to 2007-08, 2011-12

Central Excise Tax Excise Duty, Modvat 1991-92 Credit

Customs Act Customs Duty 2012-13

Customs Act Customs Duty -

Finance Act Service Tax 2007-08, 2009-10 1994- Service Tax

Finance Act Revisionary Showcause 2008-09 1994- Service Tax Notice

Vacant Land Tax Vacant Land Tax 1998-99 to 2003-04

Urban Land Tax Urban Land Tax 1984-85 to 2002-03

ESI Act, 1948 Interest and damages - towards late deposits

Total disputed amount

Total amount paid under protest pending final order

Name of Statute Amount Forum where dispute is (Rs. in Lakhs) pending

Sales Tax Act 4971.49 Various levels of Appellate authority

Sales Tax Act 361.16 Uttrakhand high court Nainital

Central Sales tax Act 2194.00 Various levels of Appellate authority

Central Excise Tax 38.56 Commissioner (Appeals)

Customs Act 103.52 CESTAT

Customs Act 123.23 Assistant Commissioner of Customs

Finance Act 1994 113.96 CESTAT

Finance Act 1994 34.01 Commissioner

Vacant Land Tax 10.35 Director, Directorate of Town Panchayat, Chennai

Urban Land Tax 41.44 Principal Commissioner and Commissioner of Land Reforms, Chennai.

ESI Act, 1948 3.52 Punjab and Haryana High Court, Chandigarh

Total disputed amount 7995.24

Total amount paid under protest pending final order 3426.90

(viii) On the basis of examination of records of the Company and information and explanations given to us, the Company has not defaulted in repayment of dues to a bank, financial institution or others.

(ix) The requirement relating to application of moneys raised by way of initial public offer or further public offer (including debt instruments) and term loans for the purposes for which they were raised are not applicable to the Company.

(x) During the course of our examination of the books of account and records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of fraud by the Company or any fraud on the Company or by its officers or employees has been noticed or reported during the year nor have we been informed of any such case by the Management, that causes the financial statements to be materially misstated.

(xi) According to the information and explanations given to us and based on the examination of records, the provisions in relation to disbursement of managerial remuneration is in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.

(xii) The provisions in relation to compliance of Nidhi Company with the Net Owned Funds to Deposits in the ratio of 1:20 to meet out the liability maintenance of ten per cent unencumbered term deposits as specified in the Nidhi Rules, 2014 to meet out the liability is not applicable to the Company.

(xiii) On the basis of examination of records of the Company and information and explanations given to us, all transactions with the related parties are in compliance with sections 177 and 188 of Companies Act,2013 and the details have been disclosed in the Financial Statements vide Note No. 31(14), as required by the applicable accounting standards.

(xiv) The provisions in relation to preferential allotment or private placement of shares or fully or partly convertible debentures during the year under pursuant to the requirement of section 42 of the Companies Act, 2013 are not applicable, since no such issues have been made by the Company.

(xv) According to the information and explanations given to us and on the basis of examination of records, the Company has not entered into any non-cash transactions with directors or persons connected with him and therefore, the provisions of section 192 of Companies Act, 2013 are not applicable.

(xvi) The requirement of registration under section 45-IA of the Reserve Bank of India Act, 1934 is not applicable to the Company.

For Badari, Madhusudhan & Srinivasan

Chartered Accountants

Firm Registration Number : 005389S

(S. RAJENDIRAN)

Bengaluru Partner

15 July 2016 Membership No. 021883


Mar 31, 2015

We have audited the accompanying standalone financial statements of BHARAT ELECTRONICS LIMITED ("the Company"), which comprise the Balance Sheet as at 31 March 2015, the Statement of Profit and Loss for the year then ended, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information, in which are incorporated the Returns for the year ended on that date audited by the branch auditors of the Company's branches at Ghaziabad, Panchkula, Kotdwara, Pune, Navi Mumbai and Machilipatnam.

Management's Responsibility for the Standalone financial statements

The Company's Board of Directors are responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditor's judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company's preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence obtained by us and the audit evidence obtained by the other auditors in terms of their reports referred to in sub-paragraph (a) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the standalone financial statements of the company for the year ended 31 March 2015 give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

a) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2015.

b) in the case of the statement of profit and loss, of the profit for the year ended on that date; and

c) in the case of the cash flow statement, of the cash flows for the year ended on that date.

Other Matters

a) We did not audit the financial statements of six branches included in the standalone financial statements of the Company whose financial statements reflect total assets of Rs. 280,137.10 lakhs as at 31 March 2015 and total revenues of Rs. 209,021.17 lakhs for the year ended on that date, as considered in the standalone financial statements. The financial statements of these branches have been audited by the branch auditors whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such branch auditors.

b) We draw attention to Note No. 30(6) regarding disclosures required under Para 5 of Part II to Schedule III of the Companies Act, 2013(under General Instructions for preparation of Statement of Profit and Loss) [erstwhile Para 5 of Part II to Schedule VI of the Companies Act, 1956(under General Instructions for preparation of Statement of Profit and Loss)].

c) We draw attention to Note No. 30(13) regarding disclosure of segment information as required under AS-17.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Companies (Auditor's Report) Order, 2015, issued by the Central Government in terms of sub-section 11 of section 143 of the Act and based on the comments in the auditors' report of the respective branches, we give in the annexure a statement on the matters specified in paragraph 3 and 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 best of 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 the Company so far as it appears from our examination of those books. The audit of the accounts of Bengaluru, Hyderabad and Chennai branches and Corporate Office has been carried out by us. In the case of New York and Singapore Offices and other offices not visited by us, and in respect of which the accounts are maintained at Corporate Office, the returns / records received from the said offices have been verified and found to be adequate for the purpose of our audit.

