INDEPENDENT AUDITORS REPORT
TO THE MEMBERS OF BAL PHARMA LIMITED Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of BAL PHARMA LIMITED("the company") which comprise the balance sheet as at 31 March 2016 thestatement of profit and loss the cash flow statement for the year then ended and asummary of significant accounting policies and other explanatory information.
Managements responsibility for the Standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made there under. We conducted our audit inaccordance 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 theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by the Companys management and Board of Directors as wellas evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2016 its profits and its cash flows for the year ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure-A statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by section 143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by thecompany so far as it appears from our examination of those books and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus.
(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this report are in agreement with the books of account and with the returnsreceived from branches not visited by us.
(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on 31March 2016 taken on record by Board of Directors none of the directors is disqualified ason 31 March 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 Annexure-B.(g) With respect to the other matters to be included in the Auditors report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us;
i). The Company has disclosed the impact if any of pending litigations as at 31 March2016 on its financial position in its financial statements Refer Note 37 to thefinancial statements.
ii). The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.
iii). There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the company.
For M/s T D JAIN AND D I SAKARIA
Firm registration no: 002491S
T D JAIN
M. No.: 012034
25 May 2016
Annexure-A to the Independent Auditors Report
(The annexure referred to in paragraph 1 under the heading "Report on other legaland regulatory requirements" of our report of even date to the members of Bal PharmaLimited for the year ended 31 March 2016)
i. In respect of its fixed assets
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As informed to us by the management the Company has a policy of physicallyverifying fixed assets in a phased manner over a period which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. We areinformed that there were no material discrepancies noticed on such verification.
(c) The title deeds of all the immovable properties are held in the name of thecompany. ii. As explained to us the inventories have been physically verified by theManagement at reasonable intervals during the year. In our opinion the frequency of suchverification is reasonable. The discrepancies noticed on such physical verificationbetween physical stock and book records were not material and have been adequately dealtwith in the books of account.
iii. The Company has granted unsecured loans to companies and Limited LiabilityPartnerships covered in the register maintained under Section 189 of the Companies Act2013 (the Act).
(a) We are unable to comment as to wether the terms and conditions of the loans grantedto the companies and Limited Liability Partnerships covered in the register maintainedunder Section 189 of the Act are not prejudicial to the companys interest as therehas been no stipulation with respect to the same.
(b) We are unable to comment on the repayment of loans granted to companies and LimitedLiability Partnerships covered in the register maintained under Section 189 of the Act asthere has been no stipulation with respect to the repayment of such loans or the paymentof interest.
(c) We are also unable to ascertain the overdue amount as there has been no stipulationwith respect to the repayment of such loans or the payment of interest.
iv. In respect of loans investments and guarantees the provisions of Section 185 and186 of the Companies Act 2013 have been complied with. v. The Company has not acceptedany deposit to which the provisions of Section 73 to 76 or any other relevant provisionsof the Companies Act and the rules framed there under and the directions issued by the RBIare applicable. Hence paragraph 3 (v) of CARO is not applicable to the company. vi. Wehave broadly reviewed the cost records maintained by the Company pursuant to the Companies(Cost Accounting Records) Rules as amended specified by the Central Government under148(1) of the Companies Act and are of the opinion that prima facie the prescribed costrecords have been maintained. We have however not made a detailed examination of thecost records with a view to determine whether they are accurate or complete. vii.According to the information and explanations given to us: (a) The Company has generallybeen regular in depositing with appropriate authorities undisputed statutory duesincluding Provident Fund Employees State Insurance Income Tax Sales Tax Wealth TaxService Tax Customs Duty Excise Duty Cess and other material statutory dues applicableto it.
According to the information and explanations given to us no undisputed amountspayable in respect of income tax wealth tax service tax sales tax customs duty exciseduty and cess were in arrears as at 31 March 2016 for a period of more than six monthsfrom the date they became payable.
