Mar 31, 2023
Opinion
We have audited the accompanying standalone financial statements of Brigade Enterprises Limited (âthe Companyâ), which comprise the Balance sheet as at March 31, 2023, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of other auditors on separate financial statements and on the other financial information of the Limited Liability Partnership Firm (âLLPâ), the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the âAuditorâs Responsibilities for the Audit of the Standalone Financial Statementsâ section of our report. We are independent of the Company in accordance with the âCode of Ethicsâ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
We draw attention to Note 32(c)(i) to the standalone financial statements in connection with ongoing arbitration proceedings in the Company with respect to loans and advances. Pending resolution of such proceedings, the underlying loans and advances are classified as good and recoverable in the accompanying standalone financial Statements.
Our opinion is not modified in respect of this matter.
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2023. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report.
We have fulfilled the responsibilities described in the Auditorâs responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Revenue recognition for long term projects (Refer Note 21 of the standalone financial statements) |
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The Company applies Ind AS 115 for recognition of revenue from real estate projects. The revenue from real estate projects is recognised at a point in time upon the Company satisfying its performance obligation and the customer obtaining control of the underlying asset, which involves significant estimates and judgement. For revenue contracts forming part of joint development arrangements that are not jointly controlled operations (âJDAâ), the revenue from the development and transfer of constructed area/revenue share with corresponding land/ development rights received by the Company is measured at the fair value of the estimated construction service rendered by the Company to the landowner under JDA. Such revenue is recognised over a period of time in accordance with the requirements of Ind AS 115. For contracts involving sale of real estate inventory property, the Company receives the consideration in accordance with the terms of the contract based on progress made for completion of such real estate projects. |
Our audit procedures included, among others, the following: - We have read the accounting policy for revenue recognition and assessed compliance of the policy in terms of principles enunciated under Ind AS 115. - We assessed managementâs evaluation of determining revenue recognition from sale of real estate property at a point in time in accordance with the requirements under Ind AS 115. - We obtained and understood the revenue recognition process and performed test of controls over revenue recognition including determination of point of transfer of control, completion of performance obligations and fair valuation of estimated construction service revenue under JDA, on a test check basis. - We performed test of details, on a sample basis, and tested the underlying customer/JDA contracts and sale deed/ handover documents, evidencing the transfer of control of the asset to the customer based on which the revenue is recognized at a point of time. |
Key audit matters |
How our audit addressed the key audit matter |
Application of Ind AS 115 involves significant judgment |
- We obtained the joint development agreements entered |
in determining when âcontrolâ of the real estate property |
into by the Company and compared the ratio of constructed |
is transferred to the customer. Further, for revenue |
area/ revenue sharing arrangement between the Company |
contracts forming part of JDA, significant estimate is made |
and the landowner as mentioned in the agreement to the |
by the management in determining the fair value of the |
computation statement prepared by the management. |
underlying revenue. |
- We obtained and tested the computation of the fair value of |
As the revenue recognition involves significant estimates and |
the construction service revenue under JDA, on a sample |
judgement, we regard this as a key audit matter. |
basis. |
- We tested the computation for recognition of revenue over |
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a period of time for revenue contracts forming part of JDA and managementâs assessment of stage of completion of projects and project cost estimates on test check basis. |
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- We assessed the disclosures made by management in |
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compliance with the requirements of Ind AS 115. |
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Assessing the recoverability of carrying value of Inventory and advances paid towards land procurement (including refundable deposits paid under JDA (Refer Note 7, 9 & 10 of the standalone financial statements) |
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As at March 31, 2023, the carrying value of the inventory of |
Our procedures in assessing the carrying value of the |
real estate projects is ?336,258 lakhs and land advances/ |
inventories and land advances/deposits included, among |
deposits is ?35,930 lakhs respectively. |
others, the following: |
The inventories are carried at lower of cost and net realisable |
- We read and evaluated the accounting policies with respect |
value (âNRVâ). The determination of the NRV involves |
to inventories and land advances/deposits. |
estimates based on prevailing market conditions and taking |
- We assessed the Companyâs methodology applied in |
into account the estimated future selling price, cost to |
assessing the carrying value under the relevant accounting |
complete projects and selling costs. |
standards including current market conditions in |
/Deposits paid under joint development arrangements, in the |
assessing the net realisable value having regard to project |
nature of non-refundable amounts, are recognised as land |
development plan and expected future sales. |
advance under other assets and on the launch of the project, the same is transferred as land cost to work-in-progress. |
- We made inquiries with management with respect to inventory of properties on test check basis to understand |
Further, advances paid by the Company to the seller/ intermediary towards outright purchase of land is recognised as land advance under other assets during the course of |
key assumptions used in determination of the net realisable value/ net recoverable value. |
transferring the legal title to the Company, whereupon it is |
- We enquired from the management regarding the project |
transferred to land stock under inventories. |
status and verified the underlying documents for related |
The aforesaid deposits and advances are carried at the |
developments in respect of the land acquisition, project progress and expected recoverability of advances paid |
lower of the amount paid/payable and net recoverable value, |
towards land procurement (including refundable deposits |
which is based on the managementâs assessment including the expected date of commencement and completion of the |
paid under JDA) on test check basis. |
project and the estimate of sale prices and construction costs |
- We obtained and tested the computation involved in |
of the project. |
assessment of carrying value and the net realisable value/ net recoverable value on test check basis. |
We identified the assessment of the carrying value of inventory and land advances/deposits as a key audit matter due to the significance of the balance that involves estimates and judgement. |
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Assessing the recoverability of carrying value of Investments and loans and advances made by the Company in subsidiaries and associate entities (Refer Note 6 & 7 of the standalone financial statements) |
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As at March 31, 2023, the carrying values of Companyâs investment in subsidiaries and associate entities amounted to ?229,121 lakhs. Further, the Company has granted loans and advances of ?43,840 lakhs to its subsidiaries. Management reviews on a periodical basis whether there are any indicators of impairment of such investments and loans and advances |
Our procedures in assessing the impairment of the investments included, among others, the following: - We read and evaluated the accounting policies with respect to investments. - We examined the management assessment in determining whether any impairment indicators exist. |
For cases where impairment indicators exist, management |
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estimates the recoverable amounts of the investments, being |
- We assessed the Companyâs methodology applied in |
higher of fair value less costs of disposal and value in use. |
assessing the carrying value under the relevant accounting |
Significant judgements are required to determine the key |
standards. |
assumptions used in determination of fair value / value in use. |
- We assessed the Companyâs valuation methodology and |
assumptions based on current economic and market |
Key audit matters |
How our audit addressed the key audit matter |
As the impairment assessment involves significant |
conditions in determining the recoverable amount of |
assumptions and judgement, we regard this as a key audit |
investments and loans/advances. |
matter. |
- We compared the recoverable amount of the investment to the carrying value in books. - We assessed the financial condition of entities to whom loans and advances were granted by obtaining the most recent audited financial statements of such entities. - We performed inquiries with management on the project status and future business plan of entities to whom loans and advances were granted to evaluate their recoverability. - We assessed the disclosures made in the standalone financial statements regarding such investments and loans and advances. |
Assessing the recoverability of the carrying value of Investment property including investment properties under construction |
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(Refer Note 3.2 & 4 of the standalone financial statements) |
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As at March 31, 2023, the carrying value of the Investment |
Our procedures in assessing the recoverability of the carrying |
property is ?135,730 lakhs (including properties under |
value of the investment properties included, among others, |
construction ?1,618 lakhs). The carrying value of the investment |
the following: |
property is calculated using land costs, construction costs, |
- We read and evaluated the accounting policies with respect |
interest costs and other related costs. Management reviews |
to investment properties. |
on a periodical basis whether there are any indicators of |
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impairment. |
- We evaluated managementâs identification of CGUâs and the methodology applied in assessing the carrying value |
For assets where impairment indicators exist, management |
of each CGU in compliance with the applicable accounting |
estimates the recoverable amounts, being higher of fair |
standards. |
value less costs of disposal and value in use. Significant |
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judgements are required to determine the key assumptions |
- We examined the management assessment in determining |
used in determination of fair value / value in use. |
whether any impairment indicators exist. |
We considered the assessment of the carrying value of |
- We assessed the Companyâs valuation methodology and |
investment property as a key audit matter due to the |
assumptions based on current economic and market |
significance of the balance and significant estimates and |
conditions applied in determining the recoverable amount, |
judgement involved in impairment assessment. |
including valuation report in certain cases used by the Companyâs management for determining the fair value (ârecoverable amountâ) of the investment property. - We considered the independence, competence and objectivity of the external specialist involved by the management, if any, in determination of valuation. - We assessed the Companyâs valuation methodology applied and compared key property related data used as input with historical actual data - We compared the recoverable amount of the investment property to the carrying value in books. - We assessed the disclosures made in the standalone financial statements regarding such investment property. |
The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditorâs report thereon. The Annual report is expected to be made available to us after the date of this auditorâs report.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether such other information is materially inconsistent with the standalone financial
statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
Responsibilities of Management for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of 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 including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended.
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 the 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.
In preparing the standalone financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Charged with Governance are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone 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 auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended March 31, 2023 and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matter
We did not audit the financial statements and other financial information as regards Companyâs net share in loss of limited liability partnership investment (post tax) amounting to ?53 lakhs as at March 31, 2023. These financial statements and other financial information of the said limited liability partnership investment have been audited by other auditor, whose financial statements, other financial information and auditorâs report have been furnished to us by the management. Our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of these limited liability partnership investment and our report in terms of sub-sections (3) of Section 143 of the Act, in so far as it relates to the aforesaid limited liability partnership, is based solely on the report of such other auditor.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, based on our audit, we give in the âAnnexure 1â a statement on the matters specified in paragraphs 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.
