bharat electronics ltd Auditors report

To The Members of Bharat Electronics Limited Report

on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of BHARAT ELECTRONICS LIMITED (the "Company") which comprise the Balance Sheet as at 31 March 2023, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as the "standalone financial statements"), in which are included the Returns for the year ended on that date audited by the branch auditors of the Companys branches located at Ghaziabad, Panchkula, Kotdwara, Pune, Navi Mumbai and Machilipatnam.

In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements, give the information required by the Companies Act, 2013 (the "Act") in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS") and other accounting principles generally accepted in India:

a. In case of Balance Sheet, of the state of affairs of the Company as at 31 March 2023;

b. In case of Statement of Profit and Loss, of the Profit and total comprehensive income for the year ended on that date ; c. In case of Statement of changes in equity, changes in equity for the year ended on that date and

d. In case of Statement of cash flows, of the cash flows 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 ("SA"s) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India ("ICAI") 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 made thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

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 of the current period. 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. We have determined the matters described below to be the key audit matters to be communicated in our report.

Key Audit Matter	Auditors response
1 Accuracy of recognition, measurement, presentation and disclosure of revenue and related balances towards Ind AS 115- Revenue from Contracts with Customer.	Principal Audit procedure
	Our Audit procedure involve identification of internal controls and their operating effectiveness towards application of this standard. We have also carried out the substantive testing of the transactions.
The application of this standards involves the assessment towards identification of the distinct performance obligations, determination of the transaction price for each of the identifiedperformance obligation, the judgements used for determining the satisfaction of those performance obligations over time or at a point in time.
	a. We have assessed the appropriateness of the revenue recognition policies by comparing with the applicable Indian accounting standards.
	b. Selected the samples of continuing contracts as well as new contracts and identified the performance obligations and compared the same with performance obligation identified by the Company.
Additionally, the application of the standard also involves judgement used in identifying the amount of cost incurred to obtain or fulfil a contract and the disclosure of the periods over which performance obligations are satisfied over time subsequently to the reporting date.	c. Verified the basis of allocation of the performance obligation if not specifically mentioned in the contract.
	d. Identified the basis to be considered to determine the satisfaction of the performance obligation and compared the same with the judgments used by the company in determining the satisfaction of performance obligation over the time or at a point in time.
The Companys Revenue from Contracts mainly includes supply of defence electronics equipments and systems.
	e. Verified the appropriate evidence considered for determining the satisfaction of performance obligation towards transfer of promised goods or services.
(Refer Note No. 23 to the standalone financial statements and S.No. 5 to the Accounting policies)
	f. In respect of the contracts where the satisfaction of performance obligation over time, we have verified the method identified by the company for recognising the revenue and ensured that those methods are appropriate considering the nature of the performance obligation.
	g. Verified the judgements used by the company to identify those costs that are incurred to obtain or fulfilthe contract and period over which those costs will be amortised.
	h. Review of the plan available with the company towards satisfaction of remaining performance obligation identified based on the delivery terms defined in the Customer order to prepare the disclosure relating to periods over which remaining unsatisfied or partially obligation will be satisfied subsequent to the reporting date.
	i. Verified the judgements used by the company to identify the performance obligation under unconditional appropriation in case of Bill and Hold arrangements.
2 Critical estimates in respect of Onerous Contracts Estimation of unavoidable costs for meeting or satisfaction of performance obligation in respect of contract that have become onerous is critical. The unavoidable costs to complete the performance obligations, being an accounting estimate, is subjected to estimation certainty.	Principal Audit procedure
	We have enquired with the Management regarding the internal controls available towards identification of onerous contracts and cost to fulfil those contracts.
	a. Selected the sample of the continuing as well as new contracts and tested the effectiveness of the controls towards recognition of costs incurred for a particular contract and estimation of costs necessary to fulfil the unsatisfied/ partially satisfied performance obligations in it.
(Refer Note No. 21 to the standalone financial statements and S.No. 23 to the Accounting policies)
	b. Carried out test of controls and substantive procedures in determining the estimates for unavoidable costs towards onerous contracts.
	c. Verified the performance obligation and costs incurred thereunder.
	d. Verifiedthe internal controls towards identification of costs incurred towards the concerned contracts and ensured that only the costs related to the contract is recorded.
	e. Verified the performance obligations in respect of penalties, contract modifications.

