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Ballarpur Industries Ltd.

BSE: 500102 Sector: Industrials
NSE: BALLARPUR ISIN Code: INE294A01037
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VOLUME 106762
52-Week high 21.80
52-Week low 11.80
P/E
Mkt Cap.(Rs cr) 999.64
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 15.40
CLOSE 15.40
VOLUME 106762
52-Week high 21.80
52-Week low 11.80
P/E
Mkt Cap.(Rs cr) 999.64
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Ballarpur Industries Ltd. (BALLARPUR) - Auditors Report

Company auditors report

TO THE MEMBERS OF BALLARPUR INDUSTRIES LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of M/s BallarpurIndustries Limited ("the Company") which comprises the Balance Sheet as atMarch 31 2016 the Statement of Profit and Loss Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory informationin which are incorporated the audited financial statements for the year ended on that dateof the Unit of the Company audited by other auditor.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act 2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

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

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

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error.

In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Company's Directors as well asevaluating 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 financial statements.

Basis for Qualified Opinion

As reported by Auditor of Unit Kamplapuram the financial statements of the Unithave been prepared on a going concern basis for the reasons stated in the note No. B-36.The financial statements do not include any adjustments relating to the recoverability andclassification of recorded asset amounts and classification of liabilities that may benecessary if the Unit is unable to continue as going concern.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2016 and its profit and its cash flows for theyear ended on that date.

Other Matter

We did not audit the financial statements of Kamlapuram Unit of the Company included inthe standalone financial statements of the Company whose financial statements reflectTotal assets of Rs. 54556 lacs as at 31st March 2016 and Total revenues ofRs. 1540 lacs for the year ended on that date as considered in the standalone financialstatements. The financial statements of this Unit has been audited by the Unit Auditorwhose report has been furnished to us and our opinion in so far as it relates to theamounts and disclosures included in respect of this Unit is solely on the report of suchUnit Auditor.

Our report is not modified in report of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 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 bestof our knowledge and belief were necessary for the purposes of our audit.

b. Except for the effects of the matter described in the Basis for Qualified Opinionparagraph above in our opinion proper books of account as required by law havebeen kept by the Company so far as appears from our examination of those books and reportof the Unit Auditor;

c. The reports on the accounts of the Unit Kamplapuram of the Company audited underSection 143 (8) of the Act by such Unit Auditor have been sent to us and have beenproperly dealt with by us in preparing this report.

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

e. Except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above in our opinion the aforesaid standalone financialstatements comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014.

f. The matter described in the Basis for Qualified Opinion paragraph above in ouropinion may have an adverse effect on the functioning of the Company.

g. On the basis of the written representations received from the directors as on31st March 2016 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms of Section164 (2) of the Act;

h. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B"; and

i. With respect to the other matters to be included in the Auditor's 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 of pending litigations on its financialposition in its financial statements - Refer Note B-27 to the financial statements;

ii) The Company has made provision as required under the applicable law oraccounting standards for material foreseeable losses if any on long-term contractsincluding derivative contracts - Refer Note B-6 and Note B-10 to the financial statements;

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

ASHWIN MANKESHWAR

Partner

Membership No. 046219

For and on behalf of K. K. Mankeshwar & Co.

Chartered Accountants FRN: 106009W

New Delhi dated the 30th May 2016

"ANNEXURE A" TO THE INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in paragraph 1 under "Report on Other Legal andRegulatory Requirement" section of our Independent Auditors' Report to the members ofthe Company on the financial statements for the year ended March 31 2016 we report that:

1. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;

b) The fixed assets were physically verified during the year by the management in aphased periodical manner which in our opinion is reasonable having regard to the size ofthe Company and nature of its assets. No material discrepancies were noticed on suchphysical verification.

c) On examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company except in Unit Kamplapuram land value atRs. 44 lacs acquired under agreements and under possession of the Unit are yet to beregistered in the name of the Unit.

2. The inventory except goods-in- transit has been physically verified by themanagement during the year.

In our opinion the frequency of such verification is reasonable. The discrepanciesnoticed on verification between the physical stocks and the book records were notmaterial.

3. The Company has not granted any loan secured or unsecured to Companies firms orother parties covered in the registers maintained in pursuance of Section 189 of the Act.Accordingly paragraph 3(iii) of the Order is not applicable to the Company.

4. According to the information and explanation given to us the Company has compliedwith the provision of section 185 and 186 of the Act in respect of loans guaranteesinvestments and securities made.

5. The Company has complied with the directives issued by the Reserve Bank of India andthe provisions of Section 73 to 76 or any other relevant provisions of the Act and therules framed there under where applicable with regard to the deposits accepted from thepublic. According to the information and explanations given to us no order has beenpassed by the Company Law Board or National Law Tribunal or Reserve Bank of India or anycourt or any other tribunal on the Company.

6. We have broadly reviewed the books of account and records maintained by the Companyrelating to the products of the Company pursuant to the Rules made by the CentralGovernment for the maintenance of cost records under Sub-section (1) of Section 148 of theAct and we are of the opinion that prima facie the prescribed accounts and records havebeen made and maintained. We have however not made a detailed examination of the recordswith a view to determining whether they are accurate or complete.

7. a) According to the records of the Company undisputed statutory dues includingProvident Fund Employees State Insurance Income-Tax Sales tax Service Tax Duty ofCustoms Duty of Excise Value added Tax Cess and other material statutory dues have beenregularly deposited during the year by the Company with the appropriate authorities thoughthere has been a slight delay in few cases.