(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of the written representations received from the directors as on March 31, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls with reference to standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(g) In our opinion, the managerial remuneration for the year ended March 31, 2023 has been paid/ provided by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended 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 32(b)&(c) to the standalone financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note 17 to the standalone financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. a) The management has represented that, to the
best of its knowledge and belief, other than as disclosed in the note 47 to the standalone financial statements, no funds have been
advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entities, including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entities, including foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. The final dividend paid by the Company during the year in respect of the dividends declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
As stated in note 30 to the standalone financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.
vi. As proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 is applicable for the Company only w.e.f. April 1, 2023, reporting under this clause is not applicable.
Mar 31, 2022
Emphasis of Matter
We draw attention to:
1. Note 2.3 to the standalone financial statements which describes the managementâs evaluation of Covid-19 impact on the future business operations and future cash flows of the Company and its consequential effects on the carrying value of its assets as at March 31, 2022. In view of the uncertain economic conditions, the managementâs evaluation of the impact on the subsequent periods is highly dependent upon conditions as they evolve.
2. Note 32(c)(i) to the standalone financial statementsin connection with certain ongoing legal proceedings in the Company. Pending resolution of the legal proceedings, the underlying loans and advances are classified as good and recoverable in the accompanying standalone financial Statements.
Our opinion is not modified in respect of the above matters. Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the financial year ended March 31, 2022. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context.
We have determined the matters described below to be the key audit matters to be communicated in our report. We have fulfilled the responsibilities described in the Auditorâs responsibilities for the audit of the standalone financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the standalone financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the accompanying standalone financial statements.
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying standalone financial statements of Brigade Enterprises Limited (âthe Companyâ), which comprise the Balance sheet as at March 31, 2022, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us and based on the consideration of reports of other auditors on separate financial statements and on the other financial information of the Limited Liability Partnership firms, the aforesaid standalone financial statements give the information required by the Companies Act, 2013, as amended (âthe Actâ) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2022, its profit including other comprehensive income its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs), as specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditorâs Responsibilities for the Audit of the Standalone Financial Statementsâ section of our report. We are independent of the Company in accordance with the âCode of Ethicsâ issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Key audit matters |
How our audit addressed the key audit matter |
Revenue recognition for long term projects (Refer Note 21 of the standalone financial statements) |
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The Company applies Ind AS 115 for recognition of revenue from real estate projects. The revenue from real estate projects is recognised at a point in time upon the Company satisfying its performance obligation and the customer obtaining control of the underlying asset, which involves significant estimates and judgement. For revenue contracts forming part of joint development arrangements that are not jointly controlled operations (âJDAâ), the revenue from the development and transfer of constructed area/revenue share with corresponding land/ development rights received by the Company is measured at the fair value of the estimated construction service rendered by the Company to the landowner under JDA. Such revenue is recognised over a period of time in accordance with the requirements of Ind AS 115. |
Our audit procedures included, among others, the following: - We have read the accounting policy for revenue recognition and assessed compliance of the policy in terms of principles enunciated under Ind AS 115. - We assessed managementâs evaluation of determining revenue recognition from sale of real estate property at a point in time in accordance with the requirements under Ind AS 115. - We obtained and understood the revenue recognition process and performed test of controls over revenue recognition including determination of point of transfer of control, completion of performance obligations and fair valuation of estimated construction service revenue under JDA, on a test check basis. |
For contracts involving sale of real estate inventory property, the Company receives the consideration in accordance with the terms of the contract based on progress made for completion of such real estate projects. Application of Ind AS 115 involves significant judgment in determining when âcontrolâ of the real estate property is transferred to the customer. Further, for revenue contracts forming part of JDA, significant estimate is made by the management in determining the fair value of the underlying revenue. As the revenue recognition involves significant estimates and judgement, we regard this as a key audit matter. |
- We performed test of details, on a sample basis, and tested the underlying customer/JDA contracts and sale deed/ handover documents, evidencing the transfer of control of the asset to the customer based on which the revenue is recognized at a point of time. - We obtained the joint development agreements entered into by the Company and compared the ratio of constructed area/ revenue sharing arrangement between the Company and the landowner as mentioned in the agreement to the computation statement prepared by the management. - We obtained and tested the computation of the fair value of the construction service revenue under JDA, on a sample basis. |
- We tested the computation for recognition of revenue over a period of time for revenue contracts forming part of JDA and management''s assessment of stage of completion of projects and project cost estimates on test check basis. |
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- We assessed the disclosures made by management in compliance with the requirements of Ind AS 115. |
Key audit matters |
How our audit addressed the key audit matter |
Assessing the recoverability of carrying value of Inventory and advances paid towards land procurement (including refundable deposits paid under JDA (Refer Note 7, 9 and 10 of the standalone financial statements) |
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As at March 31, 2022, the carrying value of the inventory of real estate projects is ''2,97,319 lakhs and land advances/ deposits of ''33,131 lakhs. |
Our procedures in assessing the carrying value of the inventories and land advances/deposits included, among others, the following: |
The inventories are carried at lower of cost and net realisable value (âNRVâ). The determination of the NRV involves estimates based on prevailing market conditions and taking into account the estimated future selling price, cost to complete projects and selling costs. Deposits paid under joint development arrangements, in the nature of non-refundable amounts, are recognised as land advance under other assets and on the launch of the project, the same is transferred as land cost to work-in-progress. Further, advances paid by the Company to the seller/ intermediary towards outright purchase of land is recognised as land advance under other assets during the course of transferring the legal title to the Company, whereupon it is transferred to land stock under inventories. The aforesaid deposits and advances are carried at the lower of the amount paid/payable and net recoverable value, which is based on the managementâs assessment including the expected date of commencement and completion of the project and the estimate of sale prices and construction costs of the project. We identified the assessment of the carrying value of inventory and land advances/deposits as a key audit matter due to the significance of the balance that involves estimates and judgement. |
- We read and evaluated the accounting policies with respect to inventories and land advances/deposits. - We assessed the Companyâs methodology applied in assessing the carrying value under the relevant accounting standards including current market conditions in assessing the net realisable value having regard to project development plan and expected future sales. - We made inquiries with management with respect to inventory of properties on test check basis to understand key assumptions used in determination of the net realisable value/ net recoverable value. - We obtained and tested the computation involved in assessment of carrying value and the net realisable value/ net recoverable value on test check basis. - We enquired from the management regarding the project status and verified the underlying documents for related developments in respect of the land acquisition, project progress and expected recoverability of advances paid towards land procurement (including refundable deposits paid under JDA) on test check basis. |
Assessing the recoverability of carrying value of Investments and loans and advances made by the Company in subsidiaries and associate entities (Refer Note 6 and 7 of the standalone financial statements) |
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As at March 31, 2022, the carrying values of Companyâs As at March 31, 2022, the carrying values of Companyâs investment in subsidiaries and associate entities amounted to ''2,13,535 lakhs. Further, the Company has granted loans and advances to its subsidiaries and associates. Management reviews on a periodical basis whether there are any indicators of impairment of such investments and loans and advances For cases where impairment indicators exist, management estimates the recoverable amounts of the investments, being higher of fair value less costs of disposal and value in use. Significant judgements are required to determine the key assumptions used in determination of fair value / value in use. As the impairment assessment involves significant assumptions and judgement, we regard this as a key audit matter. |
Our procedures in assessing the impairment of the investments included, among others, the following: - We read and evaluated the accounting policies with respect to investments. - We examined the management assessment in determining whether any impairment indicators exist. - We assessed the Companyâs methodology applied in assessing the carrying value under the relevant accounting standards. - We assessed the Companyâs valuation methodology and assumptions based on current economic and market conditions including effects of Covid-19 pandemic in determining the recoverable amount of investments and loans/advances. - We compared the recoverable amount of the investment to the carrying value in books. |
Key audit matters |
How our audit addressed the key audit matter |
- We assessed the financial condition of entities to whom loans and advances were granted by obtaining the most recent audited financial statements of such entities. - We performed inquiries with management on the project status and future business plan of entities to whom loans and advances were granted to evaluate their recoverability. - We assessed the disclosures made in the standalone financial statements regarding such investments and loans and advances. |
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Assessing the recoverability of the carrying value of Investment property including investment properties under construction (Refer Note 3.2 and 4 of the standalone financial statements) |
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As at March 31, 2022, the carrying value of the Investment property is ''1,38,997 lakhs (including properties under construction ''328 lakhs). The carrying value of the investment property is calculated using land costs, construction costs, interest costs and other related costs. Management reviews on a periodical basis whether there are any indicators of impairment. For assets where impairment indicators exist, management estimates the recoverable amounts, being higher of fair value less costs of disposal and value in use. Significant judgements are required to determine the key assumptions used in determination of fair value / value in use. In view of the COVID -19 pandemic, the management has reassessed its future business plans and key assumptions as at March 31, 2022 while assessing the adequacy of carrying value of the investment property. We considered the assessment of the carrying value of investment property as a key audit matter due to the significance of the balance and significant estimates and judgement involved in impairment assessment. |
Our procedures in assessing the recoverability of the carrying value of the investment properties included, among others, the following: - We read and evaluated the accounting policies with respect to investment properties. - We evaluated managementâs identification of CGUâs and the methodology applied in assessing the carrying value of each CGU in compliance with the applicable accounting standards. - We examined the management assessment in determining whether any impairment indicators exist. - We assessed the Companyâs valuation methodology and assumptions based on current economic and market conditions including effects of COVID-19 pandemic, applied in determining the recoverable amount, including valuation report in certain cases used by the Companyâs management for determining the fair value (ârecoverable amountâ) of the investment property. - We considered the independence, competence and objectivity of the external specialist involved by the management, if any, in determination of valuation. - We assessed the Companyâs valuation methodology applied and compared key property related data used as input with historical actual data - We compared the recoverable amount of the investment property to the carrying value in books. - We assessed the disclosures made in the standalone financial statements regarding such investment property. |
The Companyâs Board of Directors is responsible for the other information. The other information comprises the information included in the Annual report, but does not include the standalone financial statements and our auditorâs report thereon. The Annual report is expected to be made available to us after the date of this auditorâs report.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information identified above when it becomes available and, in doing so, consider whether such other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in section 134(5) of 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 including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the 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.
