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To the Members of NRB Bearings Limited
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of NRB Bearings Limited (the Company), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of the significant accounting policies and other explanatory information.
Managements Responsibility for the Standalone Financial Statements
2. The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (the Act) with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs (financial position), profit or loss (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 l33 of the Act. This responsibility also includes 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.
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.
4. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder.
5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether these standalone financial statements are free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due tofraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Companys preparation of the standalone financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. Anaudit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companys Directors, a swell as evaluating the overall presentation ofthe standalone financial statements.
7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on these standalone financial statements.
8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS specified under Section 133 of the Act, of the state of affairs (financial position) of the Company as at 31 March 2018, and its profit (financial performance including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.
9. The comparative financial information for the year ended 31 March 2017 and the transition date opening balance sheet as at 1 April 2016 prepared in accordance with Ind AS included in these standalone financial statements, are based on the previously issued statutory financial statements for the year ended 31 March 2017 and 31 March 2016 respectively, prepared in accordance with Accounting Standards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) which were audited by the predecessor auditor whose reports dated 26 May 2017 and 24 May, 2016 respectively, expressed unmodified opinion on those standalone financial statements, and have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS, which have been audited by us. Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
10. As required by the Companies (Auditors Report) Order, 2016 (the Order) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the Annexure A, a statement on the matters specified in paragraphs 3 and 4of the Order.
11. Further to our comments in Annexure A, as required by Section 143(3) of the Act, 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 requiredby law have been kept by the Company so far as it appears from our examination of those books;
c) the standalone financial statements dealt with by this report are inagreement with the books of account;
d) in our opinion, the aforesaid standalone financial statements comply with IndAS specified under Section 133 of the Act;
e) on the basis of the written representations receivedfrom the directors and taken on record by the Board of Directors, none of the directors is disqualified as at 31 March 2018 from being appointed as a director in terms of Section 164(2) of the Act;
f) we have also audited the internal financial controls over financial reporting (IFCoFR) of the Company as at 31 March 2018 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date and our report dated as per Annexure B expressed, an unmodified opinion;
g) with respect to the other matters to be included inthe 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 andaccording to the explanations given to us:
i. the Company, as detailed in Note 45(a) has disclosed the impact ofpending litigations on its financial position in the standalone 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 disclosure requirements relating to holdings as well as dealings in specified bank notes were applicable for the period from 8 November 2016 to 30 December 2016 which are not relevant to these standalone financial statements. Hence, reporting under this clause is not applicable.
For Walker Chandiok& Co LLP
Firms Registration No.: 001076N/N500013
per Adi P. Sethna
Membership No.: 108840
Place: Mumbai Date: 21 May 2018
Annexure A to the Independent Auditors Report of even date to the members of NRB Bearings Limited, on the standalone financial statements for the year ended 31 March 2018
Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that:
(i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.
(b) The fixed assets have been physically verified by the management during the year and no material discrepancies were noticed on such verification. In our opinion, the frequency of verification of the fixed assets is reasonable having regard to the size of the Company and the nature of its assets.
(c) The title deeds of all the immovable properties (which are included under the head Property, plant and equipment) are held in the name of the Company except for the following property which was transferred as a result of amalgamation of companies as stated in Note 2 to the standalone financial statements wherein the tittle deed is in the name of the erstwhile company
|Nature of property||Total Number of Cases||Whether leasehold / freehold||Gross block as on 31 March 2018||Net block on 31 March 2018||Remarks|
|Land at Waluj||1||Leasehold
|6.23 lakhs||4.48 lakhs||The lease deed is in the name of NRB Torrington Private Limited, erstwhile Company that was merged with the Company under Section 391 to 394 of the Companies Act, 1956 in terms of the approval of the Honorable High Court.|
In our opinion, the management has conducted physical verification of inventory at reasonable intervals during the year, except for goods-in-transit and stocks lying with third parties. For stocks lying with third parties at the year-end, written confirmations have been obtained by the management. No material discrepancies were noticed on the aforesaid verification
(iii) The Company has granted two unsecured loans (including a loan granted during the year) to only one party covered in the register maintained under Section 189 of the Act, which is its wholly owned foreign subsidiary; and with respect to the same:
(a) in our opinion, the terms and conditions of a loan granted during the year, is not, prima facie, prejudicial to the Companys interest;
(b) the schedule of repayment of principal and interest has been stipulated and repayments of the principal amount and the receipts of interest are regular.
(c) there is no overdue amount in respect of loans granted to the party.
(iv) In our opinion, the Company has complied with the provisions of Section 186 in respect of investments, loans and guarantees. Further, in our opinion, the Company has not entered into any transaction covered under Section 185 and Section 186 of the Act in respect of provision of security.