(c) The reports on the accounts of the branch offices of the Company audited under Section 143 (8) of the Act by branch auditors in respect of Ghaziabad, Panchkula, Kotdwara, Pune, Navi Mumbai and Machilipatnam branches have been sent to us and have been properly dealt with, by us in preparing this report.

d) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account and with the returns received from the branches not visited by us.

e) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

f) On the basis of the written representations received from the directors as at 31 March 2015, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2015 from being appointed as a director in terms of Section 164 (2) of the Act.

g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its standalone financial statements- Refer Note 30(8).

ii. We are given to understand that the Company does not have any long-term contracts including derivatives contracts for which there are any material foreseeable losses.

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

ANNEXURE REFERRED TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in Report on Other Legal & Regulatory Requirement)

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) As explained to us and based on our examination of records, the Management has generally carried out the physical verification of a portion of the Fixed Assets in accordance with their phased programme of physical verification, which is considered reasonable having regard to the size of the Company and nature of its business and discrepancies, if any, were properly dealt with on such verification during the year.

(ii) (a) The raw materials, stores and spare parts, tools, work-in-progress, semi-finished goods and finished goods inventory (excluding stock with third parties and material in transit) have been physically verified by the management. In our opinion, the frequency of verification is reasonable.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records, the Company is maintaining proper records of its inventories. The discrepancies noticed on verification between the physical stocks and the book records were not material, and has been dealt with properly in the books of account.

In respect of materials with sub-contractors, confirmations have been received generally and reconciled with the book records. However, in case of such items for which no confirmations have been received, which are not significant, the company has dealt with the same by making adequate provision in the books of account.

(iii) According to the information and explanations given to us, the Company has not granted any loans, secured or unsecured to companies, firms or other parties covered in the register maintained under section 189 of the Companies Act. Hence, clause (iii)(a) & (b) are not applicable.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate within the Company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods and services. During the course of our audit, no major weaknesses in the internal controls have been noticed.

(v) According to the information and explanations given to us, the Company has not accepted any deposit from public in the current year as per the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under. All deposits have matured and settled except for Rs. 36.95 lakhs, out of which Rs. 36.50 lakhs is retained as per Garnishee Order of Lokayukta, Bengaluru and the balance of Rs. 0.45 lakhs though matured is unpaid due to legal issues.

In our opinion and according to the information and explanations given to us and based on our examination of records, the Company has complied with the provisions of Section 73 and other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 2014.

(vi) The Company pursuant to sub-section (1) of section 148 of the Companies Act for the maintenance and audit of cost records prescribed by the Central Government has maintained cost records. We are of the opinion that prima facie the prescribed cost accounts and cost records have been made and maintained. We have not however made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(vii) (a) The Company is regular in remittance of undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-tax, Sales-tax, Service-tax, Custom Duty, Excise Duty, Cess and other applicable statutory dues. According to the information and explanation given to us, no undisputed statutory dues are outstanding as at 31 March 2015, for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, there are no disputed amounts that remain unpaid as at 31 March 2015 for a period of more than six months from the date they became payable in respect of Provident Fund, Employees' State Insurance, Income-tax, Sales-tax, Service-tax, Custom Duty, Excise Duty, Cess and other applicable statutory dues with the exception of the following :

Financial year to which amount Name of Statute Nature of Dues relates (Rs. in Lakhs)

Sales Tax Act, Bihar Sales Tax 1995-97



Central Sales Sales Tax 2005-06 to 2012-13 Act,1956

Karnataka VAT Act, Sales Tax 2006-07 to 2011-12 2003

Finance Act 1994 Service Tax 2009-10 Service Tax

Finance Act 1994 Revisionary Show 2008-09 Service Tax cause Notice

Central Excise Act Modvat credit 1991-92

Central Excise Act Excise Duty 1991-92

Central Excise Tax Excise duty 1991-92

Central Excise Tax Excise duty 1991-92

Customs Act Custom Duty 2012-13

VAT Act APVAT 2005-06 to 2007-08

VAT Act APVAT 2013-14

CST CST 2005-06 to 2007-08

CST CST 2011-12

Finance Act Service Tax 2007-08 1994- Service Tax

Sales Tax Act Sales Tax 2007-08 to 2009-10

Vacant Land Tax Vacant Land Tax 1998-99 to 2003-04

Urban Land Tax Urban Land Tax 1984-85 to 2002-03



Sales Tax Sales Tax dues & benefit of 1980-81 Concessional Form C

Name of Statute Amount Forum where dispute is pending

Sales Tax Act, 66.44 Commissioner of Bihar Commercial Tax (Appeals), Chirkunda,Bihar

Central Sales Act,1956 1,683.63 JC(Appeals)

Karnataka VAT Act, 554.11 JC(Appeals) 2003

Finance Act 1994 Service Tax 103.38 CESTAT

Finance Act 1994 34.01 Commissioner Service Tax

Central Excise Act 23.65 Dy. Commissioner

Central Excise Act 6.04 Commissioner (Appeals)

Central Excise Tax 8.67 Commissioner

Central Excise Tax 0.20 Commissioner

Customs Act 103.52 CESTAT

VAT Act 46.58 Sales Tax Appellate Tribunal

VAT Act 134.10 ADC (Appeals)

CST 1,346.14 Sales Tax Appellate Tribunal

CST 834.73 ADC (Appeals)

Finance Act 10.58 CESTAT 1994- Service Tax

Sales Tax Act 48.00 Appellate Authority

Director, Directorate Vacant Land Tax 10.35 of Town Panchayat, Chennai

Principal Commissioner 41.44 and Commissioner of Urban Land Tax Land Reforms, Chennai.