In preparing the standalone financial statements, management is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3) (i) of the Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone 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 auditorâs report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the financial year ended March 31, 2022 and are therefore the key audit matters. We describe these matters in our auditorâs report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Other Matter
We did not audit the financial statements and other financial information, in respect of 2 limited liability partnership firms (LLPâs), whose financial statements include total assets of ''325 lakhs as at March 31, 2022, and total revenues of ''854 lakhs, total net profit after tax of ''150 lakhs, total comprehensive income of ''195 lakhs and net cash inflows of ''126 lakhs for the year ended on that date. These financial statements and other financial information of the LLPâs have been audited by other auditors, whose financial statements, other financial information and auditorâs reports have been furnished to us by the Management. Our opinion on the standalone financial statements, in so far as it relates to the amounts and disclosures included in respect of these LLPâs and our report in terms of sub-sections (3) of Section 143 of the Act, in so far as it relates to the aforesaid LLPâsâ, is based solely on the report(s) of such other auditors
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2020 (âthe Orderâ), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the âAnnexure 1â a statement on the matters specified in paragraphs 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;;
(c) The Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) The matters described in Emphasis of Matter paragraph above, in our opinion, may have an adverse effect on the functioning of the Company;
foreign entities (âFunding Partiesâ), with the understanding, whether recorded in writing or otherwise, that the company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries; and
c) Based on such audit procedures that were considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (a) and (b) contain any material misstatement.
v. The final dividend paid by the Company during the year in respect of the same declared for the previous year is in accordance with section 123 of the Act to the extent it applies to payment of dividend.
(f) On the basis of the written representations received from the directors as on March 31, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2022 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 with reference to standalone financial statements and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(h) In our opinion, the managerial remuneration for the year ended March 31, 2022 has been paid by the Company to its directors in accordance with the provisions of section 197 read with Schedule V to the Act; and
(i) With respect to the other matters to be included in the Auditorâs Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended 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 32 (b) and (c) to the standalone financial statements;
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on longterm contracts including derivative contracts - Refer Note 17 to the standalone financial statements;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company;
iv. a) The management has represented that,
to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the company to or in any other person or entities, including foreign entities (âIntermediariesâ), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (âUltimate Beneficiariesâ) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to the best of its knowledge and belief, no funds have been received by the company from any person(s) or entities, including
As stated in note 30 to the standalone financial statements, the Board of Directors of the Company has proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordance with section 123 of the Act to the extent it applies to declaration of dividend.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
Partner
Membership Number: 056102 UDIN: 22056102AIVJWZ6993
Place: Bengaluru Date: May 12, 2022
Mar 31, 2018
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Brigade Enterprises Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2018, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility For the Standalone Ind AS Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs Responsibility
Our responsibility is to express an opinion on these standalone Ind AS 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 there under. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 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 auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS 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 accounting policies used and the reasonableness of the accounting estimates made by the Companyâs Directors, as well as evaluating the overall presentation of the standalone Ind AS 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 (i) of the Other Matters paragraph below, is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS 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, of the state of affairs of the Company as at March 31, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Other Matters
i. We did not audit the financial statements and the other financial information as regards Companyâs share in losses of 2 limited liability partnership firms amounting to Rs.222 lakhs for the year ended March 31, 2018, which have been audited by other auditors and whose reports have been furnished to us by the management. Our opinion, in so far as it relates to the affairs of such partnership firms, is based solely on the report of other auditors. Our opinion is not modified in respect of this matter.
ii. We draw attention to Note 47 of the audited standalone Ind AS financial statements, relating to the Scheme of Arrangement between Brigade Enterprises Limited (âthe Companyâ) and its wholly owned subsidiaries - Brigade Hotel Ventures Limited, Brigade Hospitality Services Limited and Augusta Club Private Limited and their respective shareholders and creditors in terms of the provisions of Sections 230 to 233 of the Companies Act, 2013 to transfer the hotels business, integrated clubs and convention centre business and âAugusta Clubâ business, to its wholly owned subsidiaries (hereinafter referred to as âthe Schemeâ). The Scheme was approved by National Company Law Tribunal (âNCLTâ) in March 2018 with an appointed date of October 01, 2016 and consequently, the Company has accounted for the Scheme using the pooling of interests method from the said appointed date. However, the aforesaid accounting from the appointed date is not in accordance with Ind AS 103 specified under Section 133 of the Companies Act 2013, read with the Companies (Indian Accounting Standards) Rules, 2015 (as amended). The previously published Ind AS financial information of the Company, included in these standalone Ind AS financial statements, have been restated for the reasons more fully described in Note 47 of the audited standalone Ind AS financial statements. Our opinion is not qualified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 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 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 and proper returns adequate for the purposes of our audit have been received from branches not visited by us;
(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of accounts;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of written representations received from the directors as on March 31, 2018, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018, from being appointed as a director in terms of section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(g) With respect to the other matters to be included in the Auditorâs 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 Ind AS financial statements - Refer Note 32(c) to the standalone Ind AS financial statements;
ii. The Company did not have any material foreseeable losses on long-term contracts including derivative contracts;
iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment and investment property.
(b) All property, plant and equipment and investment property have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management and based on the examination of the registered sale deed/transfer deed/registered joint development agreements provided to us, we report that, the title deeds of immovable properties included in property, plant and equipment and investment property are held in the name of the Company. Immovable properties of land and buildings whose title deeds have been pledged as security for loans, are held in the name of the Company based on confirmations received by us from lenders.
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) (a) The Company has granted loans to six parties (including interest-free loans) covered in the register maintained under section 189 of the Companies Act, 2013. In our opinion and according to the information and explanations given to us, the terms and conditions of the loans are not prejudicial to the Companyâs interest, having regard to managementâs representation that the loans are given to such parties considering the Companyâs economic interest and long-term trade relationship with such parties.
(b) In respect of the loans granted to parties covered in the register maintained under Section 189 of the Companies Act, 2013, the loans are repayable as per the contractual terms. As per the contractual terms, the loans have not fallen due for repayment. Accordingly, there has been no default on the part of the parties to whom the money has been lent.
(c) There are no amounts of loans granted to companies, firms or other parties listed in the register maintained under section 189 of the Companies Act, 2013 which are overdue for more than ninety days.
(iv) In our opinion and according to the information and explanations given to us, provisions of section 185 and 186 of the Companies Act 2013 in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the company.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under section 148(1) of the Companies Act, 2013, related to the construction activities and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) The Company is generally regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employeesâ state insurance, income-tax, sales-tax, service tax, goods and service tax, duty of custom, duty of excise, value added tax, cess and other statutory dues applicable to it.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employeesâ state insurance, income-tax, wealth-tax, service tax, sales-tax, goods and service tax, duty of custom, duty of excise, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the records of the Company, the dues outstanding of income-tax, sales-tax, wealth-tax, service tax, goods and service tax, duty of custom, duty of excise, value added tax and cess on account of any dispute, are as follows:
Name of the statue |
Nature of |
Disputed |
Amount Paid |
Financial Year |
Forum where dispute is pending |
dues |
Amount (Rs. lakhs) |
under protest (Rs. lakhs) |
to which it relates |
||
Income Tax Act, 1961 |
Income Tax |
37 |
37 |
2007-14 |
Income Tax Appellate Tribunal |
973 |
- |
2006-10 |
The High Court of Karnataka |
||
298 |
2 |
2010-11 2011-12 |
Commissioner Of Income Tax (Appeals) |
||
499 |
- |
2012-13 |
|||
29 |
- |
2013-14 |
|||
Finance Act, 1994 |
Service Tax |
97 |
- |
2006-08 |
Custom Excise & Service Tax |
376 |
- |
2008-12 |
Appellate Tribunal |
||
699 |
- |
2009-12 |
|||
Karnataka Value Added Tax, 2003 |
Value added |
222 |
222 |
2006-07 |
Joint Commissioner of Commercial |
tax |
80 |
80 |
2008-09 |
Taxes (Appeals) |
|
48 |
48 |
2009-10 |
|||
435 |
237* |
2010-11 |
|||
115 |
115 |
2011-12 |
|||
250 |
250 |
2010-11 |
The High Court of Karnataka |
||
1290 |
400** |
2012-13 |
Karnataka Appellate Tribunal |
||
246 |
100 |
2013-14 |
Deputy Commissioner of Commercial Taxes |
||
Karnataka Tax On Entry Of Goods |
Entry tax |
84 |
84 |
2008-09 |
Joint Commissioner of Commercial |
Act, 1979 |
Taxes (Appeals) |
* Excluding bank guarantee of Rs.198 lakhs provided by the Company under protest. ** Excluding bank guarantee of Rs.890 lakhs provided by the Company under protest.
(viii) In our opinion and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans or borrowing to a bank or financial institution. The Company did not have any loans or borrowing from government or dues to debenture holders.
