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Ballarpur Industries Ltd.

BSE: 500102 Sector: Industrials
NSE: BALLARPUR ISIN Code: INE294A01037
BSE 10:20 | 18 Jan 17.80 0.15
(0.85%)
OPEN

17.95

HIGH

17.95

LOW

17.60

NSE 10:06 | 18 Jan 17.65 0
(0.00%)
OPEN

17.85

HIGH

17.90

LOW

17.55

OPEN 17.95
PREVIOUS CLOSE 17.65
VOLUME 108024
52-Week high 22.70
52-Week low 11.30
P/E
Mkt Cap.(Rs cr) 2,302
Buy Price 17.70
Buy Qty 3881.00
Sell Price 17.80
Sell Qty 14882.00
OPEN 17.95
CLOSE 17.65
VOLUME 108024
52-Week high 22.70
52-Week low 11.30
P/E
Mkt Cap.(Rs cr) 2,302
Buy Price 17.70
Buy Qty 3881.00
Sell Price 17.80
Sell Qty 14882.00

Ballarpur Industries Ltd. (BALLARPUR) - Auditors Report

Company auditors report

TO THE MEMBERS OF BALLARPUR INDUSTRIES LIMITED

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of BallarpurIndustries Limited ('the Company') which comprise the balance sheet as at 31st March2017 the statement of profit and loss (including other comprehensive income) cash flowstatement and the statement of changes in equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information (herein afterreferred to as "standalone Ind AS financial statements") in which areincorporated the audited financial statements for the year ended on that date of the Unitof the Company audited by other auditor.

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder Section 133 of the Act read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation

of the standalone Ind AS financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

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 of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial 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 standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.

Basis for Qualified Opinion

We draw attention to Note 44 of the standalone Ind AS financial statements regardingthe liability for the put option on the Company pertaining to subsidiaries to be providedon the settlement.

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 Ind AS 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 including the IndAS of the financial position of the Company as at 31st March 2017 and itsfinancial performance including other comprehensive income its cash flows and the changesin equity for the year ended on that date.

Emphasis of Matter

We draw attention to Note 45 of the standalone Ind AS financial statements regardinginvocation of Strategic Debt Restructuring by the Lenders due to nonfulfillment of debtobligations. On the basis of projected business plan as agreed with the lenders thesefinancial statements have been prepared on a going concern basis. These financialstatements do not include any adjustments relating to the recoverability andclassification of recorded asset amounts and classification of liabilities that may benecessary if the Company is unable to continue as going concern.

Our opinion is not modified/qualified in respect of this matter.

Other Matter

We did not audit the Ind AS financial statements of Kamlapuram Unit of the Companyincluded in the standalone Ind AS financial statements of the Company whose Ind ASfinancial statements reflect total assets of Rs. 31043.98 lacs as at

31st March 2017 and total revenues of Rs. 118.38 lacs for the year ended onthat date as considered in the standalone Ind AS financial statements. The Ind ASfinancial statements of this Unit has been audited by the Unit Auditor whose report hasbeen furnished to us and our opinion in so far as it relates to the amounts anddisclosures included in respect of this Unit is solely on the report of such Unit Auditor.

Our opinion is not modified/qualified in respect 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 section 143(11) of the Act we givein the Annexure A a statement on the matters specified in the paragraph 3 and 4 of theorder.

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 except for the effects of the matter described in the Basis forQualified Opinion paragraph above proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books andreport of the Unit auditor;

c) Except for the effects of the matter described in the Basis for Qualified Opinionparagraph above the reports on the accounts of the Unit Kamlapuram of the Companyaudited under Section 143 (8) of the Act by such Unit Auditor 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 comprehensiveincome) cash flow statement and the statement of changes in equity dealt with by thisReport are in agreement with the books of account and report of the unit auditor;

e) In our opinion except for the effects of the matter described in the Basis forQualified Opinion paragraph above the aforesaid standalone Ind AS financialstatements comply with the Accounting Standards specified under Section 133 of the Actread with relevant rule issued thereunder;

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 on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in termsof Section 164 (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 standalone Ind AS financial statements - Refer Note 40 to the standaloneInd AS financial statements;

ii. the Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - Refer Note 22 & 27 to the standalone Ind AS financialstatements;

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company; and

iv. the Company has provided requisite disclosures in its standalone Ind AS financialstatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8 November 2016 to 30 December 2016 and these are in accordance with the books ofaccounts maintained by the Company. Refer Note 43 to the standalone Ind AS financialstatements.