Case remanded to Sales Tax 8.63 Deputy Commissioner (Appeal)

Financial year to which amount Name of Statute Nature of Dues relates (Rs. in Lakhs)



Sales Tax Benefit of concessional 1989-90 Form D not allowed

Sales Tax Acceptance of Duplicate 1991-92 Copy of 3D(1)

ESI ACT,1984 Interest and damage to 1996-97 late deposit

Sales Tax Act Sales Tax Act 2008-09

2009-10

2008-09

Sales Tax Trade Tax dues 2001-02

Sales Tax Trade Tax dues 2000-01

Uttrakhand high court Nainital

Total disputed amount

Total amount paid under protest pending final order

Name of Statute Amount Forum where dispute is pending



Sales Tax 2.47 Case remanded to AC(Appeal)

Sales Tax 1.32 Appeal Filed with DC (Appeal) for acceptances of duplicate copy of 3D(1)

ESI ACT,1984 3.52 Punjab & Haryana High Court Chandigarh

Sales Tax Act 260.48 Joint commissioner (Appeals)

242.89 Joint commissioner (Appeals)

112.93 Dy. Commissioner (Appeals)

Sales Tax 220.08 Uttrakhand high court Nainital

Sales Tax 141.08

Total disputed amount 6048.99 Total amount paid under protest pending final order 1068.25

(c) The requirement of transfer to investor education and protection fund is in accordance with the relevant provisions of the Companies Act, 1956 (1 of 1956) and rules made thereunder.

(viii) The Company does not have any accumulated losses as at the end of the financial year and has not incurred cash losses during the financial year and in the immediately preceding financial year.

(ix) On the basis of examination of records of the Company and information and explanations given to us, the Company has not defaulted in repayment of dues to a bank, financial institution or others

(x) According to the information and explanations given to us, the Company has not given any guarantees for loan taken by others from a bank or financial institution.

(xi) The Company has not availed any term loan and hence, this clause is not applicable.

(xii) During the course of our examination of the books of account and records of the Company, carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company, noticed or reported, during the year nor have we been informed of any such case by the Management, that causes the standalone financial statements to be materially misstated.

For Badari, Madhusudhan & Srinivasan Chartered Accountants Firm Registration Number : 005389S

N. SRINIVASAN Bengaluru Partner 29 May 2015 Membership No. 027887


Mar 31, 2014

We have audited the accompanying financial statements of Bharat Electronics Limited ("Company") which comprise the balance sheet as at 31 March 2014, the statement of profit and loss for the year then ended and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements of the Company for the year ended 31 March 2014 give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

a) in the case of the balance sheet, of the state of affairs of the Company as at 31 March 2014.

b) in the case of the statement of profit and loss, of the profit for the year ended on that date; and

c) in the case of the cash flow statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order"), as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph above and as required by Section 227 (3) of the Act, we report that :

(a) we have obtained all the information and explanations which to the best of 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 the Company so far as it appears from our examination of those books. The audit of the accounts of Bangalore, Hyderabad and Chennai units and Corporate Office were carried out by us. In the case of New York and Singapore Offices, not visited by us, and in respect of which the accounts are maintained at Corporate Office, the returns / records received from the said offices have been verified and found to be adequate for the purpose of our audit.

(bb) the report on the audit of branch offices audited under section 228 of the Act, in respect of Ghaziabad, Panchkula, Kotdwara, Pune, Navi Mumbai and Machilipatnam units, by respective branch auditors has been forwarded to us under section 228 (3) (c) of the Act and have been dealt with in preparing our Report in the manner considered necessary by us.

(c) the balance sheet, statement of profit and loss and cash flow statement dealt with by this report are in agreement with the books of account.

(d) in our opinion, the balance sheet, statement of profit and loss and cash flow statement dealt with by this Report comply with the accounting standards referred to in Section 211 (3C) of the Act, read with General Circular 15/2013 dated 13 September 2013 of the Ministry of Corporate Affairs in respect of section 133 of the Companies Act, 2013, and clause 13 of Note 30 regarding Segment Reporting.

(e) as the Company is a Government Company, it is exempted from the provisions of Section 274(1)(g) of the Act regarding disqualification of Directors vide Notification GSR 829(E) dated 21 October 2003 issued by the Ministry of Finance, Department of Company Affairs.

ANNEXURE TO THE INDEPENDENT AUDITOR''S REPORT [Referred to in Report on Other Legal and Regulatory Requirements]

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) As explained to us and based on our examination of records, the Management has generally carried out the physical verification of the Fixed Assets in accordance with their phased programme of physical verification, which is considered reasonable having regard to the size of the Company and nature of its business and discrepancies, if any, were properly dealt with on such verification during the year.

c) Fixed assets sold/disposed off during the year were not substantial and therefore do not affect the going concern assumption.

(ii) (a) The raw materials, stores and spare parts, tools, work-in-progress, semi-finished goods and finished goods inventory, excluding stocks with third parties and materials in transit, have been physically verified by the Management. In our opinion, the frequency of verification is reasonable.

(b) The procedures for physical verification of inventory followed by the management are generally reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and has been dealt with properly in the books of account.

In respect of materials with sub-contractors, confirmations have been received generally and reconciled with the book records. However, in case of such items for which no confirmations have been received, which are not significant, the company has dealt with the same by making adequate provision in the books of account.

(iii) The Company has not granted / taken any loans secured or unsecured to / from parties covered in the register maintained under Section 301 of the Act and hence, Clause No. 4 (iii) of the Order, as amended, is not applicable.

(iv) In our opinion and according to the information and explanations given to us and based on our examination of records, there are adequate internal control systems commensurate with the size of the Company and nature of its business with regard to purchase of Inventory and Fixed Assets and with regard to the Sale of Goods and Services. During the course of audit, we have not observed any continuing failure to correct major weakness in the internal control systems.

