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Bal Pharma Ltd.

BSE: 524824 Sector: Health care
NSE: BALPHARMA ISIN Code: INE083D01012
BSE 00:00 | 27 May 99.25 -1.25
(-1.24%)
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102.15

HIGH

102.15

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98.50

NSE 00:00 | 27 May 99.45 -1.15
(-1.14%)
OPEN

101.55

HIGH

104.00

LOW

97.50

OPEN 102.15
PREVIOUS CLOSE 100.50
VOLUME 2777
52-Week high 148.50
52-Week low 88.00
P/E 15.18
Mkt Cap.(Rs cr) 155
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 102.15
CLOSE 100.50
VOLUME 2777
52-Week high 148.50
52-Week low 88.00
P/E 15.18
Mkt Cap.(Rs cr) 155
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bal Pharma Ltd. (BALPHARMA) - Auditors Report

Company auditors report

To the Members of Bal Pharma Limited

Report on theAudit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Bal Pharma Limited (“theCompany”) which comprise the balance sheet as at 31st March 2021 and the statementof Profit and Loss (including other comprehensive income) Statement of Changes in Equityand Statement of Cash Flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation.

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 March 31 2021 and profit (including other comprehensive income) changes in equityand its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone Financial Statements section of our report. We are independent of the Companyin accordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the CompaniesAct 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics.We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of Matter

We further refer to Note 63 with regard to recoverability of

outstanding receivables from the subsidiary companies.

Our opinion is not modified in respect of this matter.

KeyAudit Matters

Key audit matters (‘KAM') are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters.

KeyAudit Matters How our audit addressed the key audit matter
Revenue from sale of goods is recognised when a promise in a customer contract (performance obligation) has been satisfied by transferring control over the promised goods to the customer. We applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence:
Control is usually transferred upon shipment delivery to in accordance with the delivery and acceptance terms agreed with the customers. The amount of revenue to be recognised is based on the consideration expected to be received in exchange for goods excluding trade discounts volume discounts sales returns and any taxes or duties collected on behalf of the government which are levied on sales such as sales tax value added tax goods and services tax etc. where applicable. Assessed the appropriateness of the Company's revenue recognition accounting policies including those relating to discounts and sales return and assessed compliance with the policies in terms of applicable accounting standards.
Assessing the journals posted to revenue to identify any unusual items.
Revenue is one of the key performance indicators of the Company and there could be a risk that revenue is recognized in the incorrect period or before the control has been transferred to the customer Performing substantive testing by selecting samples of revenue transactions recorded during the year and for the selected samples verifying the underlying documents such as sales invoices / contracts and dispatch/shipping documents.
Impact on revenue recognition due to impact of COVID-19 including (i) the possibility of constraints to render services/ provide goods; (ii) onerous obligations; (iii) Constraints in delivering goods due to the lockdown and restraint in movement of goods.
KeyAudit Matters How our audit addressed the key audit matter
The carrying value of recover abilities from subsidiaries as at March 31 2021 is Rs 946.95 lakhs. Testing design implementation and operating effectiveness of key controls over the impairment assessment process and forecasts used by the Company.
The Company performs the annual assessment of recover abilities to identify any indicators of impairment. Based on internal and external factors considered where such evidence exists impairment loss is determined and recognised in accordance with note 3.05 of accounting policies to the standalone financial statements Assessing the managements plans for the recoveries of the amount and assessing the feasibility of the same.
We identified the assessment of impairment indicators and resultant impairment losses in respect of above balances as a key audit matter because of: Challenging the Company's key assumptions Evaluating the adequacy disclosure made in the standalone nancial statements.
The significance of the amount of these in the Standalone Balance Sheet; and
The degree of management judgement involved in determining whether there was objective evidence of impairment of investments

Information Other than the Financial Statements and

Auditor's ReportThereon

The Company's management and Board of Directors are responsible for the otherinformation.The other information comprises the information included in the Company'sannual report but does not include the standalone financial statements and our auditors'report thereon. Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon. Inconnection with our audit of the standalone financial statements our responsibility is toread the other information and in doing so consider whether the other information ismaterially inconsistent with the standalone financial statements or our knowledge obtainedin the audit or otherwise appears to be materially misstated. If based on the work wehave performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact.We have nothing to report in this regard.