ASHWIN MANKESHWAR

Partner

Membership No. 046219

For and on behalf of

K. K. Mankeshwar & Co.

Chartered Accountants

FRN: 106009W

New Delhi dated the

23rd May 2017

"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 Ind AS Financial Statements for the year ended 31st March2017 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.

No material discrepancies were noticed on such physical 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 Kamlapuram 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 isreasonable. The discrepancies noticed on verification between the physical stocks and thebook records were not material.

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 notgranted any loans or made investment or provided any security/ guarantee as covered byprovisions of Sections 185 and 186 of the Act. Accordingly Paragraph 3(iv) of the Orderis not applicable to the Company.

5. According to the information and explanation given to us and the examined by us theCompany has not accepted any deposits from the public during the year. AccordinglyParagraph 3(v) of the Order is not applicable to 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 Subsection (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 information and explanation given to us undisputed statutorydues including Provident Fund Employees State Insurance Income-Tax Sales tax ServiceTax Duty of Customs Duty of Excise Value added Tax Cess and other material statutorydues have been regularly deposited during the year by the Company with the appropriateauthorities though there has been a slight delay in few cases.

According to the information and explanations given to us no undisputed amountspayable in respect of 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 31st March 2017 for a period of more thansix months from the date they became payable except as given below:-

NAME OF THE STATUTE Amount in Lacs Period Actual date of payment
Provident Fund 138.10 May-16 to Aug- 16 Not Paid
Professional Tax 3.63 June-16 to Aug-16 Not Paid
Provident Fund 15.87 April-2016 Not Paid
Sale Tax .32 June-2016 Not Paid
Excise Duty & Service Tax 5.43 Apr-16 to Sep-16 Not Paid
TDS 102.48 July-16 to Sep-16 Not Paid
Professional Tax .07 Sep-16 Not Paid
Total 265.90

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 the company has not defaulted in repayments ofloans or borrowing to a financial institutions bank government or dues to debentureholders except as given below:

Sr. No. Bank/ Financial Institution Amount of default as at the balance sheet date( In Lacs) Due date of Repayment Payment Status
1. Exim Bank 714.28 31-Oct-2016 Not paid
2. Exim Bank 714.28 31-Jan-2017 Not Paid
3. State Bank of Travancore 125.00 23-Sep- 2016 Not Paid
4. State Bank of Travancore 125.00 23-Dec- 2016 Not Paid
5. State Bank of Travancore 125.00 23-Mar- 2017 Not Paid
6. The South Indian Bank 500.00 26-Mar-2017 Not Paid
7. IDBI Bank 125.00 31-Mar-2017 Not Paid
Total 2428.56

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 no managerialremuneration has been paid or provided under the provisions of Section 197 read withSchedule V to the Act. Accordingly paragraph 3(xi) of the Order is not applicable to theCompany.

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 Ind AS Standalone Financial Statements asrequired by the applicable 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 23rd1 May 2017

ANNEXURE - B TO THE AUDITORS' REPORT

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 BallarpurIndustries Limited ("the Company") as of 31st March 2017 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor the year ended on that 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 Companies Act 2013.

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 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 auditor's judgment including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor 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 Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the

Company's assets that could have a material effect on the Ind AS 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 31st March 2017based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

ASHWIN MANKESHWAR

Partner

Membership No. 046219

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

Chartered Accountants FRN: 106009W

New Delhi dated the 23rd May 2017