(v) In our opinion and according to the information and explanations given to us, there are no contracts or arrangements referred to in section 301 of the Act, that need to be entered in the register required to be maintained under that section.

(vi) The Company has not accepted any deposit from public in the current year and all deposits had matured and settled except for Rs. 36.95 lakhs, out of which Rs. 36.50 lakhs are being retained as per Garnishee Order of Lok Ayukta, Bangalore and the balance ofRs. 0.45 lakhs though matured is unpaid due to other legal issues. In our opinion and according to the information and explanations given to us and based on our examination of records, the Company has complied with the provisions of Section 58A and Section 58AA and other relevant provisions of the Act and the Companies (Acceptance of Deposits) Rules, 1975.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(viii) The Company pursuant to the Companies (Cost Accounting) Rules, 2011 made by the Central Government for the maintenance and audit of cost records under section 209 (1) (d) of the Act, has maintained cost records. We are of the opinion that prima facie the prescribed cost accounts and cost records have been made and maintained. We have not however made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax (VAT), Service Tax, Customs Duty, Excise Duty and other applicable material statutory dues.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax (VAT), Service Tax, Customs Duty, Excise Duty were in arrears, as at 31 March 2014 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and based on our examination of records, there were no dues in respect of Income Tax, Sales Tax (VAT), Wealth Tax, Service Tax, Customs Duty and Excise Duty which have not been deposited with the appropriate authorities on account of any dispute except as follows :

Amount Nature of Nature of Forum where (Rs. in Statute Dues dispute is pending Lakhs )

Sales Tax Sales Tax Commissioner 66.44 Act, Bihar of Commercial Tax (Appeals), Chirkunda, Bihar

Central Sales Sales Tax Joint Commissioner 1,970.85 Act (Appeals)

Karnataka Sales Tax Joint Commissioner 501.02 VAT Act (Appeals)

Karnataka Sales Tax Dy. Commissioner 156.01 VAT Act of Commercial Tax

Finance Act Service Tax CESTAT 103.38

Finance Act Service Tax- Commissioner 34.01 Revisionary Show Cause Notice

Central Modvat Credit Dy. Commissioner 23.65 Excise Act

Central Excise Duty Commissioner 6.04 Excise Act (Appeals)

Central Excise Duty Commissioner 8.67 Excise Act

Customs Act Custom Duty CESTAT 103.52 Trade Tax Benefit of Uttarakhand High 220.07 Concessional Court, Nainital Form not allowed

Trade Tax Benefit of Uttarakhand High 141.09 Concessional Court, Nainital form not allowed

Income Tax TDS u/s 194 High court of 73.32 Act I against Allahabad deduction made u/s 194C

Income Tax Penalty u/s High court of 63.21 Act 201 A passed Allahabad by DCIT

Central Sales Sales Tax Deputy 8.63 Tax Act dues & Commissioner benefit of (Appeals) Concessional Form C

Central Sales Benefit of Assistant 2.47 Tax Act Concessional Commissioner Form D not (Appeals) allowed (1989-90)

U.P. Trade Acceptance DC (Appeals) 1.32 Tax Act of duplicate copy of 3D(1)

ESI Act Interest & Punjab & Haryana 3.52 Damages High Court, towards late Chandigarh deposit

Central Sales Central Sales Sales Tax Appellate 1,346.14 Tax Act Tax Tribunal

The Andhra AP VAT Sales Tax Appellate 46.58 Pradesh Tribunal Value Added Tax Act

Finance act Service Tax CESTAT-Bangalore 10.58

Urban land Land Tax Principal 41.44 Tax Commissioner and commissioner Land Reform Chennai

Vacant Land Land Tax Director, 10.35 Tax Directorate of Town Panchayath, Chennai

Tamil Nadu Sales Tax Sales Tax Appellate 48.00 Sales Tax Authorities

Income Tax Income Tax Income Tax 264.50 Act Appellate Tribunal

Income Tax Income Tax Commissioner 6,956.44 Act of Income Tax (Appeals)

(x) The Company does not have any accumulated losses as at the end of the financial year and has not incurred cash losses during the financial year and in the immediately preceding financial year.

(xi) In our opinion and based on our examination of records, the Company has not defaulted in repayment of dues to banks.

(xii) In our opinion and based on our examination of records, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and others securities.

(xiii) The Company is not a chit fund / nidhi /mutual benefit fund/ society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Order, as amended, are not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause (xiv) of the Order, as amended, are not applicable to the Company.

(xv) According to the information and explanations given to us and the representations made by the Management, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) The Company has not availed any term loan and hence, clause 4 (xvi) of the Order, as amended, is not applicable.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment.

(xviii) The Company has not made preferential allotment of shares to parties covered in the register maintained under section 301 of the Act.

(xix) The Company has not issued any debentures during the year.

(xx) The Company has not raised any money by Public Issues and hence clause (xx) of the Order, as amended, is not applicable to the Company.

(xxi) During the course of our examination of the books of account and records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company noticed or reported during the year nor have we been informed of any such case by the Management, that causes the financial statements to be materially misstated.

For Badari, Madhusudhan & Srinivasan

Chartered Accountants Firm Registration Number: 005389S

N.K. Madhusudhan

Bangalore Partner

30 May 2014 Membership No. 020378


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Bharat Electronics Limited ("Company"), which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss for the year then ended and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and Cash Flows of the Company in accordance with the Accounting Standards referred to in sub- section (3C) of Section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis of our audit opinion.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements of the Company for the year ended March 31, 2013 give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) In the case of the Balance sheet, of the state of affairs of the Company as at March 31, 2013.

b) In the case of the Statement of Profit and Loss, of the Profit for the year ended on that date; and

c) In the case of the Cash Flow Statement, of the Cash Flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors'' Report) Order, 2003, as amended by the Companies (Auditors'' Report) Order, 2004 (hereinafter referred to as "the Order") issued by the Central Government of India in terms of section 227(4A) of the Companies Act,l956, we give in the Annexure, a statement on the matters specified in paragraphs 4 and 5 of the said Order.