According to the information and explanations given to us no undisputed amountspayable in respect Provident Fund Employees State Insurance Income-Tax Sales taxService Tax Duty of Customs Duty of Excise Value added Tax Cess and other statutorydues as applicable to it were outstanding as at March 31 2016 for a period of more thansix months from the date they became payable.

b) According to the information and explanations given to us there are no dues ofIncome-Tax Sales tax Value added tax Service Tax Duty of Customs Duty of Excise Cesswhich have not been deposited with the appropriate authorities on account of disputesother than those mentioned in "Annexure A (1)" to this report.

8. According to the information and explanations give to us and based on ourexamination of the records of the Company has not defaulted in repayment of dues to anyfinancial institutions or banks. The Company has not issued debentures during the year.

9. The Company has not raised money by way of initial public offer or further publicoffer (including debt instruments). However the moneys raised by way of term loan whichwere applied for the purpose for which those were obtained.

10. According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

11. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/ provide for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

12. As the Company is not a Nidhi Company accordingly clause (xii) of paragraph 3 ofthe order is not applicable to the Company.

13. According to the information and explanation given to us all transactions withrelated parties are in compliance with section 177 and 188 of the Act wherever applicableand the details have been disclosed in the Financial Statements as required by theapplicable accounting standards.

14. According to the information and explanation given to us the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebenture during the year.

15. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly clause (xv) of theparagraph 3 of the Order is not applicable.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

ASHWIN MANKESHWAR

Partner

Membership No. 046219

For and on behalf of K. K. Mankeshwar & Co.

Chartered Accountants

FRN: 106009W

New Delhi dated the 30th May 2016

ANNEXURE 'A (1)' TO PARA 7 (B) OF ANNEXURE - 'A' OF OUR REPORT OF EVEN DATE

NAME OF THE STATUTE NATURE OF DISPUTED DUES AMOUNTS (iN LACS) PERIOD TO WHICH THE AMOUNT RELATES FORUM WHERE THE DISPUTE IS PENDING
Central Excise Tariff Act 1985 Excise 24.33 1996-97; 2010-11; 2013-14 Asst. Commissioner Yamuna Nagar
Central Excise Tariff Act 1985 Excise 11.32 1996-97 Joint Commissioner Panchkula
Central Excise Tariff Act 1985 Excise 38.48 2009-10; 2015-16 Commissioner Panchkula
Central Excise Tariff Act 1985 Excise 694.29 2003-04 to 2010-11 CESTAT Delhi & Chandigarh
Central Excise Tariff Act 1985 Excise 262.32 2004-05 to 2009-10 Commissioner (Appeals) Delhi
Customs Act1962 Custom 36.47 2012-13 The Commissioner Custom (Apeals) Kandla
Customs Act1962 Custom 32.83 2012-13 Commissioner Custom (Apeals) Jam Nagar
Punjab General Sales Tax Act 1948 Sales Tax 547.00 1989 to 1995 Punjab VAT Tribunal Chandigarh
UP Trade Tax 1948 Sales Tax 0.98 1997-98 Trade Tax Tribunal Saharanpur
UP Trade Tax 1948 Sales Tax 0.66 2002-03 Trade Tax Tribunal Saharanpur
UP Tax on Entry of Goods Act 2000 Entry Tax 1.92 2001-02 Trade Tax Tribunal Saharanpur
UP VAT Act 2008 Sales Tax 1.22 2008-09 Joint Commisioner Appeals- Saharanpur
UP VAT Act 2008 Sales Tax 1.47 2008-09 Trade Tax Tribunal Saharanpur
UP Trade Tax 1948 Sales Tax 11.74 1994-95 Nainital High Court
Central Sales Tax Act1956 Sales Tax 0.53 2008-09 Dy. Commissioner (Appeals) Patiala
Central Sales Tax Act1956 Sales Tax 0.88 2011-12 Jt. Commissioner (Appeals) Ambala
Haryana VAT Act Sales Tax 2.76 2015-16 Jt.Excise & Taxation Commissioner Appeals-Ambala
UP VAT Act 2008 Sales Tax 5.99 2014-15 Addl. Commissioner (Appeal)- Saharanpur
UP VAT Act 2008 Sales Tax 1.12 2010-11 Addl. Commissioner (Appeal)- Saharanpur
Central Sales Tax Act 1956 Sales Tax 14.70 2001-02 Appellate Deputy Commissioner (CT) Secunderabad
Central Excise Tariff Act 1944 Excise duty and Penalty 723.67 2012-13 CESTAT Hyderabad
Income Tax Act 1961 Income Tax 2919.60 1981-82 to 1990-91 1997-98 1999-2000 2000-01 2002-03 2003-04 2004-05 Pending before high court
Income Tax Act 1961 Income Tax 2692.35 1994-95 2005-06 2009-10 2010-11 Pending before high tribunal
Total 8026.63

"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF BALLARPUR INDUSTRIES LIMITED

Report on the internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of M/sBallarpur Industries Limited ("the Company") as of March 31 2016 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.

Management's Responsibility for internal Financial Controls

The Company's 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). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's 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 Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

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 auditor's judgement 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 Company's internal financial controls systemover financial reporting.

Meaning of internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles.

A Company's internal financial control over financial reporting includes those policiesand procedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorisations of management and directors of the Company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the Company's assets that could have a material effecton 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.

Opinion

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 March 31 2016 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theICAI.

ASHWIN MANKESHWAR

Partner

Membership No. 046219

For and on behalf of K. K. Mankeshwar & Co.

Chartered Accountants FRN: 106009W

New Delhi dated the 30th May 2016

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