(ix) In our opinion and according to the information and explanations given by the management, the Company has utilized the monies raised by way of term loans (representing loans with a repayment period beyond 36 months) for the purposes for which they were raised. The Company has not raised any monies by way of initial public offer/further public offer (including debt instruments).
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, we report that the managerial remuneration has been paid / provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a nidhi company. Therefore, the provisions of clause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of the Companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given by the management, the Company has complied with provisions of Section 42 of the Companies Act, 2013 in respect of the preferential allotment or private placement of shares (representing offering of its equity shares through a qualified institutions placement). According to the information and explanations given by the management, we report that the amounts raised, have been used for the purposes for which the funds were raised, though idle/surplus funds which were not required for immediate utilization have been gainfully invested in liquid investments payable on demand. The Company has not made any preferential allotment or private placement of fully or partly convertible debentures during the year.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in Section 192 of the Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
Report on the Internal Financial Controls under Clause (i) oF Subsection 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Brigade Enterprises Limited(âthe Companyâ) as of March 31, 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Companyâs policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs internal financial controls over financial reporting with reference to these standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting with reference to these standalone financial statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls over financial reporting with reference to these standalone financial statements and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting with reference to these standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorâs judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls over financial reporting with reference to these standalone financial statements.
Meaning of Internal Financial Controls Over Financial Reporting With Reference to these Financial Statements
A companyâs internal financial control over financial reporting with reference to these standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companyâs internal financial control over financial reporting with reference to these standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting With Reference to these Standalone Financial Statements
Because of the inherent limitations of internal financial controls over financial reporting with reference to these standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting with reference to these standalone financial statements to future periods are subject to the risk that the internal financial control over financial reporting with reference to these standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls over financial reporting with reference to these standalone financial statements and such internal financial controls over financial reporting with reference to these standalone financial statements were operating effectively as at March 31, 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Adarsh Ranka
Partner
Membership Number: 209567
Place : Bengaluru
Date: May 16, 2018
Mar 31, 2017
To the Members of Brigade Enterprises Limited
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Brigade Enterprises Limited ("the Companyâ), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, including the statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''s Responsibility For the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Actâ) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS] specified under section 133 of the Act, read with the Companies (Indian Accounting Standards) Rules, 2015, as amended. 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone Ind AS 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 Ind AS 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 there under. We conducted our audit of the standalone Ind AS financial statements in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 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 judgment, including the assessment of the risks of material misstatement of the standalone Ind AS 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 Ind AS 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 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 Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the standalone Ind AS 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, of the state of affairs of the Company as at March 31,
2017, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s report) Order, 2016 ("the Orderâ) issued by the Central Government of India in terms of subsection (11) of section 143 of the Act, we give in the "Annexure 1â a statement on the matters specified in paragraphs 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 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;
(c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Companies (Indian Accounting Standards) Rules, 2015, as amended;
(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure 2â to this report;
(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 Ind AS financial statements - Refer Note 32(c) to the standalone Ind AS financial statements.
ii. The Company did not have any long-term contracts including derivative 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.
iv. The Company has provided requisite disclosures in Note 40 to the standalone Ind AS financial statements as to the holding of Specified Bank Notes (SBNs) on November 08, 2016 and December 30, 2016 as well as dealings in SBNs during the period from November 08, 2016 to December 30, 2016. Based on audit procedures and relying on management representations, except for the segregation between SBNs and other denomination notes as more fully described in Note 40 to the standalone Ind AS financial statements upon which we are unable to comment on in the absence of necessary details, we report that the amounts disclosed in the said note is in accordance with the books of account maintained by the Company and produced to us for verification.
To the Members of Brigade Enterprises Limited
Report on the matters specified in paragraphs 3 and 4 of the Companies
(Auditor''s Report) Order, 2016 ("the Orderâ)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment and investment property.
(b) All property, plant and equipment and investment property have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment and investment property (including capital work -in-progress) are held in the name of the Company.
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) (a) The Company has granted loans to six parties (including interest-free loans) covered in the register maintained under Section 189 of the Companies Act, 2013 ("the Actâ). In our opinion and according to the information and explanations given to us, the terms and conditions of the loans are not prejudicial to the Company''s interest, having regard to management''s representation that the loans are given to such parties considering the Company''s economic interest and long-term trade relationship with such parties.
(b) In respect of loans granted to parties covered in the register maintained under Section 189 of the Companies Act, 2013, the loans are repayable as per the contractual terms and are interest-free. As per contractual terms, the loans have not fallen due for repayment. Accordingly, there has been no default on the part of the parties to whom the money has been lent.
(c) There are no amounts of loans granted to companies, firms or other parties covered in the register maintained under Section 189 of the Act, which are outstanding for more than ninety days.
(iv) In our opinion and according to the information and explanations given to us, provisions of Section 185 and 186 of the Act in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Act, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) Undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, service tax, sales-tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the information and explanations given to us, the dues outstanding of income tax, sales-tax, service tax, duty of customs, duty of excise or value added tax, which have not been deposited on account of any dispute, are as follows:
(viii) In our opinion and according to information and explanations given by the management, the Company has not defaulted in repayment of dues to banks or financial institutions. The Company has no outstanding dues to debenture holders or government.
Name of the statue |
Nature of dues |
Disputed Amount (REs, lakhs) |
Amount Paid under protest (REs, lakhs) |
Financial Year to which it relates |
Forum where dispute is pending |
Income Tax Act, 1961 |
Income Tax |
37 |
37 |
2008-09 |
Income Tax Appellate Tribunal |
973 |
- |
2009-10 |
Karnataka High Court |
||
298 |
- |
2010-11 |
Commissioner Of Income Tax |
||
2 |
2 |
2011-12 |
(Appeals) |
||
499 |
- |
2012-13 |
|||
29 |
- |
2013-14 |
|||
Finance Act, 1994 |
Service Tax |
97 |
- |
2004-06 |
Custom Excise & Service Tax |
16 |
- |
2006-08 |
Appellate Tribunal |
||
81 |
- |
2006-08 |
|||
376 |
- |
2008-12 |
|||
699 |
- |
2009-12 |
|||
Karnataka Value Added Tax, 2003 |
Value added |
222 |
222 |
2006-07 |
The Joint Commissioner of |
tax |
50 |
50 |
2008-09 |
Commercial Taxes (Appeals) |
|
48 |
48 |
2009-10 |
|||
435 |
237* |
2010-11 |
|||
115 |
115 |
2011-12 |
|||
1,290 |
400** |
2012-13 |
Karnataka Appellate Tribunal |
||
Karnataka Tax On Entry Of Goods |
Entry tax |
113 |
113 |
2008-09 |
The Joint Commissioner of |
Act, 1979 |
Commercial Taxes (Appeals) |
* Excluding bank guarantee of REs, 198 lakhs provided by the Company under protest. ** Excluding bank guarantee of REs, 890 lakhs provided by the Company under protest
(ix) According to the information and explanations given by the management, the Company has utilized the monies raised by way of term loans (representing loans with a repayment period beyond 36 months) for the purpose for which the loan was obtained. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments).
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or on the Company by its officers and employees has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.
(xii) In our opinion, the Company is not a nidhi company. Accordingly, the provisions of Clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with Section 177 and 188 of the Act where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully/partly convertible debentures during the year. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company and hence not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in Section 192 of the Act.
(xvi) According to the information and explanations given to us, the provisions of Section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
To the Members of Brigade Enterprises Limited
Report on the Internal Financial Controls under Clause (i) oF Subsection 3 of Section 143 of the Companies Act, 2013 ("the Actâ)
We have audited the internal financial controls over financial reporting of Brigade Enterprises Limited ("the Companyâ) as of March 31, 2017 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.
Management''s Responsibility For Internal Financial Controls
The Company''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditor''s Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the "Guidance Noteâ) and the Standards on Auditing as specified under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Adarsh Ranka
Partner
Membership Number: 209567
Place: Bengaluru
Date: May 22, 2017
Mar 31, 2016
To the Members of Brigade Enterprises Limited Report on the Financial Statements
We have audited the accompanying standalone financial statements of Brigade Enterprises Limited (âthe Companyâ), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Managementâs Responsibility for the Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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 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 the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, 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.
Auditorâs 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 there under. We conducted our audit in accordance with the Standards on Auditing, issued by the Institute of Chartered Accountants of India, as 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 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 judgment, 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 financial control relevant to the Company''s preparation of the 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 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 financial statements. We believe that the audit evidence we have obtained 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 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 of the state of affairs of the Company as at March 31, 2016, its profit, and its 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,
2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in âAnnexure 1â a statement on the matters specified in paragraphs 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 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;
(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 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;
(e) On the basis of written representations received from the directors as on March 31, 2016, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016, from being appointed as a director in terms of Section 164(2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure 2â to this report;
(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 financial statements - Refer Note 31 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts to the Investor Education and Protection Fund by the Company
To the Members of Brigade Enterprises Limited
Report on the matters specified in paragraphs 3 and 4 of the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ)
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) All fixed assets have not been physically verified by the management during the year but there is a regular programme of verification which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties included in fixed assets are held in the name of the Company.
(ii) The management has conducted physical verification of inventory at reasonable intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) (a) The Company has granted interest-free loans to six parties covered in the register maintained under Section 189 of the Companies Act, 2013 (âthe Actâ). In our opinion and according to the information and explanations given to us, the terms and conditions of the loans are not prejudicial to the Company''s interest, having regard to management''s representation that the loans are given to such parties considering the Company''s economic interest and long-term trade relationship with such parties.