Responsibilities of Management for the Standalone Financial

Statements

The Company's Management and Board of Directors is responsible for the matters statedin section 134(5) of the Companies Act 2013 (“the Act”) with respect to thepreparation of these standalone financial statements that give a true and fair view of thefinancial position financial performance changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of 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.

In preparing the standalone financial statements the management and Board of Directorsis responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone

Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

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

Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(I) of theCompanies Act 2013 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 reasonableness 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit ndings 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 auditors' 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.

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 subsection (11) of section 143 ofthe Companies Act 2013 we give in the “Annexure A” a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

2) As required by Section 143(3) of theAct we report that: a) We have sought andobtained all the information and explanations which to the best of our knowledgeand belief were necessary for the purposes of our audit. b) In our opinion proper booksof account as required by law have been kept by the Company so far as it appearsfrom our examination of those books.

c) The Balance Sheet The Statement of Changes in Equity the Statement ofProfit and Loss (including other comprehensive income) and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards (Ind AS) specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014.

e) On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 from being appointed as a director in terms of Section164 (2) of theAct

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 ourseparate Report in “Annexure B”.

g) 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 financial positionin its standalone financial statements Refer Note 41 to the standalone financialstatements; ii) The Company did not have any long-term contracts including derivativecontracts for 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.

iv) The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2021.

3. With respect to the matter to be included in theAuditors' Report under section197(16):

According to the information & explanations given to us and based on ourexamination of the records of the Company the Company has paid / provided formanagerial remuneration in accordance with the provisions of section 197 of theAct.

for NSVM and Associates
Chartered Accountants
Firm's registration number: 010072S
G.C.S Mani
Partner
Membership number: 036508
Place: Bengaluru
Date: 29th June 2021
UDIN: 21036508AAAADD9202

Annexure A to the Independent Auditor's Report of even date to the members of BalPharma Limited on the standalone financial statements for the year ended 31 March 2021

Based on the audit procedures performed for the purpose of reporting a true and fairview on the standalone financial statements of the Company and taking into considerationthe information and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that

i) a. The Company has maintained proper records showing full includingquantitative details and situation of property plant and equipment.

b. The Company has a regular programme of physical veri cation of its propertyplant and equipment by which they are veri ed in a phased manner which in our opinion isreasonable having regard to the size of the Company and the nature of its fixed assets. Nomaterial discrepancies were noticed on such veri cation.

c. The title deeds of immovable properties (which are included under thehead‘Property Plant and Equipment') are held in the name of the Company. In respectof immovable properties of Land that have been taken on lease and disclosed in financialstatements the lease agreements are in the name of the Company where the Company islessee in the agreement.

ii) As explained to us the inventories have been physically veri ed by theManagement at reasonable intervals during the year. In our opinion the frequency of suchveri cation is reasonable. The discrepancies noticed on such physical veri cation betweenphysical stock and book records were not material and have been adequately dealt with inthe books of account.

iii) The Company has granted unsecured loans to companies covered in the registermaintained under Section 189 of the Act and with respect to the same:

a. in our opinion the terms and conditions of grant of such loans are not primafacie prejudicial to the Company's interest; b. the schedule of repayment ofprincipal and payment of interest has not been stipulated and we are unable to comment onthe regularity of repayment/ receipts of the principal amount and the interest; c.as schedule of repayment of principal and payment of interest is not stipulated we areunable to comment on whether there is any overdue amount in respect of loans granted tosuch companies.

iv) In respect of loans investments and guarantees the provisions of Section 185and 186 of the CompaniesAct 2013 have been complied with.

v) The Company has not accepted any deposits to which the provisions of Section 73to 76 or any other relevant provisions of the Companies Act and the rules framed thereunder and the directions issued by the RBI are applicable. Hence paragraph 3(v) of CARO isnot applicable to the Company.

vi) We have broadly reviewed the cost records maintained by the Company pursuant tothe Companies (Cost Accounting Records) Rules as amended specified by the CentralGovernment under Section 148(1) of the Companies Act and are of the opinion that primafacie the prescribed cost records have been maintained. We have however not made adetailed examination of the cost records with a view to determine whether they areaccurate or complete.

vii)(a) undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of custom duty of excise value addedtax cess have generally been regularly deposited with the appropriate authorities thoughthere has been a slight delay in a few cases.