2. Further to our comments in the Annexure referred to in paragraph above and as required by Section 227(3) of the Act, we report that:

(a) We have obtained all the information and explanations which to the best of 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 the Company in so far as it appears from our examination of those books. The audit of the accounts of Bangalore, Hyderabad and Chennai Unit and Corporate Office were carried out by us, whilst the audit of Ghaziabad, Panchkula, Kotdwara, Pune, Navi Mumbai and Machilipatnam units were audited by respective branch auditors. The reports of branch auditors have been considered by us while preparing our report. In the case of New York and Singapore Offices, not visited by us, in respect of which the accounts are maintained at Corporate Office, the returns / records received from the said offices have been verified and found to be adequate for the purpose of our audit. We further state that the disclosure in Clause 15 of Note 31 of Company''s share of Assets, Liabilities, Income and Expenses in the joint ventures is based on audited financial statements of GE BE Private Limited and audited financial statements of BEL Multitone Private Limited as provided by the respective operators of Joint Ventures.

(c) the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account of this Company.

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report comply with the accounting standards referred to in Section 211 (3C) of the Companies Act, 1956 read with Section 211 (3B) of the Companies Act, 1956 and Clause 12 of Note 31 regarding Segment Reporting.

(e) As the Company is a Government Company, it is exempted from the provisions of Section 274(l)(g) of the Companies Act, 1956 regarding disqualification of Directors vide Notification GSR 829(E) dated 21st October 2003 issued by the Ministry of Finance, Department of Company Affairs.

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) As explained to us and based on our examination of records, the Management has generally carried out the physical verification of a portion of the Fixed Assets in accordance with their phased programme of physical verification, which is considered reasonable having regard to the size of the Company and nature of its business and discrepancies, if any, were properly dealt with on such verification during the year.

(c) During the year, the Company has not disposed off substantial portion of the Fixed Assets.

(ii) (a) The Raw Materials, Stores and Spare Parts, Tools, Work in Progress and Semi - Finished Goods inventory (excluding stocks with third parties and materials in transit) have been physically verified by the Management. In our opinion, the frequency of verification is reasonable. In case of finished goods, stock verification was done at year end. We draw attention towards non - adjustment of the discrepancies noticed on physical verification of inventory as compared to the book records as given in Note No. 18(ii).

(b) The procedures for physical verification of inventory followed by the management are generally reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material, and the differences are under reconciliation. In the case of materials with sub - contractors confirmation from certain sub - contractors were not obtained and in this regard we draw attention to Note No. 18(i).

(iii) The Company has not granted / taken any loans secured or unsecured to / from parties covered in the register maintained under Section 301 of the Companies Act, 1956 and hence, Clause No. 4 (iii) of Companies Audit Report Order, 2003 as amended in 2004, is not applicable.

(iv) In our opinion and according to the information and explanations given to us and based on our examination of records, there are adequate internal control systems commensurate with the size of the Company and nature of its business with regard to purchase of Inventory and Fixed Assets and with regard to the Sale of Goods and Services. During the course of audit, we have not observed any continuing failure to correct major weakness in these internal control systems.

(v) In our opinion and according to the information and explanations given to us, there are no contracts or arrangements referred to in section 301 of the Companies Act, 1956 that need to be entered in the register required to be maintained under that section.

(vi) The Company has not accepted any deposit from public in the current year and all deposits had matured and settled except for Rs. 36.95 lakhs, out of which Rs. 36.50 lakhs are being retained as per Garnishee Order of Lokayukta, Bangalore and the balance of Rs. 0.45 lakhs though matured have not been claimed by depositors. In our opinion and according to the information and explanations given to us and based on our examination of records, the Company has complied with the provisions of Section 58A and Section 58AA and other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

(vii) In our opinion, the Company has an internal audit system commensurate with its size and nature of its business.

(viii) The Company pursuant to the Companies (Cost Accounting) Rules, 201 1 made by the Central Government for the maintenance and audit of cost records under section 209(1)(d) of the Act, has maintained cost records. We are given to understand that the Cost Audit has been ordered with effect from financial year 2012 - 13 and the audit is scheduled in June 201 3. We are of the opinion that prima facie the prescribed cost accounts and cost records have been made and maintained. We have not, however, made a detailed examination of the cost records with a view to determine whether they are accurate or complete.

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income Tax, Sales Tax (VAT), Service Tax, Customs Duty, Excise Duty and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Sales Tax (VAT), Service Tax, Customs Duty, Excise Duty were in arrears, as at March 3 1, 201 3 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us and based on our examination of records, there were no dues in respect of Income Tax, Sales Tax (VAT), Wealth Tax, Service Tax, Customs Duty and Excise Duty which have not been deposited with the appropriate authorities on account of any dispute except as follows:

(x) The Company does not have accumulated losses as at the end of the financial year and has not incurred Cash losses during the financial year and in the immediately preceding financial year.

(xi) In our opinion and based on our examination of records, the Company has not defaulted in repayment of dues to banks.

(xii) In our opinion and based on our examination of records, the Company has not granted any loans and advances on the basis of security by way of pledge of shares, debentures and others securities.

(xiii) The Company is not a chit fund or a nidhi /mutual benefit fund/ society. Therefore, the provisions of clause (xiii) of paragraph 4 of the Companies (Auditor''s Report) Order, 2003 is not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause (xiv) of Companies (Auditor''s Report) Order, 2003 are not applicable to the Company.

(xv) According to the information and explanations given to us and the representations made by the Management, the Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) The Company has not availed any term loan and hence, clause 4 (xvi) of Companies (Auditor''s Report) Order, 2003 is not applicable.