(b) In respect of loans granted to parties covered in the register maintained under Section 189 of the Companies Act, 2013, the loans are repayable as per the contractual terms and are interest-free. As per contractual terms, the loans have not fallen due for repayment. Accordingly, there has been no default on the part of the parties to whom the money has been lent.
(c) There are no amounts of loans granted to companies, firms or other parties covered in the register maintained under Section 189 of the Act, which are outstanding for more than ninety days.
(iv) In our opinion and according to the information and explanations given to us, provisions of Section 185 and 186 of the Act in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given have been complied with by the Company.
(v) The Company has not accepted any deposits from the public.
(vi) We have broadly reviewed the books of account maintained by the Company pursuant to the rules made by the Central Government for the maintenance of cost records under Section 148(1) of the Act, and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.
(vii) (a) Undisputed statutory dues including provident fund, employees'' state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues have generally been regularly deposited with the appropriate authorities.
(b) According to the information and explanations given to us, no undisputed amounts payable in respect of provident fund, employees'' state insurance, income-tax, service tax, sales-tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues were outstanding, at the year end, for a period of more than six months from the date they became payable.
(c) According to the information and explanations given to us, the dues outstanding of income tax, sales-tax, service tax, duty of customs, duty of excise or value added tax, which have not been deposited on account of any dispute, are as follows:
(viii) In our opinion and according to information and explanations given by the management, the Company has not defaulted in repayment of dues to banks or financial institutions. The Company has no outstanding dues to debenture holders or government.
Name of the statue |
Nature of dues |
Disputed Amount (Rs, Lakhs) |
Amount Paid under protest (Rs, Lakhs) |
Financial Year to which it relates |
Forum where dispute is pending |
Income Tax Act, 1961 |
Income Tax |
37 |
37 |
2008-09 |
Income Tax Appellate Tribunal |
973 |
- |
2009-10 |
Karnataka High Court |
||
298 |
- |
2010-11 |
Commissioner Of Income Tax (Appeals) |
||
2 |
2 |
2011-12 |
|||
499 |
- |
2012-13 |
|||
Finance Act, 1994 |
Service Tax |
97 |
- |
2004-06 |
Custom Excise & Service Tax Appellate Tribunal |
16 |
- |
2006-08 |
|||
81 |
- |
2006-08 |
|||
Karnataka Value Added Tax, 2003 |
Value added tax |
222 |
222 |
2006-07 |
The Joint Commissioner of Commercial Taxes (Appeals) |
50 |
50 |
2008-09 |
|||
48 |
48 |
2009-10 |
|||
435 |
237* |
2010-11 |
|||
115 |
115 |
2011-12 |
|||
1290 |
400** |
2012-13 |
Karnataka Appellate Tribunal |
||
Karnataka Tax On Entry Of Goods Act, 1979 |
Entry tax |
113 |
113 |
2008-09 |
The Joint Commissioner of Commercial Taxes (Appeals) |
* Excluding bank guarantee of Rs, 198 Lakhs provided by the Company under protest. ** Excluding bank guarantee of Rs, 890 Lakhs provided by the Company under protest.
(ix) According to the information and explanations given by the management, the Company has utilized the monies raised by way of term loans (representing loans with a repayment period beyond 36 months) for the purpose for which the loan was obtained. The Company has not raised any money by way of initial public offer or further public offer (including debt instruments).
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanations given by the management, we report that no fraud by the Company or on the Company by its officers and employees has been noticed or reported during the year.
(xi) According to the information and explanations given by the management, the managerial remuneration has been paid/provided in accordance with the requisite approvals mandated by the provisions of Section 197 of the Act read with Schedule V to the Act.
(xii) In our opinion, the Company is not a nidhi company. Accordingly, the provisions of Clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with Section 177 and 188 of the Act where applicable and the details have been disclosed in the notes to the financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully/partly convertible debentures during the year Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company and hence not commented upon.
(xv) According to the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in Section 192 of the Act.
(xvi) According to the information and explanations given to us, the provisions of Section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company.
To the Members of Brigade Enterprises Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)We have audited the internal financial controls over financial reporting of Brigade Enterprises Limited (âthe Companyâ) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Company''s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the âGuidance Noteâ) and the Standards on Auditing as specified under Section 143(10) of the Act, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For S. R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number: 101049W/E300004
per Adarsh Ranka
Partner
Membership Number: 209567
Place: Bengaluru
Date: May 16, 2016
Mar 31, 2014
Report on the Financial Statements
We have audited the accompanying financial statements of BRIGADE
ENTERPRISES LIMITED (''the Company''), which comprise the Balance Sheet
as at March 31, 2014, and the Statement of Profit and Loss and the Cash
Flow for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The Company''s 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 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 judgment, 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 the 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
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 for 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 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, 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'') 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 Order.
2. 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 appears from our examination of those
books;
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 comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956 read with
General Circular 15/2013 dated 13 September 2013 of Ministry of
Corporate Affairs in respect of Section 133 of the Companies Act 2013;
e) on the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2014, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure referred to in paragraph 1 under Report on Other Legal and
Regulatory Requirements of the Independent Auditors'' Report to the
members of Brigade Enterprises Limited on the accounts for the year
ended 31st March, 2014.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of Fixed
Assets.
(b) All the fixed assets have been physically verified by the
management during the period and no material discrepancies were noticed
on such verification.
(c) During the period, the company has not disposed off any substantial
part of its Fixed Assets that would affect the Going Concern assumption
of the Company.
(ii) (a) The Inventory has been physically verified at reasonable
intervals during the period by the management. In our opinion, the
frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are 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 inventories. The
discrepancies noticed on verification between physical stock and book
stock was not material and has been properly dealt with in books of
account.
(iii) (a) The company has granted loans to 13 parties covered in the
register maintained under Section 301 of the Companies Act, 1956 (the
Act). The maximum amount outstanding during the year was Rs. 41,031 lakhs
and the year end balance of such loans amounted to Rs. 29,655 lakhs.
Other than the above, the company has not granted any loans, secured or
unsecured, to companies, firms or parties covered in the register
maintained under Section 301 of the Act.
(b) In our opinion, the rate of interest and other terms and conditions
on which the loans have been granted to the bodies corporate listed in
the register maintained under Section 301 of the Act are not , prima
facie, prejudicial to the interest of the Company.
(c) In the case of the loans granted to the bodies corporate listed in
the register maintained under Section 301 of the Act, the borrowers
have been regular in the payment of the interest, if any, as
stipulated. The terms of arrangement do not stipulate any repayment
schedule and the loans are repayable on demand. Accordingly, paragraph
4(iii) (c) of the order is not applicable to the Company in respect of
repayment of the principal amount.
(d) There are no overdue amounts of more than Rs. 1 lakh in respect of
the loans granted to the bodies corporate listed in the register
maintained under Section 301 of the Act.
(e) The company has taken loans from 4 companies covered in the
register maintained under section 301 of the Act. The maximum amount
outstanding during the year was Rs.1,127 lakhs and the year end balance
of such loans amounted to Rs. 54 lakhs. Other than the above, the company
has not taken any loans, secured or unsecured, from companies, firms or
parties covered in the register maintained under Section 301 of the
Act.
(f) In our opinion, the rate of interest and other terms and conditions
on which the loans have been taken from bodies corporate listed in the
register maintained under Section 301 of the Act are not, prima facie,
prejudicial to the interest of the Company.
(g) In the case of the loans taken from the bodies corporate listed in
the register maintained under Section 301 of the Act, the company has
been regular in the payment of the interest, if any, as stipulated. The
terms of arrangement do not stipulate any repayment schedule and the
loans are repayable on demand. Accordingly, paragraph 4(iii) (g) of the
order is not applicable to the Company in respect of repayment of the
principal amount.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business, with regard to purchase of inventory, fixed assets and for
the sale of goods and services. During the course of audit, we have not
observed any continuing failure to correct major weaknesses in internal
control system.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered into a
register in pursuance of section 301 of the Companies Act, 1956 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of Rs. five lakhs in
respect of any party during the period have been made at prices which
are reasonable having regard to prevailing market prices at the
relevant time.
(vi) According to the information and explanations given to us, the
company has not accepted deposits from public and hence the directives
issued by the Reserve Bank of India and the provisions of Sections 58A
and 58AA or any other relevant provisions of the Act and the rules
framed there under, are not applicable to the company.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
(viii) According to the information and explanation given to us, the
company has maintained such accounts and records 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.
(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, the company is generally
regular in depositing with appropriate authorities undisputed statutory
dues including Employee Provident Fund, Employees State Insurance,
Income-Tax, Sales-Tax, Service Tax, Wealth Tax, Custom Duty, Excise
Duty, Cess and any other statutory dues applicable to it except for
some delays.
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth
Tax, Service Tax, Custom Duty, Excise Duty, Cess were in arrears, as at
31.03.2014 for a period of more than six months from the date they
became payable.
(c) According to the information and explanations given to us, the
particulars of Income tax, Value Added tax and Service Tax as at 31st
March 2014, which have not been deposited on account of a dispute
pending are as under:
Name of the Nature of Dues Amount Period to which
the Forum where
dispute is
Statute (T) amount relates pending
Service Tax on
Import For the period
from April, Customs,
Excise, and
Service
Service Tax 96,99,396/-
of Services 2004 to March,
2006 Tax
Appellate
Tribunal
Notification
Benefit For the period
from April, Customs,
Excise, and
Service
Service Tax 15,76,522/-
Denial 2006 to March,
2008. Tax
Appellate
Tribunal
Service Tax
on certain For the period
from April, Customs,
Excise, and
Service
Service Tax 81,19,457/-
Leases 2006 to March,
2008. Tax Appellate
Tribunal
The Joint
Commissioner
of
Value
Added Tax Works
Contract Tax 2,00,49,5827- For the AY
2008-09 Commercial
Taxes
(Appeals -2)
Income Tax
Act Disallowance
u/s 14A. 1,25,27,272/- Assessment
Year 2009-10 Income Tax
Appellate
Tribunal
Disallowance
of
Deduction
u/s 80-IB Assessment
Year 2010-11 Commissioner
of Income Tax
Income
Tax Act 12,70,83,680/-
and
expenditure
u/s and 2011-12 (Appeals)
14A
*net of amounts paid under protest
(x) In our opinion, the company has no accumulated losses and the
company has not incurred cash losses during the financial period
covered by our audit and the immediately preceding financial period.