According to the information and explanations given to us no undisputed amountspayable in respect of income tax service tax sales tax customs duty excise duty andcess were in arrears other than that stated below as at 31 March 2021 for a period ofmore than six months from the date they became payable.

Statement of Arrears of Statutory Dues Outstanding for More than Six Months

Nature of Statute Nature of Dues Amount (Rs.) Period to which the amount relates Due date Date of payment
Income Tax Dividend Distribution Tax 29.13 Lakhs Divided Declared in AGM held in September 2019 7th October 2019 NA The company is taking steps to pay the Dividend Distribution Tax

(b) On the basis of our examination of the documents and records of the Companythere are no dues of IncomeTax SalesTax ServiceTax Customs Duty Excise Duty and Cesswhich have not been deposited on account of an any dispute except as enumerated hereinbelow which are pending before respective authorities as mentioned there against:

Name of the statute Nature of dues Amount Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 99.10 lakhs FY 2016-17 (AY 2017-18) Commissioner of Income Tax (Appeals)
Name of the statute Nature of dues Amount Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 60.55 lakhs FY 2018-19 (AY 2019-20) Commissioner of Income Tax (Appeals)

The Company has received show cause notices under the Central Excise laws and ServiceTax laws in for the years 2007-08 onwards which in various stages of assessment as at 31March 2021. The assessments are in progress and the Company has not received theassessment order in respect of the same. In certain cases the Company has preferred anappeal which has been remanded back to the original authority for reassessment.

viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of dues to its any banks and financialinstitutions other than those stipulated below.

Amount of Default
Particulars Period of Default Remarks
(INR)
Vehicle Loan from Canara Bank Rs 105713 Repayable between March 2020 till September 2020 Moratorium period
Term Loan from HDFC Bank Rs 1057403 4 days Due to technical issues with the Bank
Vehicle Loan from HDFC Bank Rs 16410 24 days Due to technical issues with the Bank
Term Loan from South Indian Bank Rs 1903187 Repayable between March 2020 till September 2020 Moratorium period

As stated in note 22 (vii) to the financial statements the Company has applied formoratorium towards interest and principal repayments towards borrowings from certain banksand financial institutions for month of March 2021.

ix) According to the information and explanations given to us the term loansobtained by the Company have been utilised for the purpose for which it was raised.Further the Company has not raised any money by way of public issue or further publicoffer (including debt instruments) during the year.

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

xi) According to the information & explanations given to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the provisions of section 197 of theAct.

xii) In our opinion and according to the information and explanations given to usthe Company is not a Nidhi company. Accordingly clause 3(xii) of the Order is notapplicable.

xiii) All transactions with the related parties are in compliance with Section 188and 177 (where applicable) of Companies Act 2013 and the details thereof have beendisclosed in the standalone financial statements as required by theAccounting standardsand CompaniesAct 2013.

xiv) 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 duringthe year.

xv) 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 paragraph 3(xv) ofthe Order is not applicable.

xvi) The Company is not required to be registered under section 45-IA of theReserve Bank of IndiaAct 1934.

 

for NSVM and Associates

Chartered Accountants

Firm's registration number: 010072S

G.C.S Mani

Partner

Membership number: 036508

Place: Bengaluru

Date: 29th June 2021

UDIN: 21036508AAAADD9202

Annexure B to the Independent Auditors' Report

on the standalone financial statements of Bal Pharma Limited for the period ended 31March 2021

Report on the Internal Financial Controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 (‘theAct')

(Referred to clause (f) of paragraph 2 under ‘Report on other Legal and Regulatoryrequirements' Section of our report to the members of Bal Pharma Limited of even date)

Opinion

We have audited the internal financial controls with reference to financial statementsof Bal Pharma Limited (“the Company”) as of 31 March 2021 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2021 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the “Guidance Note”).

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. 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 company's policies the safeguarding ofits 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 (hereinafter referred toas“theAct”).

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing 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 standalone financial statements whether due to fraud orerror.

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 withreference to financial statements.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include 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 authorisations of management and directors of the company; and

3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

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.

for NSVM and Associates
Chartered Accountants
Firm's registration number: 010072S
G.C.S Mani
Partner
Membership number: 036508
Place: Bengaluru
Date: 29th June 2021
UDIN: 21036508AAAADD9202

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