(v) In our opinion, the Company has not accepted any deposits within the meaning of Sections 73 to 76 of the Act 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 sub-section (1) of Section 148 of the Act in respect of Companys products and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. However, we have not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) (a) The Company is regular in depositing undisputed statutory dues including provident fund, employees state
i nsurance, income-tax, sales-tax, service tax, goods and service tax, duty of customs, duty of excise, value added tax, cess and other material statutory dues, as applicable, with the appropriate authorities. Further, no undisputed amounts payable in respect thereof were outstanding at the year-end for a period of more than six months from the date they become payable.
(b) There were no dues in respect of service tax, goods and service tax, duty of customs and duty of excise that have not been deposited with the appropriate authorities on account of any dispute.
The dues outstanding in respect of income-tax, sales-tax and value added tax on account of disputes, are as follows:
Statement of Disputed Dues
|Name of the statute||Nature of dues||Amount* ( in Lakhs)||Amount paid thereagainst ( in Lakhs)||Period to which the amount relates||Forum where dispute is pending|
|The Income-tax||Income tax||95.55||-||A.Y. 2011-12||Commissioner of Income|
|Act, 1961||310.96||-||A.Y. 2012-13||Tax (Appeals)|
|The Bombay Sales Tax Act, 1959||Value added tax||1.20||-||FY 1996-97||Deputy Commissioner (Appeals)|
|The Central Sales||Sales tax||2.42||-||F.Y. 1995-96||Deputy|
|Tax Act, 1956||214.04||-||F.Y. 2011-12||Commissioner(Appeals)|
|The Central Sales Tax Act, 1956||Sales tax||7.84||-||F.Y. 2012-13||Additional Deputy Commissioner (Appeals)|
* including interest
(viii) The Company has not defaulted in repayment of loans or borrowings to any financial institution or a bank or government or any dues to debenture-holders during the year.
(ix) The Company did not raise moneys by way of initial public offer or further public offer (including debt instruments). In our opinion, the term loans availed during the year, were applied for the purposes for which the loans were obtained.
(x) No fraud by the Company or on the Company by its officers or employees has been noticed or reported during the period covered by our audit.
(xi) Managerial remuneration has been paid and provided by the Company 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, provisions of clause 3(xii) of the Order are not applicable.
(xiii) In our opinion all transactions with the related parties are in compliance with Sections 177 and 188 of Act, where applicable, and the requisite details have been disclosed in the standalone financial statements etc., as required by the applicable IndAS.
(xiv) During the year, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures. Accordingly, the provisions of clause 3(xiv) of the Order are not applicable.
(xv) In our opinion, the Company has not entered into any non-cash transactions with the directors or persons connected with them covered under Section 192 of the Act. Accordingly, the provisions of clause 3(xv) of the Order are not applicable.
(xvi) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934.
For Walker Chandiok & Co LLP
Firms Registration No.: 001076N/N500013
per Adi P. Sethna
Membership No.: 108840
Mumbai: 21 May, 2018
Annexure B to the Independent Auditors Report of even date to the members of NRB Bearings Limited, on
the standalone financial statements for the year ended 31 March 2018
Independent Auditors report on the Internal Financial Controls under Clause (i) of sub-section 3 ofSection 143 of the
Companies Act, 2013 (the "Act")
1. In conjunction with our audit of the standalone financial statements of NRB Bearings Limited (the "Company") as at and for the year ended 31 March 2018, we have audited the internal financial controls over financial reporting (IFCoFR) of the Company as atthat date.
Managements Responsibility for Internal Financial Controls
2. The Companys Board of Directors 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 (the "Guidance Note") issued by the Institute of Chartered Accountants of India (ICAI). 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 the Companys business, including adherence to 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 Act.
3. Our responsibility is to express an opinion on the Companys IFCoFR based on our audit. We conducted our audit in accordance with the Standards on Auditing, issued by the ICAI and deemed to be prescribed under section 143(10) of the Act, to the extent applicable to an audit of IFCoFR and the Guidance Note issued by the ICAI. 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 IFCoFR were established and maintained and if such controls operated effectively in all materialrespects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacy of the IFCoFR and their operating effectiveness. Our audit of IFCoFR included obtaining an understanding of IFCoFR, assessing the risk that amaterial 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 ofthe financial statements, whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys IFCoFR.
Meaning of Internal Financial Controls over Financial Reporting
6. A Companys IFCoFR 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 Companys IFCoFR includes those policiesand 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 over Financial Reporting
7. Because of the inherent limitations of IFCoFR, including the possibility of collusion or improper management override of controls, material misstatementsdue to error or fraud may occur and not be detected. Also, projections of any evaluation of the IFCoFR to future periods are subject to the risk that IFCoFR may become inadequate because of changes inconditions, or that the degree of compliance with the policies or procedures may deteriorate.
8. In our opinion, the Company has, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 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 issued by the ICAI.
For Walker Chandiok & Co LLP
Firms Registration No.: 001076N/N500013
per Adi P. Sethna
Membership No.: 108840
Date : 21 May, 2018