(xvii) According to the information and explanations given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment.

(xviii) The Company has not made preferential allotment of shares to parties covered in the register maintained under section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures.

(xx) The Company has not raised any money by Public Issues and hence clause (xx)of Companies (Auditor''s Report) Order, 2003, is not applicable to the Company.

(xxi) During the course of our examination of the books of account and records of the Company carried out in accordance with the generally accepted auditing practices in India and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company noticed or reported during the year nor have we been informed of any such case by the Management, that causes the financial statements to be materially misstated. For R G N Price & Co

Chartered Accountants

Firm Regn. No. 002785S

R M Kamath

Bangalore Partner

30 May 2013 Membership No. 022907


Mar 31, 2012

1. We have audited the attached Balance Sheet of Bharat Electronics Limited as at 31 March 2012, the Statement of Profit and Loss and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (as amended) issued by the Central Government in terms of sub-section (4A) of section 227 of the Companies Act, I956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in Paragraph 3 above, we report that:

a. We have obtained all the information and explanations which to the best of 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 the Company in so far as it appears, from our examination of those books. The audit of the accounts of Bangalore, Hyderabad and Chennai Units and Corporate Office were carried out by us, whilst the audit of Ghaziabad, Panchkula, Kotdwara, Pune, Navi Mumbai and Machilipatnam units were audited by respective branch auditors. The reports of branch auditors have been considered by us while preparing our report. In the case of New York and Singapore Offices, not visited by us, in respect of which the accounts are maintained at Corporate Office, the returns / records received from the said offices have been verified and found to be adequate for the purpose of our audit. We further state that the disclosure in Clause I5 of Note 3I of Company's share of Assets, Liabilities, Income and Expenses in the joint ventures is based on audited financial statements of GE BE Private Limited and audited financial statements of BEL Multitone Private Limited as provided by the respective operators of Joint Ventures.

c. The Balance Sheet and the Statement of Profit and Loss and Cash Flow Statement dealt with by this report, are in agreement with the books of accounts of this Company;

d. In our opinion, the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 2II(3C) of the Companies Act, I956, read with Section 2II(3B) of the Companies Act, I956 and Clause I2 of Note 3I regarding Segment Reporting.

e. As the Company is a Government Company, it is exempted from the provisions of Section 274(I)(g) of the Companies Act, I956 regarding disqualification of Directors vide Notification GSR 829(E) dated 21 October 2003 issued by Ministry of Finance, Department of Company Affairs.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and the Notes forming part of accounts give the information required by the Companies Act, I956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

i) In the case of the Balance Sheet, of the State of Affairs of the Company as at 3I March 20I2.

ii) In the case of the Statement of Profit and Loss, of the Profit of the Company, for the year ended on that date.

iii) In the case of Cash Flow Statement, of the Cash Flow for the year ended on that date.

Annexure referred to in Para 3 of our report of even date on the Accounts of Bharat Electronics Limited for the year ended 31 March 2012

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of Fixed Assets.

(b) As explained to us, the Management has generally carried out the physical verification of a portion of the Fixed Assets in accordance with their phased programme of physical verification, which is considered reasonable having regard to the size of the Company and nature of its business and discrepancies, if any, were properly dealt with on such verification during the year.

(c) During the year, the Company has not disposed off substantial portion of the Fixed Assets.

(ii) (a) The Raw Materials, Stores and Spare Parts, Tools, Work in Progress and Semi-Finished Goods inventory with the Company have been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable. In case of finished goods, stock verification was done at year end.

(b) The procedures of physical verification of Raw Material inventories followed by the Management are generally reasonable and adequate in relation to the size of the Company and nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been appropriately dealt in the books. In the case of materials with sub -contractors confirmation from certain sub - contractors were not obtained and in this regard please refer Note No. 18 ( i ) and 18 ( ii ).

(iii) The Company has not granted / taken any loans to / from parties covered in the register maintained under Section 301 of the Companies Act, 1956 and hence, Clause No. 4

(iii) of Companies Audit Report Order, 2003 as amended in 2004, is not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchases of Inventory, Fixed Assets and with regard to the Sale of Goods and Services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

(v) According to the information and explanations given to us, we are of the opinion that there are no transactions that need to be entered in register maintained under Section 301 of the Companies Act, 1956.

(vi) Company has not accepted any deposit from public in the current year and all deposits had matured and settled except for Rs. 38.55 lakhs, out of which Rs. 36.50 lakhs are being retained as per Garnishee Order of Lok Ayukta, Bangalore and the balance of Rs. 2.05 lakhs though matured have not been claimed by depositors. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58 A and 58 AA and other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) The Company pursuant to the Companies (Cost Accounting) Rules 201 I made by the Central Government for the maintenance of cost records under Section 209(I)(d) of the Companies Act, 1956 has maintained cost records and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not, however, made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax (VAT), Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Service Tax, Sales Tax (VAT), Customs Duty, Excise Duty and Cess were in arrears, as at 3 I March 201 2 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of Income Tax, Service Tax, Sales Tax (VAT), Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute except as follows :

Amount Nature of Nature of Forum where disputed Statute Dues dispute is pending (Rs.in Lakhs)

The Central Excise Duty 64.90 Customs, Excise Excise Act, and Service Tax I944 Appellate Tribunal, New Delhi

57.26 CESTAT, Bangalore

49.17 Commissioner (Appeals), Bangalore

UP Trade Tax Benefit of 2.03 Ist Appellate Act, I948 Concessional Authority Form 3D not allowed

Acceptance 1.22 DC (Appeals) of Duplicate Copy of Form 3D(I)

Central Sales Sales Tax 8.18 Deputy Tax, Act I956 Commissioner (Appeal)

Benefit of 2.30 AC (Appeal) Concessional Form C

Central Sales 530.06 Sales Tax Appeallate Tax Tribunal

Trade Tax Benefit of 220.08 Uttarakhand High concessional Court, Nainital form not allowed

ESI Act, I948 Interest and 3.52 Punjab and Haryana Damages High Court, towards late Chandigarh deposit.