(xi) In our opinion, and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
financial institution or bank or debenture holders.
(xii) In our opinion, the company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities. Hence, maintenance of records is not
applicable.
(xiii) In our opinion, the company is not a chit fund or nidhi mutual
benefit fund/society and therefore, the provisions of clause 4(xiii) of
the Order are not applicable to the company.
(xiv) According to the information and explanations provided to us, the
company is not dealing in or trading in shares, securities, debentures
and other investments and accordingly, the provisions of clause 4(xiv)
of the Order are not applicable to the company.
(xv) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from bank
or financial institution and accordingly provisions of clause 4(xv) of
the Order are not applicable to the company.
(xvi) In our opinion and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purpose for which they were raised.
(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 funds raised on short-term basis have not been used for long-term
investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares during the
period to parties and companies covered in the Register maintained
under Section 301 of the Act and therefore, the provisions of clause
4(xviii) of the Order are not applicable to the company.
(xix) According to the information and explanations given to us, the
Company has not issued any debenture and therefore, the provisions of
clause 4(xix) of the Order are not applicable to the company.
(xx) The Company has not raised any monies by way of public issues
during the year.
(xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
period under review.
For Narayanan, Patil and Ramesh
Chartered Accountants
Firm Regn No.002395S
L.R. Narayanan
Place: Bangalore Partner
Date: 7th May, 2014 Membership Number: 200/25588
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of BRIGADE
ENTERPRISES LIMITED (the Company), which comprise the Balance Sheet as
at March 31, 2013, and the Statement of Profit and Loss and the Cash
Flow for the year then ended, and a summary of significant accounting
policies and other explanatory information.
Management''s Responsibility for the Financial Statements
The company''s management is responsible for the prepa- ration 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 judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assess- ments, the auditor
considers the 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
management, as well as evaluating the overall presen- tation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the financial state- ments 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 (Auditor''s Report) Order, 2003 (''the
Order'') 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 Order.
2. As required by section 227(3) of the Act, we report that:
a) we have obtained all the information and explana- tions 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 appears from our examination of those
books;
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 comply with the Accounting Standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956;
e) on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors are disqualified as on March 31, 2013, from being
appointed as a director in terms of clause (g) of sub-section (1) of
section 274 of the Companies Act, 1956.
Annexure referred to in paragraph 1 under Report on Other Legal and
Regulatory Requirements of the Independent Auditors'' Report to the
members of Brigade Enterprises Limited on the accounts for the year
ended 31st March, 2013.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of Fixed
Assets.
(b) All the fixed assets have been physically verified by the
management during the period and no material discrepancies were noticed
on such verification.
(c) During the period, the company has not disposed off any substantial
part of its Fixed Assets that would affect the Going Concern assumption
of the Company.
(ii) (a) The Inventory has been physically verified at reasonable
intervals during the period by the management. In our opinion, the
frequency of verifi- cation is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are 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 inventories. The
discrepancies noticed on verification between physical stock and book
stock was not material.
(iii)(a) The company has granted loans to 8 bodies corporate covered in
the register maintained under Section 301 of the Companies Act, 1956
(''the Act''). The maximum amount outstanding during the year was Rs
33,632 lakhs and the year end balance of such loans amounted to Rs
33,632 lakhs. Other than the above, the company has not granted any
loans, secured or unsecured, to companies, firms or parties covered in
the register maintained under Section 301 of the Act.
(b) In our opinion, the rate of interest and other terms and conditions
on which the loans have been granted to the bodies corporate listed in
the register maintained under Section 301 of the Act are not, prima
facie, prejudicial to the interest of the Company.
(c) In the case of the loans granted to the bodies corporate listed in
the register maintained under Section 301 of the Act, the borrowers
have been regular in the payment of the interest, if any, as
stipulated. The terms of arrangement do not stipulate any repayment
schedule and the loans are repayable on demand. Accordingly, paragraph
4(iii)(c) of the order is not applicable to the Company in respect of
repayment of the principal amount.
(d) There are no overdue amounts of more than Rs 1 lakh in respect of
the loans granted to the bodies corporate listed in the register
maintained under Section 301 of the Act.
(e) The company has taken loans from a company covered in the register
maintained under section 301 of the Act. The maximum amount outstanding
during the year was Rs 279 lakhs and the year end balance of such loans
amounted to Rs Nil. Other than the above, the company has not taken any
loans, secured or unsecured, from companies, firms or parties covered
in the register maintained under Section 301 of the Act.
(f) In our opinion, the rate of interest and other terms and conditions
on which the loans have been taken from bodies corporate listed in the
register maintained under Section 301 of the Act are not, prima facie,
prejudicial to the interest of the Company.
(g) In the case of the loans taken from the bodies corporate listed in
the register maintained under Section 301 of the Act, the company has
been regular in the payment of the interest, if any, as stipulated. The
terms of arrangement do not stipulate any repayment schedule and the
loans are repayable on demand. Accordingly, paragraph 4(iii)(g) of the
order is not applicable to the Company in respect of repayment of the
principal amount.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business, with regard to purchase of inventory, fixed assets and for
the sale of goods. During the course of audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system..
(v) (a) According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered into a
register in pursuance of section 301 of the Companies Act, 1956 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the period have been made at prices which
are reasonable having regard to prevailing market prices at the
relevant time.
(vi) According to the information and explanations given to us, the
company has not accepted deposits from public and hence the directives
issued by the Reserve Bank of India and the provisions of Sections 58A
and 58AA or any other relevant provisions of the Act and the rules
framed there under, are not applicable to the company.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
(viii) According to the information and explanation given to us, the
company has maintained such accounts and records 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.
(ix)(a) According to the information and explanations given to us and
the records of the Company examined by us, the company is generally
regular in depositing with appropriate authorities undisputed statutory
dues including Employee Provident Fund, Employees State Insurance,
Income-Tax, Sales-Tax, Service Tax, Wealth Tax, Custom Duty, Excise
Duty, Cess and any other 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, Wealth
Tax, Service Tax, Custom Duty, Excise Duty, Cess were in arrears, as at
31.03.2013 for a period of more than six months from the date they
became payable.
(c) According to the information and explanations given to us, the
particulars of Income tax, Value Added tax and Service Tax as at 31st
March 2013, which have not been deposited on account of a dispute
pending are as under:
Name of the
Statute Nature of Dues Amount (Rs)
Service Tax Service Tax on Import of Services Rs 18,00,67,470
Value Added Tax Additional turnover proposed Rs 12,06,24,122
Income Tax Act Disallowances u/s 14A Rs 56,15,148
Disallowance of Deduction
Income Tax Act u/s 80-IB and expenditure u/s 14A Rs 10,66,73,737
Name of the Statute Period to which the Forum where
amount relates dispute is pending
Service Tax For the period from Customs, Excise and Service
Tax
April, 2003 to
March, 2010 Appellate Tribunal
Value Added Tax For the Assessment
Year April Joint Commissioner of
2005 to March 2011 Commercial Taxes (Appeals)
Income Tax Act Income Tax
Assessment Year
2008-09 Appellate Tribunal
Income Tax Act Income Tax
Assessment Year
2009-10 Appellate Tribunal
(x) In our opinion, the company has no accumulated losses and the
company has not incurred cash losses during the financial period
covered by our audit and the immediately preceding financial period.
(xi) In our opinion, and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
financial institution or bank or debenture holders.
(xii) In our opinion, the company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities. Hence, maintenance of records is not
applicable.
(xiii) In our opinion, the company is not a chit fund or nidhi mutual
benefit fund / society and therefore, the provi- sions of clause
4(xiii) of the Order are not applicable to the company.
(xiv) According to the information and explanations provided to us, the
company is not dealing in or trading in shares, securities, debentures
and other investments and accordingly, the provisions of clause 4(xiv)
of the Order are not applicable to the company.
(xv) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from bank
or financial institution and accordingly provisions of clause 4(xv) of
the Order are not applicable to the company.
(xvi) In our opinion and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purpose for which they were raised.
(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 funds raised on short-term basis have not been used for long-term
investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares during the
period to parties and companies covered in the Register maintained
under Section 301 of the Act and therefore, the provisions of clause
4(xviii) of the Order are not applicable to the company.
(xix) According to the information and explanations given to us, the
Company has not issued any debenture and therefore, the provisions of
clause 4(xix) of the Order are not applicable to the company.
(xx) The Company has not raised any monies by way of public issues
during the year.
(xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
period under review.
for Narayanan, Patil and Ramesh
Chartered Accountants
Firm Regn No. 002395S
L. R. Narayanan
Place: Bangalore Partner
Date: May 07, 2013 Membership No: 200/25588
Mar 31, 2012
1. We have audited the attached Balance Sheet of BRIGADE ENTERPRISES
LIMITED, as at 31st March, 2012 and also the Profit & Loss Account and
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 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 (Auditors Report) Order, 2003, issued
by the Central Government of India, 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 accounts as required by Law have
been kept by the Company so far as appears from our examination of such
books.
c) The Balance Sheet and Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with this report, comply with the Accounting
Standards referred to in Sub-section (3C) of Section 211 of the
Companies Act, 1956.
e) On the basis of written representations received from the Directors
and taken on record by the Board of Directors, we report that none of
the Directors of the company are disqualified as on 31st March, 2012
from being appointed as Directors of the company under clause (g) of
sub section (1) of Section 274 of Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the accounts together with the notes
thereon give the information required under 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 Balance Sheet, of the state of affairs of the company
as at 31st March, 2012.
ii) In the case of Profit and Loss account, of the Profit for the year
ended on that date.
iii) In the case of Cash Flow Statement, of the Cash flows for the year
ended on that date.
Annexure referred to in paragraph 3 of the Auditors' Report
to the members of Brigade Enterprises Limited on the accounts for the
period ended 31st March 2012.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of Fixed
Assets.
(b) All the fixed assets have been physically verified by the
management during the period and no material discrepancies were noticed
on such verification.
(c) During the period, the company has not disposed off any substantial
part of its Fixed Assets that would affect the Going Concern assumption
of the Company.
(ii) (a) The Inventory has been physically verified at reasonable
intervals during the period by the management. In our opinion, the
frequency of verification is reasonable.
(b) The procedures of physical verification of inventory followed by
the management are 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 inventories. The
discrepancies noticed on verification between physical stock and book
stock was not material.
(iii) (a) According to the information and explanations given to us,
the Company has neither granted nor taken any loans, secured or
unsecured from the companies, firms and other parties mentioned in the
Register maintained under section 301 of the Companies Act, 1956.
(b) Since the company has neither granted nor taken any loans, the
provisions of clause (iii) (b), (iii) (c), (iii) (d), (iii) (e), (iii)
(f), (iii) (g), of the Order are not applicable to the company.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business, with regard to purchase of inventory, fixed assets and for
the sale of goods. During the course of audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered into a
register in pursuance of section 301 of the Companies Act, 1956 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of rupees five lakhs in
respect of any party during the period have been made at prices which
are reasonable having regard to prevailing market prices at the
relevant time.
(vi) According to the information and explanations given to us, the
company has not accepted deposits from public and hence the directives
issued by the Reserve Bank of India and the provisions of Sections 58A
and 58AA or any other relevant provisions of the Act and the rules
framed there under, are not applicable to the company.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
(viii) According to information and explanation given to us, the
company has maintained such accounts and records 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. The company is in
the process of getting such accounts and records duly audited by a Cost
Accountant.
(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, the company is generally
regular in depositing with appropriate authorities undisputed statutory
dues including Employee Provident Fund, Employees State Insurance,
Income-Tax, Sales-Tax, Service Tax, Wealth Tax, Custom Duty, Excise
Duty, Cess and any other 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, Wealth
Tax, Service Tax, Custom Duty, Excise Duty, Cess were in arrears, as at
31st March 2012 for a period of more than six months from the date they
became payable.
(c) According to the information and explanations given to us, the
particulars of Income tax, Value Added tax and Service Tax as at 31st
March 2012, which have not been deposited on account of a dispute
pending are as under.
Period to which the Forum
where
Name of
the Statute Nature of Dues Amount (Rs)
amount relates dispute
is
pending
For the period
from Customs,
Excise
and
Service Tax service tax on Rs 96,99,396 April, 2003 to Service
Tax
import of Appellate
service
March, 2008 Tribunal
For the Asses
sment Year Joint
Commissi
oner of
Value Added
Tax
Additiona1
turn
over Rs 10,56,24,122 April 2005 To
March 2008 Commerci
al Taxes
Proposed and MarCh 2010 (Appeals)
Disallowances Income Tax
Income Tax
Act , Rs 56,15,148 Assessment Year
2008-09
u/s 14A Appellate
Tribunal
Disallowances Assessment Year
2008-09
Income Tax
Act u/s 80-IB,
u/s 14A Rs 11,22,88,885 and
& others Assessment Year
2009-10 Appellate
Tribunal
(x) In our opinion, the company has no accumulated losses and the
company has not incurred cash losses during the financial period
covered by our audit and the immediately preceding financial period.
(xi) In our opinion, and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
financial institution or bank or debenture holders.
(xii) In our opinion, the company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities. Hence, maintenance of records is not
applicable.
(xiii) In our opinion, the company is not a chit fund or nidhi mutual
benefit fund / society and therefore, the provisions of clause 4(xiii)
of the Order are not applicable to the company.
(xiv) According to the information and explanations provided to us, the
company is not dealing in or trading in shares, securities, debentures
and other investments and accordingly, the provisions of clause 4(xiv)
of the Order are not applicable to the company.
(xv) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from bank
or financial institution and accordingly provisions of clause 4(xv) of
the Order are not applicable to the company.
(xvi) In our opinion and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purpose for which they were raised.
(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 funds raised on short-term basis have not been used for long-term
investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares during the
period to parties and companies covered in the Register maintained
under Section 301 of the Act and therefore, the provisions of clause
4(xviii) of the Order are not applicable to the company.
(xix) According to the information and explanations given to us, the
Company has not issued any debenture and therefore, the provisions of
clause 4(xix) of the Order are not applicable to the company.
(xx) The Company has not raised any monies by way of public issues
during the year.
(xxi) According to the information and explanations given to us, no
fraud on or by the company has been noticed or reported during the
period under review.
for Narayanan, Patil and Ramesh
Chartered Accountants Firm Regn
No. 002395S
Patil Udaya Kumar
Place: Bangalore Partner
Date: May 07, 2012 Membership No: 200/25589
Mar 31, 2011
1. We have audited the attached Balance Sheet of BRIGADE ENTERPRISES
LIMITED, as at 31st March, 2011 and also the Profit & Loss Account and
the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
Companys 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 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 (Auditors Report) Order, 2003, issued
by the Central Government of India, in terms of Sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specifed 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 accounts as required by law have
been kept by the Company so far as appears from our examination of such
books.
c) The Balance Sheet and Profit & Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account.
d) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with this report, comply with the Accounting
Standards referred to in Sub-section (3C) of Section 211 of the
Companies Act, 1956.
e) On the basis of written representations received from the Directors
and taken on record by the Board of Directors, we report that none of
the Directors of the company are disqualifed as on 31st March, 2011
from being appointed as Directors of the company under clause (g) of
sub section (1) of Section 274 of Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the accounts together with the notes
thereon give the information required under 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 Balance Sheet, of the state of affairs of the company
as at 31st March, 2011.
ii) In the case of Profit and Loss account, of the Profit for the year
ended on that date.
iii) In the case of Cash Flow Statement, of the Cash flows for the year
ended on that date.
Annexure to Auditors Report
Annexure referred to in paragraph 3 of the Auditors Report to the
members of Brigade Enterprises Limited on the accounts for the period
ended 31st March 2011.
(i) (a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of Fixed
Assets.
(b) All the fixed assets have been physically verifed by the management
during the period and no material discrepancies were noticed on such
verifcation.
(c) During the period, the company has not disposed off any substantial
part of its Fixed Assets that would affect the Going Concern assumption
of the Company.
(ii) (a) The Inventory has been physically verifed at reasonable
intervals during the period by the management. In our opinion, the
frequency of verif- cation is reasonable.
(b) The procedures of physical verifcation of inventory followed by the
management are 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 inventories. The
discrepancies noticed on verif- cation between physical stock and book
stock was not material.
(iii) (a) According to the information and explanations given to us,
the Company has neither granted nor taken any loans, secured or
unsecured from the companies, frms and other parties mentioned in the
Register maintained under section 301 of the Companies Act, 1956. (b)
Since the company has neither granted nor taken any loans, the
provisions of clause (iii) (b), (iii) (c), (iii) (d), (iii) (e), (iii)
(f), (iii) (g), of the Order are not applicable to the company.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business, with regard to purchase of inventory, fixed assets and for the
sale of goods. During the course of audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered into a
register in pursuance of section 301 of the Companies Act, 1956 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of contracts or
arrangements entered in the register maintained under Section 301 of
the Companies Act, 1956 and exceeding the value of rupees fve lakhs in
respect of any party during the period have been made at prices which
are reasonable having regard to prevailing market prices at the
relevant time.
(vi) According to the information and explanations given to us, the
company has not accepted deposits from public and hence the directives
issued by the Reserve Bank of India and the provisions of Sections 58A
and 58AA or any other relevant provi- sions of the Act and the rules
framed there under, are not applicable to the company.
(vii) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business.
(viii) According to the information and explanations given to us, the
Central Government has not prescribed maintenance of cost records and
hence the provision of clause 4(viii) is not applicable.
(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, the company is generally
regular in depositing with appropriate authorities undisputed statutory
dues including Employee Provident Fund, Employees State Insurance,
Income-Tax, Sales- Tax, Service Tax, Wealth Tax, Custom Duty, Excise
Duty, Cess and any other 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, Wealth
Tax, Service Tax, Custom Duty, Excise Duty, Cess were in arrears, as at
31.03.2011 for a period of more than six months from the date they
became payable
(c) According to the information and explanations given to us, the
particulars of Income Tax, Value Added Tax and Service Tax as at 31st
March 2011, which have not been deposited on account of a dispute
pending are as under:
Period to
which the Forum where
Name of
the Statute Nature of Dues Amount (Rs)
amount relates dispute is
pending
Service Tax on For the period
from Customs,
Excise and
Service Tax Import Rs 96,99,396 April, 2003 to Service Tax
Appellate
of Services March, 2008 Tribunal
Joint
Commissioner
of
Additional
turnover For the period
April
VAT Rs 10,08,26,571 Commercial
Taxes
proposed 2005 to March
2008 (Appeals)
Disallowance u/s Assessment Year Income Tax
Appellate
Income Tax Act Rs 56,15,148
14A 2008-09 Tribunal
(x) In our opinion, the company has no accumulated losses and the
company has not incurred cash losses during the financial period covered
by our audit and the immediately preceding financial period.