 

Key Audit Matter	Auditors response
3 Critical estimates made in respect of expected cost to	Principal Audit procedure
complete the contract i.e., satisfaction of performance obligation over time. The estimate has inherent limitation of certainty towards estimating the cost to satisfy the performance obligation.	We have enquired with the Management regarding the internal controls available towards the identification of contract where the performance obligation are satisfied over the period of time
	a. Selected the sample of the continuing as well as new contracts and tested the effectiveness of the controls towards recognition of costs incurred for a particular contract and estimation of costs necessary to fulfil the unsatisfied/ partially satisfied performance obligations in it.
(Refer Note No. 23 to the standalone financial statements and S.No. 5 to the Accounting policies)
	b. Carried out test of controls and substantive procedures in determining the estimates forcostnecessarytofulfilthe . contract
	c. Verified the purchase/Service Orders issued towards satisfying the performance obligation and costs incurred thereunder.
	d. Verified the internal controls towards identification of costs incurred towards the concerned contracts and ensured that only the costs related to the contract is recorded.
	e. Verifiedthe possible reductions in the contract price towards the balance performance obligations in respect of penalties, contract modifications
	f. Discussed with the Management and analysed that the cost estimated is towards the work that are pending to be carried out for completion and satisfaction of the performance obligation.

Information Other than the Standalone Financial Statements and Auditors Report Thereon

The Companys Board of Directors is responsible for the preparation of the other information. The other information comprises the information included in the Boards Report including its annexures, Corporate Governance and Shareholders information but does not include the standalone financial statements and our auditors report thereon.

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 the other information is materially inconsistent with the standalone financial statements or our knowledge obtained during the course of our audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and Those charged with the Governance for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act,

2013 with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, total comprehensive income, changes in equity and cash flows of the company in accordance with the Ind AS and other accounting principles generally accepted in India. The Management of the Company are responsible for maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, the Management of the Company are responsible for assessing the ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Management intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the financial reporting process of the Company.

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 auditors 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 financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the company, has adequate internal financial controls with reference to standalone financial statements system 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 the management.

Conclude on the appropriateness of managements 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 ability of the company to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors 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 auditors 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.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.

We communicate with those charged with governance 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 of the current period and are therefore the key audit matters. We describe these matters in our auditors 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.

We have considered the audit report of six branches audited by Branch Auditor of the Company in forming our opinion on the standalone financial statements.

Other Matters

1. We did not audit the financial statements of six branches included in the standalone financial statements of the Company whose financial statements reflect total assets of 7,54,532 Lakhs as at 31 March 2023 and total revenues of 6,01,569 Lakhs for the year ended on that date (as per the respective units Audited Financial Statement), as considered in the standalone financial statements. The financial statements of these branches have been audited by the Branch Auditors appointed by Comptroller & Auditor General of India, whose reports have been furnished to us, and our opinion in so far as it relates to the amounts and disclosures included in respect of these branches, is based solely on the report of such Branch Auditors.

Our opinion is not modified in respect of the above matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors report) Order, 2020 ("the Order"), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Companies Act, 2013, we give in the Annexure ‘A, a statement of matters specified in paragraph 3 and 4 of the Order, to the extent applicable.

2. As required by Section 143(3) of the Act, based on our audit 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 of the aforesaid standalone financial statements.

b) In our opinion, proper books of accounts as required by law have been kept by the Company so far as it appears from our examination of those books. The audit of the accounts of units (Bangalore complex, Hyderabad and Chennai) and Corporate Office was carried out by us, whilst the audit of Ghaziabad, Panchkula, Kotdwara, Pune, Navi Mumbai and Machilipatnam units were audited by the respective Branch Auditors. The report of the Branch Auditors has been considered by us while preparing our report. In case of New York, Singapore and other offices, not visited by us, the returns/records received from the said offices have been verified and found to be adequate for the purpose of our audit.

