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Balaxi Pharmaceuticals Ltd.

BSE: 532597 Sector: Others
NSE: BALAXI ISIN Code: INE618N01014
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Balaxi Pharmaceuticals Ltd. (BALAXI) - Auditors Report

Company auditors report

To the Members of Balaxi Pharmaceuticals Limited (Formerly Known asBalaxi Ventures Limited)

Opinion

We have audited the accompanying IND AS Standalone financial statementsof Balaxi Pharmaceuticals Limited (Formerly Known as Balaxi Ventures Limited) ("theCompany") which comprise the balance sheet as at 31stMarch 2021 the statement ofProfit and Loss for the year then ended and Cash Flow Statement and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information.

In our opinion and to the best of our information and according to theexplanations given to us 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 March 31 2021 and Profit for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Companies Act 2013. Our responsibilitiesunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Standalone Financial Statements section of our report. We are independent ofthe Company in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the standalone financial statements under the provisions of the Companies Act 2013 andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for ouropinion.

Key Audit Matters

Key audit matters 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 theconsolidated financial statements as a whole and in forming our opinion thereon and wedo not provide a separate opinion on these matters.

Depending on the facts and circumstances of the entity and the Auditthere are no key audit matters to communicate in the Audit Report.

Management's Responsibility for the Standalone FinancialStatements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation and presentation of these Ind AS standalone financial statements that give atrue and fair view of the financial position financial performance(including the othercomprehensive income) cash flows and Statement of Changes in Equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards specified under Section 133 of the Act read with RelevantRules issued thereunder. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the Standalone Ind AS financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a goingconcern disclosingas applicable matters related to going concern and using the going concern basis ofaccounting unless managementeither intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibility

Our objectives are to obtain reasonable assurance about whether theStandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal financial controls relevantto the audit in order to design audit Procedures that is appropriate in the circumstances.Under section 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists; we are required to draw attention in our auditor's report to therelated disclosures in the Standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

• Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

• We communicate with those charged with governance regardingamong other matters the planned scope and timing of the audit and significant auditfindings including any significant deficiencies in internal control that we identifyduring our audit.

• We also provide those charged with governance with a statementthat we have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ('theorder') issued by the Central Government of India in terms of sub-section (11) of section143 of the Act we give in the "Annexure A" a statement on the mattersspecified in the paragraph 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.

(c) the Balance Sheet Statement of Profit and Loss(including OtherComprehensive Income) the Cash Flow Statement and the Statement of changes in Equitydealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone financial statementscomply with the Indian Accounting Standards specified under Section 133 of the Act readwith Relevant Rules issued there under.

(e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164 (2) of the Act.

(f) With respect to the adequacy of internal financial controls overfinancial reporting of the company and the operating effectiveness of such controls referto our separate report in "Annexure B"; and

(g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company does not have any pending litigations which would impactits financial position.

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the company.

Annexure referred to in paragraph 1 of Our Report of even date to themembers of M/s. Balaxi Pharmaceuticals Limited (Formerly Known as Balaxi Ventures Limited)on the accounts of the Company for the year ended 31st March 2021 Under "Report onother Legal & Regulatory Requirements"

i. (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant andEquipment.

(b) Property Plant and Equipment have been physically verified by themanagement at regular intervals; as informed to us no material discrepancies were noticedon such verification. In our opinion the frequency of verification is reasonable.

(c) As the Company does not have immovable properties holding of titleas this clause is not applicable to the company.

ii. According to the information and explanations given to us and onthe basis of our examination of the records of the company inventories have beenphysically verified at reasonable intervals of time and no material discrepancies havebeen found.

iii. The company has not granted any loans secured or unsecured tocompanies firms and Limited Liability partnerships or other parties covered in theregister maintained under section 189 of the Companies Act 2013.

iv. In our opinion and according to the information and explanationsgiven to us the Company has not given any loans guarantees and securities as referred toin section 185 and 186 of the Act. The investments made are in compliance with section 186of the Act.

v. In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits within the meaning of section 73 to76 or any other relevant provisions of the Companies Act2013 and the rules framed thereunder.

vi. The maintenance of cost records has not been specified by theCentral Government under section 148(1) of the Companies Act 2013 for the businessactivities carried out by the Company.

vii. (a) According to the information and explanations given to us andbased on the records of the company examined by us the company is regular in depositingthe undisputed statutory dues including Provident Fund Employees' State InsuranceIncome-tax Goods and Services Tax Customs Duty and other material statutory dues asapplicable.

(b) There are no undisputed amounts payable in respect of ProvidentFund Employees' State Insurance and Income-tax and other material statutory duesin arrears as at 31st March 2021 for a period of more than 6 months from the date theybecame payable.

(c) According to the information and explanations given to us and basedon the records of the company examined by us there are no dues of Income Tax and anyother statutory dues which have not been deposited on account of any disputes.

viii. In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of dues to banks or financialinstitutions. The company has not issued any debentures.

ix. According to the information and explanations given to us theCompany has not raised moneys by way of initial public offer or further public offerincluding debt instruments and term loans. Accordingly the provisions of clause 3(ix) ofthe order are not applicable to the company.

x. During the course of examination of books of accounts and records ofthe company carried out in accordance with the generally accepted auditing practices inIndia and according to information and explanations given to us we have neither comeacross any instance of material fraud on or by the company noticed or reported during theyear nor have been informed of such cases by the management.

xi. According to information and explanation given to us and based onour examination of records of the company the Company has paid managerial remuneration inCompliance with the provisions of section 197 of the Act.

xii. In our opinion and according to information and explanations givento us the company is not a Nidhi Company.

xiii. The Company has entered into transactions with related parties incompliance with the provisions of section 177 and 188 of the Act. The details of suchrelated party transactions have been disclosed in the Standalone financial statements asrequired under Indian Accounting standard (Ind AS) 24 related party disclosures specifiedunder section 133 of the Act read with relevant rules issued there under.

xiv. According to the information and explanations given by themanagement the company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year.

xv. According to information and explanations given to us and to thebest of our knowledge and belief the company has not entered into any non-cashtransactions with directors or persons connected with the directors.

xvi. The Company is not required to be registered under section 45-IAof The Reserve Bank of India Act 1934.

Annexure B to the Auditor's Report

"Annexure B" referred to in paragraph 2(e) under "Reporton other legal and Regulatory Requirements" section of report on Standalone Ind ASfinancial statements of even date to the members of M/s. Balaxi Pharmaceuticals Limited(Formerly Known as Balaxi Ventures Limited) on the Standalone Ind AS financial statementfor the year ended 31st march 2021.

Report on the Internal Financial Controls under Clause (i) ofsubsection 3 of Section 143 of the Companies Act 2013 (‘the Act')

We have audited the internal financial controls over financialreporting of Balaxi Pharmaceuticals Limited (Formerly Known as Balaxi Ventures Limited)('the Company') as of 31st March 2021 in conjunction with our audit of the Standalone IndAS financial 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 andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India ('ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to the Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (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 were established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditors' judgment including the assessment of therisks of material misstatement of the Standalone Ind AS financial statements whether dueto fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting 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 including Indian Accounting Standards. Acompany's internal financial control over financial reporting includes those policies andprocedures 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 asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the Company arebeing made only in accordance with authorizations of the Management and directors of theCompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of

the Company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2021 based onthe 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.

For P Murali& Co.
Chartered Accountants
Firm Regn No. 007257S
A Krishna Rao
Partner
Membership No. 020085
UDIN: 21020085AAAANW3476
Place: Hyderabad
Date: May 20 2021

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