Sales Tax Act, Sales Tax 66.44 Commissioner of Bihar Commercial Taxes (Appeals), Chirkunda, Bihar

AP Sales Tax Sales Tax 10.83 DC (Appeals) Secundarabad Division, Hyderabad

The Andhra AP VAT 26.04 Sales Tax Appellate Pradesh Value Tribunal Added Tax Act

Karnataka Sales Tax 3,287.41 JC (Appeals) Sales Tax Act Bangalore

Service Tax Service Tax 103.38 Commissioner (Appeals), Bangalore

Service Tax 10.58 CESTAT Bangalore

Interest and 2.58 Commissioner Penalty on (Appeals),

Service Tax Bangalore

Urban Land Land Tax 41.44 Principal Tax Commissioner and Commissioner Land Reforms, Chennai

Vacant Land Land Tax 10.35 Director, Tax Directorate of Town Panchayat, Chennai

Employees Provident 17.58 Regional Provident Provident Fund Fund Commissioner Fund and and Recovery Officer Miscellaneous Provision Act, 1952

(x) The Company does not have accumulated losses as at the end of the financial year and has not incurred Cash losses during the financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to banks.

(xii) According to the information furnished to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4 (xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4 (xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xv) The Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) The Company has not availed any term loan and hence, clause 4 (xvi) of Companies (Auditor's Report) Order, 2003 is not applicable.

(xvii) According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment.

(xviii) The Company has not made preferential allotment of shares to parties covered in the register maintained under Section 30I of the Companies Act, I956.

(xix) The Company has not issued any debentures.

(xx) The Company has not raised money by Public Issues and hence clause 4(xx) of Companies (Auditor's Report) Order, 2003 is not applicable to the Company.

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company noticed or reported during the year nor have we been informed of any such case by the Management, that causes the financial statements to be materially misstated.

For R G N Price & Co

Chartered Accountants

Firm Regn. No. 002785S

R M Kamath

Bangalore Partner

21 June 2012 Membership No. 022907


Mar 31, 2011

1. We have audited the attached Balance Sheet of Bharat Electronics Limited as at 31st March 2011, the Profit and Loss Account and also the Cash Flow Statement for the year ended on that date annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit.

2. We conducted our audit in accordance with auditing standards generally accepted in India. Those Standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

3. As required by the Companies (Auditor's Report) Order, 2003 (as modified on 25 Nov 2004) issued by the Central Government in terms of sub-section (4A) of section 227 of the Companies Act, 1956, we enclose in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the said Order.

4. Further to our comments in the Annexure referred to in Paragraph 3 above, we report that:

a. We have obtained all the information and explanations which to the best of 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 the Company in so far as it appears, from our examination of those books. The audit of the accounts of Bangalore, Hyderabad and Chennai Units and Corporate Office were carried out by us, whilst the audit of Ghaziabad, Panchkula, Kotdwara, Pune, Navi Mumbai and Machilipatnam units were audited by respective branch auditors. The reports of branch auditors have been considered by us while preparing our report. In the case of New York and Singapore offices, not visited by us, in respect of which the accounts are maintained at Corporate Office, the returns / records received from the said offices have been verified and found to be adequate for the purpose of our audit. We further state that the disclosure in Note No. 23 of Schedule 21 of Company's share of Assets, Liabilities, Income and Expenses in the Joint ventures is based on audited financial statements of GE BE Pvt. Ltd. and audited financial statements of BEL Multitone Pvt. Ltd., as provided by the respective operators of Joint Ventures.

c. The Balance Sheet and the Profit and Loss Account and Cash Flow Statement dealt with by this report, are in agreement with the books of accounts of this Company ;

d. In our opinion, the Balance Sheet, Profit and Loss Account and Cash Flow Statement dealt with by this report comply with the accounting standards referred to in Section 211(3C) of the Companies Act, 1956, read with Section 211(3B) of the Companies Act, 1956 and Item No. 18 on Notes on Accounts regarding Segment Reporting.

e. As the Company is a Government Company, it is exempt from the provisions of Section 274 (1) (g) of the Companies Act, 1956 regarding disqualification of directors.

f. In our opinion and to the best of our information and according to the explanations given to us, the said accounts read together with the Significant Accounting Policies and the Notes forming part of accounts give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India :

i) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2011,

ii) In the case of the Profit and Loss Account, of the Profit of the Company, for the year ended on that date.

iii) In the case of Cash Flow Statement, of the Cash Flow for the year ended on that date.

Annexure referred to in Para 3 of our report of even date on the Accounts of Bharat Electronics Limited, for the year ended 31st March 2011

(i) (a) The Company has generally maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) As explained to us, the Management has generally carried out the physical verification of a portion of the Fixed Assets in accordance with their phased programme of physical verification, which is considered reasonable having regard to the size of the Company and nature of its business and discrepancies, if any, were properly dealt with on such verification during the year.

(c) During the year, the Company has not disposed off substantial portion of the Fixed Assets.

(ii) (a) The Raw material, Stores and Spare Parts, Tools, Work in Progress and Semi - Finished goods inventory with the Company have been physically verified during the year by the Management. In our opinion, the frequency of verification is reasonable. In case of finished goods, stock verification was done at year end.

(b) The procedures of physical verification of Raw Material inventories followed by the Management are generally reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The Company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been appropriately dealt in the books. In the case of materials with sub-contractors confirmations from certain sub-contractors were not obtained and in this regard please refer Item No. 9(a) of Notes to Accounts.