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

d) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of accounts maintained by Company and with the returns received from the offices not audited by us.

e) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act.

f) The Company being a Government Company, the provisions of Section 164(2) of the Companies Act, 2013 in respect of disqualification of Directors are not applicable.

g) With respect to the adequacy of the internal financial controls with reference to standalone financial statements of the company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B" which is based on the auditors report of the Company.

h) With respect to the other matters to be included in the Auditors Report in accordance with the requirements of Section 197(16) of the Companies Act, 2013 as amended:

In our opinion and to the best of information since the company being Government Company, the provisions in relation to the payment of managerial remuneration in accordance with the provisions of Section 197 read with Schedule V to the Companies Act, 2013 is not applicable.

i) With respect to the other matters to be included in the Auditors 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 as at 31 March 2023. Refer Note 30(8) 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 - Refer Note No.21 to the standalone financial statements. The Company do not have any derivative contracts - Refer Note No 30(15) 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 (which are material either individually or in the aggregate) 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 entity, including foreign entity ("Intermediaries"), 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 ("Ultimate Beneficiaries") 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 (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), 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 ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

c) Based on the audit procedures that we have 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 (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.

v. As stated in Note 30(18) to the standalone financial statements a) The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with Section 123 of the Act, as applicable.

b) The interim dividend declared and paid by the Company during the year and until the date of this report is in compliance with Section 123 of the Act.

c) The Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The amount of dividend proposed is in accordance with Section 123 of the Act, as applicable.

vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company with effect from April 1, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended 31 March 2023.

3. As required by Section 143(5) of the Act, we have considered the directions issued by the Comptroller and Auditor General of India, the action taken thereon and its impact on the standalone financial statements of the company in "Annexure C".

For Guru and Jana

Chartered Accountants

Firm Registration No.: 006826S

M Surendra Reddy

Partner

Membership No.: 215205

UDIN: 23215205BGUXCT1418

Guwahati

20 May 2023

Annexure Ato the independent auditors report of even date

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements section of our report to the Members of Bharat Electronics Limited of even date)

To the best of our information and according to the explanations provided to us by the Company and the books of account and records examined by us in the normal course of audit, we state that:

i. In respect of the Companys Property, Plant and Equipment and Intangible Assets:

a. A. The Company has generally maintained proper records showing full particulars, including quantitative details and situation of Property, Plant and Equipment and relevant details of right-of-use assets.

B. The Company has generally maintained proper records showing full particulars of Intangibles assets.

b. The Property, Plant and Equipment have been physically verified by the Company during the year and no material discrepancies were observed in such verification.

c. The title deeds of Immovable properties are held in the name of the Company other than the property which is mentioned in Note No. 1 (xiv) of the standalone financial statements.

d. The Company has not revalued its Property, Plant and Equipment, Right of Use assets, and Intangible Assets during the year.

e. No proceedings have been initiated during the year or pending against the Company as at 31 March 2023 for holding any benami property under the Prohibition of Benami Property Transactions Act, 1988 (as amended in 2016) and rules made thereunder.

ii. a. The Company has conducted the physical verification of inventory at reasonable intervals, in our opinion, the coverage and procedure of such verification by the company is appropriate; Further there were no discrepancies of 10% or more in the aggregate for each class of inventory and hence we are not commenting on the same.

In respect of the materials with sub-contractors, few of the confirmations have been received and reconciled with the books of accounts. In case of such items for which confirmations have not been received, which are not significant, the company has dealt with the same by making necessary provision in the books of accounts.

b. The company has been granted on the working capital limits in excess of five crore rupees in aggregate from banks on the basis of security of Current assets. No working capital limits taken from any financial institutions. The Quarterly returns or statements filed by the company with such banks are in agreement with books of accounts of the company.

iii. The company has not made investments, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured to companies, firms, Limited Liability Partnerships or any other parties except Loans to Employees and Advances in nature of Loans to Employees.

a. During the year, the company has not granted loans, advances in nature of loans, or stood guarantees or security to any other entity except for Loans & Advances in nature of Loans to employees:

Particulars	Guarantees	Security	Loans	Advances in nature of Loans
Aggregate of amounts granted/ provided during the year to Employees	Nil	Nil	87.37	325.97
Balance outstanding as at the balance sheet date in respect of above	Nil	Nil	602.31	164.31

b. In case of Loans granted and Advances in nature of loans are not prejudicial to the interest of the companys interest.

c. In case of Loans granted and Advances in nature of loans, the schedule of repayment of principal and payment of interest has been stipulated and repayments/receipts are regular.

d. There are no overdue amounts for more than 90 days, in respect of the loan granted and advances in nature of loans except for amounts disclosed below.