(b) On the basis of our examination of the documents and records of the Company thereare no dues of Income Tax Sales Tax Wealth Tax Service Tax Customs Duty Excise Dutyand Cess which have not been deposited on account of an any dispute except as enumeratedherein below which are pending before respective authorities as mentioned there against:
|Name of Statue ||Nature of dues ||Forum where dispute is pending ||Period(s) to which the amount relates ||Amount involved* (Rs.) |
|Chapter V of Finance Act 1994 ||Service Tax and equivalent penalty ||Commissioner of Central Excise ||Nov 2007 to March 2012 ||8588511 |
|The Central Excise Act 1944 ||Central Excise Duty and Penalty ||Commissioner of Central Excise ||January to October 2010 ||288356 |
|The Central Excise Act 1944 ||Central Excise Duty and Penalty ||CESTAT ||Jan to Oct 2010 ||2434816 |
|The Central Excise Act 1944 ||Central Excise Penalty ||CESTAT ||Nov 2007 to July 2011 ||8501823 |
|The Central Excise Act 1944 ||Central Excise Duty and Penalty ||CESTAT ||July 2011 to December 2011 ||179119 |
|The Central Excise Act 1944 ||Central Excise Duty and Penalty ||CESTAT ||Jan to Feb 2012 ||328671 |
|The Central Excise Act 1944 ||Central Excise Duty and Penalty ||CESTAT ||March 2012 to Jan 2013 ||1350844 |
|The Central Excise Act 1944 ||Central Excise Duty and Penalty ||Assistant Commissioner of Central ||Dec-08 ||179184 |
| || ||Excise || || |
|The Central Excise Act 1944 ||Central Excise Duty and Penalty ||Additional Commissioner of Central ||FY 2010-11 2011-12 & 2012-13 ||2182891 |
| || ||Excise || || |
|The Central Excise Act 1944 ||Central Excise Duty and Penalty ||Assistant Commissioner of Central ||FY 2013-14 & 2014-15 ||742297 |
| || ||Excise || || |
|Income Tax Act 1961 ||Income tax ||Honorable High court of Karnataka ||FY 2005-06 ||963682 |
*Net of amounts paid under protest or otherwise. Amount as per demand order includinginterest wherever quantified.
viii. Based on our audit procedures information and explanations given by themanagement we are of the opinion that the Company has not defaulted in repayment of duesto financial institutions and banks.
ix. In our opinion and according to the information and explanations given to us theterm loans taken by the company during the year have been applied for the purposes forwhich they were obtained. Further the company has not raised any money by way of publicissue/ follow on offer.
x. Based on the audit procedures performed and information and explanations given bythe management we report that no fraud by the company and no fraud on the company by itsofficers/ employees has been noticed or reported during the course of our audit.
xi. The Managerial Remuneration has been paid in accordance with the requisiteapprovals mandated by section 197 read with Schedule V of the Companies Act.
xii. The company is not a Nidhi Company and therefore clause 3(xii) of the Order is notapplicable to the company.
xiii. All transactions with the related parties are in compliance with Section 188 and177 (where applicable) of Companies Act 2013 and the details thereof have been disclosedin the standalone financial statements as required by the Accounting Standards andCompanies Act 2013.
xiv. The Company has not made any preferential allotment/ private placements of sharesduring the year and therefore clause 3(xiv) of the Order is not applicable to the Company.
xv. The Company has not entered into any non-cash transactions with directors orpersons connected with him and therefore clause 3(xv) of the Order is not applicable.
xvi. The company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
|For M/s T D JAIN AND D I SAKARIA |
|Chartered Accountants |
|Firm registration no: 002491S |
|T D JAIN |
|M. No.: 012034 |
|25 May 2016 |
Annexure B to the Independent Auditors Report of Even Date onthe Standalone Financial Statements of Bal Pharma Limited Report on the Internal FinancialControls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")
We have audited the internal financial controls over financial reporting of BALPHARMA LIMITED ("the Company") as of 31 March 2016 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to companys policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditors judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that: a) Pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; b) Provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and c) Provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompanys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
|For M/s T D JAIN AND D I SAKARIA |
|Chartered Accountants |
|Firm registration no: 002491S |
|T D JAIN |
|M. No.: 012034 |
|25 May 2016 |