(iii) The Company has not granted / taken any loans to / from parties covered in the register maintained under Section 301 of the Companies Act, 1956 and hence, Clause No. iii of Companies Audit Report Order, 2003, as amended in 2004, is not applicable.

(iv) In our opinion and according to the information and explanations given to us, there are adequate internal control systems commensurate with the size of the Company and the nature of its business with regard to purchases of inventory, fixed assets and with regard to the sale of goods and services. During the course of our audit, we have not observed any continuing failure to correct major weaknesses in internal control system.

(v) According to the information and explanations given to us, we are of the opinion that there are no transactions that need to be entered in register maintained under Section 301 of the Companies Act, 1956.

(vi) Company has not accepted any deposit from public in the current year and all deposits had matured and settled except for Rs. 38.55 Lakhs, out of which Rs. 36.50 lakhs are being retained as per Garnishee Order of Lok Ayukta, Bangalore and the balance Rs. 2.05 lakhs though matured have not been claimed by the depositors. In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of Section 58A and 58AA and other relevant provisions of the Companies Act, 1956 and the Companies (Acceptance of Deposits) Rules, 1975.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business.

(viii) The Company pursuant to the Rules made by the Central Government for the maintenance of cost records under section 209 (1) (d) of the Companies Act, 1956 has to maintain cost records for Electronic Products and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. However, we have not made a detailed scrutiny of the same.

(ix) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees' State Insurance, Income Tax, Sales Tax (VAT), Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it.

(b) According to the information and explanations given to us, no undisputed amounts payable in respect of Income Tax, Service Tax, Sales Tax(VAT), Customs Duty, Excise Duty and Cess were in arrears, as at 31st March 2011 for a period of more than six months from the date they became payable.

(c) According to the information and explanations given to us, there are no dues of Income Tax, Service Tax, Sales

Tax(VAT), Customs Duty, Excise Duty and Cess which have not been deposited on account of any dispute except as follows :

Amount

Nature of Nature of Forum where dispute disputed Statute Dues is pending (Rs. in Lakhs)

The Central Excise Duty 64.90 Customs, Excise and Excise Act, 1944 Demand Service Tax Appellate Tribunal, New Delhi

57.26 CESTAT

49.85 Commissioner (Appeals)

U.P. Trade Tax Benefit of 1.97 Case remanded to Act, 1948 Concessional 1st Appellate Authority Form 3D not allowed (Year 1979-80)

U.P. Trade Tax Benefit of 1.17 Appeal filed with DC Act, 1948 Concessional (Appeals) for acceptance Form 3B and of Duplicate Copy of 3D not allowed 3D(1) (Year 1991-92)

Central Sales Tax Sales Tax dues 7.95 Case remanded to Act, 1956 and benefit of Deputy Commissioner Concessional (Appeal) Form C (Year 1980-81)

Central Sales Tax Benefit of 2.21 Case remanded to AC Act, 1956 Concessional (Appeal) Form D not allowed (Year 1989-90)

Central Sales Tax Central Sales Tax 482.09 Sales Tax Appellate Act, 1956 Tribunal

Income Tax (TDS) Applicability of 73.37 Income Tax Appellate 194 Cor 194 I Tribunal, Delhi (Financial Year 2007-08 and 2008-09)

ESI Act, 1948 Interest and 3.52 Punjab and Haryana damage towards High Court, Chandigarh late deposit.

Sales Tax Act, Sales Tax 66.44 Commissioner of Bihar Commercial Taxes (Appeals), Chirkunda, Bihar

AP. Sales Tax Sales Tax 21.66 DC (Appeals), Secundarabad Division, Hyderabad

Karnataka Sales Tax Sales Tax 1,584.99 JC (Appeals), Bangalore

Service Tax Service Tax 8.42 Commissioner (Appeals)

Service Tax Service Tax 34.01 High Court of Karnataka

Service Tax Service Tax 103.38 Commissioner

Andhra Pradesh VAT Sales Tax 26.04 Sales Tax Appellate Tribunal

Trade Tax Benefit of 220.08 Uttrakhand High Court, Concessional Nainital Form not allowed (Year 2001-02)

Urban Land Tax Land Tax 41.44 Land Tax Authorities

Vacant Land Tax Land Tax 10.35 Land Tax Authorities

(x) The Company does not have accumulated losses as at the end of the financial year and has not incurred Cash losses during the financial year and in the immediately preceding financial year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to bank.

(xii) According to information furnished, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi / mutual benefit fund / society. Therefore, the provisions of clause 4(xiii) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xiv) The Company is not dealing in or trading in shares, securities, debentures and other investments. Accordingly, the provisions of clause 4(xiv) of the Companies (Auditor's Report) Order, 2003 are not applicable to the Company.

(xv) The Company has not given any guarantee for loans taken by others from banks or financial institutions.

(xvi) The Company has not availed any term loan and hence, clause (xvi) of CARO 2003 is not applicable.

(xvii) According to the information and explanation given to us and on an overall examination of the Balance Sheet of the Company, we report that no funds raised on short term basis have been used for long term investment.

(xviii) The Company has not made preferential allotment of shares to parties covered in the register maintained under Section 301 of the Companies Act, 1956.

(xix) The Company has not issued any debentures.

(xx) The Company has not raised money by Public Issues and hence Clause 4 (xx) of CARO 2003 is not applicable to the Company.

(xxi) During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of fraud on or by the Company noticed or reported during the year nor have we been informed of any such case by the management, that causes the financial statements to be materially misstated.

For R G N Price & Co.

Chartered Accountants

H S Venkatesh

Partner

Bangalore Firm Regn. No. 002785S

29th June 2011 Membership No. 026666







 
Subscribe now to get personal finance updates in your inbox!