No of cases	Principle Overdue	Interest Overdue	Total Overdue	Remarks (if any)
1	0.51	-	0.51

Further, reasonable steps taken by the company to recover the overdue amount is adequate.

e. No loan/advance in nature of loan granted which has fallen due during the year, has been renewed or extended or fresh loans granted to settle the overdues of existing loans given to the same parties.

f. The Company has not granted any loans or advances in nature of loans either repayable on demand or without specifying any terms or period of repayment.

iv. The Company being a Government company, the provisions of Section 185 and 186 of the Companies Act, 2013 in respect of loans, investments, guarantees, and security, are not applicable.

v. The Company has not accepted any deposit from public in the current year as per the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Companies Act, 2013 and the rules framed there under. We were informed that no order has been passed by Company Law Board or National Company Law Tribunal or Reserve Bank of India or any Court or any other Tribunal.

All earlier year deposits (collected prior to February 2006) have matured and settled except for 36.95 Lakhs, out of which 36.50 Lakhs is retained as per Garnishee Order of Lokayukta, Bengaluru and the balance of 0.45 Lakhs though matured is unpaid due to legal issues.

vi. We have broadly reviewed the books of accounts relating to the materials, labour and other items of cost maintained by the company pursuant to the Companies (Cost Records and Audit) Rules, 2014 prescribed by the Central Government for the maintenance of cost records under Section 148(1) (d) of the Companies Act, 2013 and we are of the opinion that prima facie the prescribed accounts and records have been made and maintained. We have not carried out any detailed examination of the cost records with a view to determine whether they are accurate or complete.

vii. In respect of statutory dues: a. According to information and explanations given to us and on the basis of our examination of the books of accounts, and records, the company has been generally regular in depositing undisputed statutory dues including Goods and Service Tax, Provident Fund, Employees State Insurance, Income-Tax, Sales tax, Service Tax, duty of Customs, duty of Excise, Value added Tax, Cess and any other statutory dues with the appropriate authorities. There were no undisputed amounts payable in respect of the above in arrears as at 31 March 2023 for a period of more than six months from the date when they became payable.

b. Details of statutory dues referred to in sub-clause (a) above which have not been deposited as on 31 March 2023 on account of disputes are given below –

Nature of the Statute	Nature of Dues	( Amount in Lakhs)	amount relates to Period to which	Forum where it was pending
The Income Tax Act, 1961	Disallowances as per	4,586.37	2008-09, 2009-10,	Commissioner of Income Tax
	Assessment orders		2011-12 to 2013-14, 2015-16 to 2017-18, 2019-20, 2020-21	(Appeals)
Chapter V of Finance Act, 1994	Service Tax	206.75	2011-12	Customs Excise and Service Tax Appellate Tribunal (CESTAT)
Central Excise Act, 1944	MODVAT credit	23.65	1991-92	Commissioner Appeals

 

