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Baba Arts Ltd.

BSE: 532380 Sector: Media
NSE: N.A. ISIN Code: INE893A01036
BSE 13:53 | 15 Apr 9.51 0.31
(3.37%)
OPEN

8.91

HIGH

9.89

LOW

8.91

NSE 05:30 | 01 Jan Baba Arts Ltd
OPEN 8.91
PREVIOUS CLOSE 9.20
VOLUME 5264
52-Week high 11.39
52-Week low 2.51
P/E 21.61
Mkt Cap.(Rs cr) 50
Buy Price 9.51
Buy Qty 41.00
Sell Price 9.78
Sell Qty 100.00
OPEN 8.91
CLOSE 9.20
VOLUME 5264
52-Week high 11.39
52-Week low 2.51
P/E 21.61
Mkt Cap.(Rs cr) 50
Buy Price 9.51
Buy Qty 41.00
Sell Price 9.78
Sell Qty 100.00

Baba Arts Ltd. (BABAARTS) - Auditors Report

Company auditors report

To the members of baba arts limited

Report on the standalone ind as financial statements opinion

We have audited the accompanying standalone ind as financial statements of baba artslimited (‘the company') which comprise the balance sheet as at 31 march 2020 thestatement of profit and loss (including other comprehensive loss) the statement of cashflows and the statement of changes in equity for the year then ended and a summary of thesignificant accounting policies and other explanatory information (herein after referredto as "standalone ind as financial statements"). In our opinion and to the bestof our information and according to the explanations given to us the aforesaid standalonefinancial statements give the information required by the companies act 2013 ("theact") in the manner so required and give a true and fair view in conformity with theindian accounting standards prescribed under section 133 of the act read with thecompanies (indian accounting standards) rules 2015 as amended ("ind as") andother accounting principles generally accepted in india of the state of affairs of thecompany as at march 31 2020 the profit and total comprehensive income changes in equityand its cash flows for the year ended on that date.

Basis for opinion

We conducted our audit of the standalone financial statements in accordance with thestandards on auditing specified under section 143(10) of the act (sas). Ourresponsibilities under those standards are further described in the auditor'sresponsibilities for the audit of the standalone financial statements section of ourreport. We are independent of the company in accordance with the code of ethics issued bythe institute of chartered accountants of india (icai) together with the independencerequirements that are relevant to our audit of the standalone financial statements underthe provisions of the act and the rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the icai's code ofethics. We believe that the audit evidence we have obtained is sufficient and appropriateto 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 mostsignificance 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 financialstatements as a whole and in forming our opinion there on and we do not provide aseparate opinion on these matters.

Description of key audit matters as follows :-

The key audit matters How the matter was addressed in our audit
A. Adoption of ind as 115 – revenue from contracts with Customer
As described in note no. 2(ii) to the standalone financial Statements the company adopted ind as 115 - revenue From contracts with customers which is a new revenue Accounting standard. The application and transition to This accounting standard is complex and is an area of Focus in the audit. We assessed the company's process to identify the impact Of adoption of the new accounting standard.
Our audit approach consisted testing of design And
Operating effectiveness of the internal controls And
Substantive testing as follows :
? Selected a sample of contracts and performed a Retrospective review of efforts incurred with estimated Efforts to identify significant variances and verify whether Those variations have been considered in estimating The remaining efforts to complete the contract.
? Performed analytical procedures and test of details for Reasonableness of incurred and estimated efforts.
B. Evaluation of uncertain tax positions The company has material uncertain tax positions Including matters under disputes which involves Significant judgment to determine the possible outcome Of these disputes ? We obtained details of completed tax assessments And demands for the year ended march 31 2020 from Management.
? We discussed with appropriate senior management And evaluated management's underlying Key
Refer note no. (28) of the financial statements Assumptions in estimating the tax provisions and;
? Assessed management's estimate to the possible
Outcome of the disputed cases.

Information other than the standalone financial statements and auditor's report thereon

The company's board of directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the managementdiscussion and analysis board's report including annexure to board's report corporategovernance and shareholder's information but does not include the standalone financialstatements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained 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 materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's responsibility for the standalone 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 there under.

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 indas financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the company or to cease operations or has norealistic alternative but to do so.

The board of directors are responsible for overseeing the company's financial reportingprocess.

Auditor's responsibility

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith sas will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with sas we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the act we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

Evaluate the appropriateness of accounting policies used and the reasonable ness ofaccounting estimates and related disclosures made by management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the company to cease tocontinue as a going concern.

Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and event s in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Emphasis of matter

We draw attention to note: 32 to the standalone financial results which describes thatthe extent to which the covid-19 pandemic will impact the company's results will depend onfuture developments which are highly uncertain.

Our opinion is not modified in respect of this matter

Report on other legal and regulatory requirements

As required by section 143(3) of the act we report that:

1. As required by the companies (auditor's report) order 2016 ("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 of the matters specified inparagraphs 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;

C) the balance sheet the statement of profit and loss the statement of cash flows andthe statement of changes in

Equity dealt with by this report are in agreement with the books of account;

D) in our opinion the aforesaid standalone ind as financial statements comply with theindian accounting standards

Specified under section 133 of the act read with relevant rule issued there under;

E) on the basis of the written representations received from the directors as on 31march 2020 taken on record by the

Board of directors none of the directors is disqualified as on 31 march 2020 frombeing 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 financialreporting 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 included in the auditor's report in accordancewith rule 11 of the companies

(audit and auditors) rules 2014 and to our best of our information and according tothe explanations given to us:-

A. The company has disclosed the impact of pending litigations on its financialposition in its standalone ind as

Financial statements – refer note 28 to the financial statements.