(xi) In our opinion, and according to the information and explanations
given to us, the company has not defaulted in repayment of dues to a
financial insti- tution or bank or debenture holders.
(xii) In our opinion, the company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities. Hence, maintenance of records is not
applicable.
(xiii) In our opinion, the company is not a chit fund or nidhi mutual
benefit fund / society and therefore, the provisions of clause 4(xiii)
of the Order are not applicable to the company.
(xiv) According to the information and explanations provided to us, the
company is not dealing in or trading in shares, securities, debentures
and other investments and accordingly, the provisions of clause 4(xiv)
of the Order are not applicable to the company.
(xv) According to the information and explanations given to us, the
company has not given any guarantee for loans taken by others from bank
or financial insti- tution and accordingly provisions of clause 4(xv) of
the Order are not applicable to the company.
(xvi) In our opinion and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purpose for which they were raised.
(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 funds raised on short-term basis have not been used for long-term
investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares during the
period to parties and companies covered in the Register maintained
under Section 301 of the Act and therefore, the provisions of clause
4(xviii) of the Order are not applicable to the company.
(xix) According to the information and explanations given to us, the
Company has not issued any debenture and therefore, the provisions of
clause 4(xix) of the Order are not applicable to the company.
(xx) In our opinion, in respect of the monies raised by the company by
way of public issue during the year, the management has disclosed the
end use of money raised by public issues as a part of Notes to Accounts
and the same has been verifed.
(xxi) We have been informed that an erstwhile junior level employee of
the Company had embezzled funds amounting to Rs 147.58 Lakhs over a
period from April 2007 to June 2009. The Companys internal
investigation under the direct supervision of the Companys Audit
Committee related to this embezzlement has been completed. We have also
been informed that a sum of Rs 43.28 Lakhs has been recovered by this
company on this account.
for Narayanan, Patil and Ramesh
Chartered Accountants
Firm Regn No. 002395S
Patil Udaya Kumar
Partner
Membership No: 200/25589
Place: Bangalore
Date: May 04, 2011
Mar 31, 2010
1. We have audited the attached Balance Sheet of BRIGADE ENTERPRISES
LIMITED, as at 31st March, 2010 and also the Profi t and Loss Account
and the Cash Flow Statement for the year ended on that date annexed
thereto. These fi nancial statements are the responsibility of the
CompanyÃs 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 fi
nancial 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 signifi cant estimates
made by management, as well as evaluating the overall fi nancial
statement presentation. We believe that our audit provides a reasonable
basis for our opinion.
3. As required by the Companies (Auditors Report) Order, 2003, issued
by the Central Government of India, in terms of Sub-section (4A) of
Section 227 of the Companies Act, 1956, we enclose in the Annexure a
statement on the matters specifi ed 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 so far as appears from our examination of such
books.
c) The Balance Sheet and Profi t and Loss Account and Cash Flow
Statement dealt with by this report are in agreement with the books of
account.
d) In our opinion, the Balance Sheet, Profi t and Loss Account and Cash
Flow Statement dealt with this report, comply with the Accounting
Standards referred to in Sub-section (3C) of Section 211 of the
Companies Act, 1956.
e) On the basis of written representations received from the Directors
and taken on record by the Board of Directors, we report that none of
the Directors of the Company are disqualifi ed as on 31st March, 2010
from being appointed as Directors of the Company under Clause (g) of
sub-section (1) of Section 274 of Companies Act, 1956.
f) In our opinion and to the best of our information and according to
the explanations given to us, the accounts together with the notes
thereon give the information required under 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 Balance Sheet, of the state of affairs of the Company
as at 31st March, 2010.
ii) In the case of Profit and Loss account, of the Profit for the
year ended on that date.
iii) In the case of Cash Flow Statement of the Cash fl ows for the year
ended on that date.
Annexure referred to in paragraph 3 of the Auditorsà Report to the
members of Brigade Enterprises Limited on the accounts for the year
ended 31st March, 2010 .
(i) (a) The Company has maintained proper records
showing full particulars, including quantitative details and situation
of Fixed Assets.
(b) All the fi xed assets have been physically verifi ed by the
management during the period and no material discrepancies were noticed
on such verifi cation.
(c) During the period, the Company has not disposed off any substantial
part of its Fixed Assets that would affect the Going Concern assumption
of the Company.
(ii) (a) The Inventory has been physically verifi ed at reasonable
intervals during the period by the management. In our opinion, the
frequency of verifi cation is reasonable.
(b) The procedures of physical verifi cation of inventory followed by
the management are 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 inventories. The
discrepancies noticed on verifi cation between physical stock and book
stock was not material.
(iii) (a) According to the information and explanations given to us,
the Company has neither granted nor taken any loans, secured or
unsecured from the companies, fi rms and other parties mentioned in the
Register maintained under Section 301 of the Companies Act, 1956.
(b) Since the Company has neither granted nor taken any loans, the
provisions of Clause (iii) (b), (iii) (c), (iii) (d), (iii) (e), (iii)
(f), (iii) (g), of the Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, with regard to purchase of inventory, fi xed assets and for
the sale of goods. During the course of audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
(v) (a) According to the information and explanations given to us, we
are of the opinion that the transactions that need to be entered into a
register in pursuance of Section 301 of the Companies Act, 1956 have
been so entered. (b) In our opinion and according to the information
and explanations given to us, the transactions made in pursuance of
contracts or arrangements entered in the register maintained under
Section 301 of the Companies Act, 1956 and exceeding the value of
rupees fi ve lakhs in respect of any party during the period have been
made at prices which are reasonable having regard to prevailing market
prices at the relevant time.
(vi) According to the information and explanations
given to us, the Company has not accepted deposits from public and
hence the directives issued by the Reserve Bank of India and the
provisions of Sections 58A and 58AA or any other relevant provisions of
the Act and the rules framed there under, are not applicable to the
Company.
(vii) In our opinion, the Company has an internal
audit system commensurate with the size and nature of its business.
(viii) According to the information and explanations
given to us, the Central Government has not prescribed maintenance of
cost records and hence the provision of Clause 4(viii) is not
applicable.
(ix) (a) According to the information and explanations given to us and
the records of the Company examined by us, the Company is generally
regular in depositing with appropriate authorities undisputed statutory
dues including Employee Provident Fund, Employees State Insurance,
Income-Tax, Sales-Tax, Service Tax, Wealth Tax, Customs Duty, Excise
Duty, Cess and any other 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, Wealth
Tax, Service Tax, Customs Duty, Excise Duty, Cess were in arrears, as
at 31.03.2010 for a period of more than six months from the date they
became payable.
(c) According to the information and explanations given to us, the
particulars of Income tax, Value Added tax and Service Tax as at 31st
March, 2010, which have not been deposited on account of a dispute
pending are as under:
Name of the Nature of Dues Amount (Rs.) Period to which the Forum where
dispute is
Statute amount relates pending
Service Tax Service Tax on Import of Services Rs. 96,99,396. For the
period from April, Customs, Excise, and
2003 to March, 2008 Service Tax Appellate Tribunal
Income Tax Act Disallowance of Deduction under Rs. 67,95,983 For
Assessment year Commissioner of
Section 80IB & levy of interest U/s 2006-07 Income-tax (Appeals)
234B
(x) In our opinion, the Company has no accumulated losses and the
Company has not incurred cash losses during the fi nancial period
covered by our audit and the immediately preceding fi nancial period.
(xi) In our opinion, and according to the information and explanations
given to us, the Company has not defaulted in repayment of dues to a fi
nancial institution or bank or debenture holders.
(xii) In our opinion, the Company has not granted any loans and
advances on the basis of security by way of pledge of shares,
debentures and other securities. Hence, maintenance of records is not
applicable.
(xiii) In our opinion, the Company is not a chit fund or nidhi mutual
benefi t fund/society and therefore, the provisions of Clause 4(xiii)
of the Order are not applicable to the Company.
(xiv) According to the information and explanations provided to us, the
Company is not dealing in or trading in shares, securities, debentures
and other investments and accordingly, the provisions of clause 4(xiv)
of the Order are not applicable to the Company.
(xv) According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or fi nancial institution and accordingly provisions of clause 4(xv) of
the Order are not applicable to the Company.
(xvi) In our opinion and according to the information and explanations
given to us, on an overall basis, the term loans have been applied for
the purpose for which they were raised.
(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 funds raised on short-term basis have not been used for long-term
investment.
(xviii) According to the information and explanations given to us, the
Company has not made any preferential allotment of shares during the
period to parties and companies covered in the Register maintained
under Section 301 of the Act and therefore, the provisions of Clause
4(xviii) of the Order are not applicable to the Company.
(xix) According to the information and explanations given to us, the
Company has not issued any debenture and therefore, the provisions of
clause 4(xix) of the Order are not applicable to the Company.
(xx) In our opinion, in respect of the monies raised by the Company by
way of public issue during the year, the management has disclosed the
end use of money raised by public issues as a part of Notes to Accounts
and the same has been verifi ed.
(xxi) According to the information and explanations given to us, no
fraud on or by the Company has been noticed or reported during the
period under review.
for Narayanan, Patil and Ramesh
Chartered Accountants
Firm Reg. No. 002395S
Patil Udaya Kumar
Place : Bangalore, Partner
Date : May 5, 2010 Membership No: 200/25589