Nature of the Statute	Nature of Dues	Amount ( in Lakhs)	amount relates to Period to which	Forum where it was pending
Central Excise Act, 1944	Interest on Excise Duty	243.87	2011-12 & 2012-13	Customs Excise and Service Tax Appellate Tribunal (CESTAT)
Customs Act, 1962	Customs Duty	25.45	2012-13	Commissioner (Appeals) of Customs
Central Excise Act, 1944	Excise Duty	6.04	1991-92	Commissioner Appeals
Sales Tax Act, Bihar	Disputed Tax under	66.44	1995-96 to	Commissioner of Commercial Taxes
	Bihar Sales Tax		1997-98	(Appeals), Chirkunda, Bihar
Andhra Pradesh State VAT Act	Sales Tax	21.66	2009-10	Commercial Tax officer, Nampally, Hyderabad
Chapter V of Finance Act, 1994	Service Tax	713.31	2014-15 & 2015-16	Customs Excise and Service Tax Appellate Tribunal (CESTAT)
Customs Act, 1962	Customs Duty	427.80	2015-16	Customs Excise and Service Tax Appellate Tribunal (CESTAT)
Commercial Tax	Commercial Tax	31.83	2011-12 & 2013-14	CTO, Rajasthan Government
Central Sales Tax Act, 1956	Central Sales Tax	2,728.91	2016-17	Joint Commissioner of Commercial Tax Appeals
Karnataka Value Added Tax, 2003	Karnataka Value Added Tax	291.93	2016-17	Joint Commissioner of Commercial Tax Appeals
Madhya Pradesh Value Added Tax, 2002	Value Added Tax and Entry Tax	48.37	2010-11	MP Commercial Tax Appellate Board
Customs Act, 1962	Customs Duty	1,540.46	2020-21	Customs Excise and Service Tax Appellate Tribunal (CESTAT)
Customs Act, 1962	Customs Duty	0.20	2020-21	Customs Excise and Service Tax Appellate Tribunal (CESTAT)
The Income Tax Act, 1961	Tax deducted at source	40.13	2007-08 to 2017-18	TDS circle, LTU
Central Sales Tax Act, 1956	Central Sales Tax	162.87	2020-21	Deputy Commissioner of Commercial Taxes (DCCT)
Employees State Insurance Act, 1948	Employee State Insurance Dues	45.73	2006-11	Appeal pending to be file
Customs Act, 1962	Customs Duty	68.98	2021-22	Additional Commissioner of Customs
Chapter V of the Finance Act,	Service Tax	10.58	2007-08	Customs Excise and Service Tax
1994				Appellate Tribunal (CESTAT)
Tamil Nadu General Sales Tax Act, 1959	Sales Tax	48.00	2007-08 to 2009-10	Sales Tax Tribunal
Chapter V of the Finance Act, 1994	Service Tax	515.90	2010-11 to 2015-16	CESTAT, Chennai
Chapter V of the Finance Act, 1994	Service Tax	30.93	2016-17 to 2017-18	CESTAT, Chennai
Tamil Nadu General Sales Tax Act	Sales Tax	106.64	2015-16	Sales Tax Tribunal
Tamil Nadu General Sales Tax Act	Sales Tax	30.97	2016-17	Sales Tax Tribunal
Goods and Service Tax Act	Goods and Service Tax	4.50	2022-23	Joint Commissioner (GST)
Chapter V of the Finance Act,	Service Tax	211.57	2005-06 to	Customs, Excise, and Service Tax
1994			2008-09	Appellate Tribunal (CESTAT), Bangalore
Uttar Pradesh Value Added Tax Act, 2008	Value Added Tax	22.54	2014-15	Additional Commissioner Act, 2008 Gr-2 (Appeal) - IV, Ghaziabad
Chapter V of the Finance Act, 1994	Service Tax	60.93	Till 30 June 2017	Superintendent, 2017 Range 34, Division VII, Ghaziabad

 

Nature of the Statute	Nature of Dues	Amount ( in Lakhs)	amount relates to Period to which	Forum where it was pending
Employees State Insurance Act, 1948	Interest & Damages towards late deposit	3.52	2000-01	Punjab & Haryana High Court, Chandigarh
Chapter V of the Finance Act,	Service Tax	6.18	2005-06 to	Customs, Excise and Service Tax
1994			2008-09	Appellate Tribunal (CESTAT), Bangalore
Uttarakhand Value Added Tax Act, 2005	Trade Tax & Interest	220.08	2001-02	Uttarakhand High Court, Act, Nainital
Chapter V of the Finance Act,	Service Tax	1.01	2005-06 to	Customs, Excise and Service Tax
1994			2008-09	Appellate Tribunal (CESTAT), Bangalore
Employees State Insurance Act, 1948	ESI Contribution	10.17	1992-93	Andhra Pradesh High Court
Employees State Insurance Act, 1948	Interest & Cost of recovery	20.26	1998-99 to 2000-01	Andhra Pradesh High Court
Rajasthan Sales Tax Act, 1994	Sales Tax	58.85	2008-09	The case is pending with Rajasthan Tax Board
Local Body Tax	Local Body Tax	41.43	2016-17	Assistant Commissioner of Panvel Municipal Corporation
Local Body Tax	Local Body Tax	16.80	2017-18	Assistant Commissioner of Panvel Municipal Corporation

viii. There were no transactions relating to previously unrecorded income that have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961 (43 of 1961).