B. The company does not have any long-term contracts including derivatives contractsfor which there were any

Material foreseeable losses.

C. There has been no delay in transferring amounts required to be transferred to theinvestor education and

Protection fund by the company during the year ended.

3. The company has not paid/ provided for managerial remuneration in accordance withthe requisite approvals mandated by the provisions of section 197 read with schedule v ofthe act 31st march 2020.

Annexure "a" to the independent auditor's report

Re: baba arts limited

The annexure referred to in our independent auditor's report to the members of thecompany on the standalone ind as financial statements for the year ended 31st march 2020we report that :-

1. (a) the company has maintained proper records to show full particulars includingquantitative details and situation of

Its fixed assets.

(b) the fixed assets of the company have been physically verified by the managementduring the year and no material

Discrepancies between the book records and the physical inventory have been noticed. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the company and the nature of its assets.

(c) according to the information and explanations given to us and on the basis of ourexamination of the records of the

Company the title deeds of immovable properties are held in the name of the company.

2. Since the company is having only intellectual property rights as its inventorytherefore the para 3(ii) of the order relating to physical verification of inventories isnot applicable.

3. The company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the companies act.Hence the requirements of sub clause (a) (b) & (c) to clause (iii) of paragraph 3of the said order are not applicable to the company.

4. In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 186 of the companies act 2013 inrespect of loans given. The company has not granted any loans or made any investments orprovided any guarantees or security to the parties covered under section 185 of the act.

5. The company has not accepted the deposits from public as per the provisions ofsections 73 to 76 or any other relevant provisions of the companies act and the rulesframed there under.

6. The central government has not prescribed the maintenance of cost records undersub-section (1) of section 148 of the companies act for any activities of the company.

7. (a) in our opinion and according to explanation given to us the company is regularin depositing undisputed statutory

Dues including provident fund employees' state insurance income-tax goods andservice tax sales-tax wealth tax service tax duty of customs duty of excise valueadded tax cess and any other statutory dues with the appropriate authorities.

(b) there is no arrears of outstanding statutory dues as at the last day of thefinancial year concerned for a period of

More than six months from the date they became payable.

(c) according to the information and explanations given to us and the records of thecompany examined by us there

Are no dues in respect of income-tax sales tax wealth tax service tax gst exciseduty custom duty and cess as at march 31 2020 which have not been deposited on accountof any dispute. The particulars of dues of value added tax and service tax as at march 312020 which has not been deposited on account of dispute is as follows : -

Nature of statue Nature of dues Amount in rs. Period to which Forum where the
Amount relates Disputeis pending
Maharashtra value added tax Sales tax 1884486 2010-11 Sales tax appellate tribunal
Maharashtra value added tax Sales tax 2853 2013-14 Commissioner of sales tax
Service tax act Service tax 76470058 2011-15 Appeal before cestat

8. As per the information & explanation given to us the company has not borrowedmoney from banks/financial institutions nor issued any debentures and hence the questionof default in repayment of dues does not arise. Accordingly clause (viii) of paragraph 3of the order is not applicable.

9. The company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly clause(ix) of paragraph 3 of the order is not applicable.

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 during the course of our audit.

11. According to the information and explanations given to us and on the basis of ourexamination of the records of the

Company the company has not paid/provided for managerial remuneration.

12. In our opinion and according to the information and explanations given to us thecompany is not a nidhi company.

Accordingly clause (xii) of paragraph 3 of the order is not applicable.

13. According to the information and explanations given to us and based on ourexamination of the records of the company transactions with the related parties are incompliance with sections 177 and 188 of the act where applicable and

Details of such transactions have been disclosed in the financial statements asrequired by the applicable accounting standards.

14. According to the information and explanations give to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible

Debentures 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) ofparagraph 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.

Annexure "b" to the independent auditor's report of even date on thestandalone financial statements of baba arts limited

Report on the internal financial controls under clause (i) of sub-section 3 of section143 of the companies act 2013 ("the act")

I have audited the internal financial controls over financial reporting of baba artslimited ("the company") as of march 31 2020 in conjunction with my audit of thefinancial statements of the company for 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". 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

My responsibility is to express an opinion on the company's internal financial controlsover financial reporting based on my audit. I conducted our audit in accordance with theguidance note on audit of internal financial controls over financial reporting (the"guidance note") and the standards on auditing to the extent applicable to anaudit of internal financial controls both issued by the institute of charteredaccountants of india. Those standards and the guidance note require that i comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

My audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness.

My audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

I believe that the audit evidence i have obtained is sufficient and appropriate toprovide a basis for my 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 financialreporting includes those policies and procedures that

1. Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2. Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

3. Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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.

Opinion

In my 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 2020 based 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 accountant of india.

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