ix. a. The company has not defaulted in repayment of loans or other borrowings or in the payment of interest thereon to any lender.

b. The company is not declared as wilful defaulter by any bank or financial institution or government or any government authority.

c. The company has not taken any term loans hence reporting under clause 3(ix)(c) of the Order is not applicable.

d. On an overall examination of the financial statements of the Company, funds raised on short-term basis have, prima facie, not been used during the year for long-term purposes by the Company.

e. The company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.

f. The company has not raised any loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies, hence reporting under clause 3(ix)(f) of the Order is not applicable.

x. a. The reporting requirements on the moneys raised by way of initial public offer or further public offer (including debt instruments) during the year will not be applicable as there are no such transactions during the year.

b. The company has not made any preferential allotment or private placement of shares or convertible debentures during the year and hence reporting under clause 3(x)(b) of the Order is not applicable.

xi. a. Based upon the audit procedures performed, we report that no material fraud by the company or on the company has been noticed or reported during the course of our audit.

b. No report under sub-section (12) of Section 143 of the Companies Act has been filed in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government, during the year and upto the date of this report.

c. As represented to us by the management, there are no whistle blower complaints received by the company during the year.

xii. The Company is not a Nidhi Company and hence reporting under clause (xii) of the Order is not applicable.

xiii. In our opinion, all the transactions with the related parties are in compliance with Sections 177 and 188 of Companies Act, 2013 where applicable and the details of such transactions have been disclosed in the standalone financial statements as required by the applicable Indian Accounting Standards.

xiv. a. The Company has an Internal audit system which commensurate with the size and nature of its Business.

b. We have considered the internal audit reports for the year under audit, issued to the Company during the year and till date, in determining the nature, timing and extent of our audit procedures.

xv. In our opinion during the year the Company has not entered into any non-cash transactions with its Directors or persons connected with its Directors and hence provisions of Section 192 of the Companies Act, 2013 are not applicable to the Company.

xvi. In our opinion, a. The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Hence, reporting under clause 3(xvi)(a) of the Order is not applicable. b. The company has not conducted any Non-Banking Financial or Housing Finance activities. Hence, reporting under clause 3(xvi)(b) of the Order is not applicable. c. The Company is not a Core Investment Company (CIC) as defined under the Regulations by the Reserve Bank of India. Hence, reporting under clause 3(xvi)(c) of the Order is not applicable. d. The group in which the company is a part of, does not have any Core Investment Company. Hence, reporting under clause 3(xvi)(d) of the Order is not applicable.

xvii. The Company has not incurred cash losses in the current financial year or in the immediately preceding financial year.

xviii. There has been no resignation of statutory auditors of the Company during the year.

xix. On the basis of the financial ratios, ageing and expected dates of realisation of financial assets and payment of financial liabilities, other information accompanying the financial statements and our knowledge of the Board of Directors and Management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report indicating that Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date.

We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx. a. There are no unspent amounts towards Corporate Social Responsibility (CSR) on other than ongoing projects requiring a transfer to a Fund specified in Schedule VII to the Companies Act in compliance with second proviso to sub-section (5) of Section 135 of the said Act. Accordingly, reporting under clause 3(xx)(a) of the Order is not applicable for the year.

b. In respect of ongoing projects, the Company has transferred unspent Corporate Social Responsibility (CSR) amount as at the end of the current financial year and previous financial year, to a Special account within a period of 30 days from the end of the said financial year in compliance with the provision of Section 135(6) of the Act.

For Guru and Jana

Chartered Accountants

Firm Registration No.: 006826S

M Surendra Reddy

Partner

Membership No.: 215205

UDIN: 23215205BGUXCT1418

Guwahati

20 May 2023

Annexure B to the independent auditors report of even date

(Referred to in paragraph 2(g) under ‘Report on Other Legal and Regulatory Requirements section of our report to the Members of Bharat Electronics Limited of even date)

Report on the Internal Financial Controls with reference to standalone financial statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")

We have audited the internal financial controls with reference to standalone financial statements of Bharat Electronics Limited ("the Company") as of 31 March 2023 in conjunction with our audit of the standalone financial statements of the company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Management of the company is responsible for establishing and maintaining internal financial controls based on the internal control with reference to standalone financial statements 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 Companys 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.

Auditors Responsibility

Our responsibility is to express an opinion on the companys internal financial controls with reference to 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 "Guidance Note") and the Standards on Auditing issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls with reference to standalone financial statements. 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 with reference to standalone financial statements were 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 with reference to standalone financial statements reporting and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to 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 auditors 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 with reference to standalone financial statements.

Meaning of Internal Financial Controls with reference to Standalone Financial Statements

A companys internal financial controls with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial controls with reference to 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 companys assets that could have a material effect on the financial statements

Inherent Limitations of Internal Financial Controls with reference to Standalone Financial Statements

Because of the inherent limitations of internal financial controls with reference to 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 with reference to the standalone financial statements to future periods are subject to the risk that the internal financial control with reference to 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, to the best of our information and according to the explanations given to us, the company was able to provide us with sufficient appropriate audit evidence on the system of internal financial controls with reference to standalone financial statements based on criteria considering the essential components of internal control as stated in the Guidance Note on Audit of Internal Financial Controls over

Financial Reporting issued by the Institute of Chartered Accountants of India.

We also have audited, 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, the standalone financial statements of the company, which comprise the Balance Sheet as at 31 March 2023 and the related Statement of Profit and Loss, the Statement of Changes in Equity and the Statement of Cash Flows for the year then ended and a summary of significant accounting policies and other explanatory information, and our report even dated expressed an unqualified opinion thereon.

For Guru and Jana

Chartered Accountants

Firm Registration No.: 006826S

M Surendra Reddy

Partner

Membership No.: 215205

UDIN: 23215205BGUXCT1418

Guwahati

20 May 2023

"Annexure C" to the independent auditors report of even date

(Referred to in paragraph 3 under ‘Report on Other Legal and Regulatory Requirements section of our report to the Members of Bharat Electronics Limited of even date)

Directions indicating the areas to be examined by the Statutory Auditors during the course of audit of annual accounts of Bharat Electronics Limited, for the year 2022-23 issued by the Comptroller & Auditor General of India under Section 143(5) of the Companies Act, 2013.

Sl. No.	Directions / Sub-Directions	Action taken	Impact on Standalone Financial Statements
1	Whether the company has system in place to process all the accounting transactions through IT system? If yes, the implications of processing of accounting transactions outside IT system on the integrity of the accounts along with the financial implications, if any, may be stated.	Yes, the company process all the accounting transaction on a day-to-day basis through IT system.	Nil
2	Whether there is any restructuring of an existing loan or cases of waiver/write off of debts/loans/interest etc. made by a lender to the company due to the companys inability to repay the loan? If yes, the financial may be stated. Whether such cases are properly accounted for? (In case, lender is a Government company, then this direction is also applicable for statutory auditor of lender company).	According to the information and explanation provided to us and based on the verification of records, the company has not obtained any loans from banks or financial institutions and hence this impact clause is not applicable to the company.	Nil
3	Whether funds (grants/subsidy etc.) received/ receivable for specific schemes from Central/State Government or its agencies were properly accounted for/utilised as per its term and conditions? List the cases of deviation.	Yes, according to the information and explanations provided to us and based on the verification of records, the funds received towards the specific schemes from central / state agencies have been appropriately accounted and utilised for the purpose for which it is received.	Nil

For Guru and Jana

Chartered Accountants

Firm Registration No.: 006826S

M Surendra Reddy

Partner

Membership No.: 215205

UDIN: 23215205BGUXCT1418

Guwahati

20 May 2023