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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 Ventures Limited

Opinion

We have audited the financial statements of Balaxi Ventures Limited ("theCompany") which comprise the balance sheet as at 31st March 2019 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 the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2019 and Profit 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 theFinancial Statements section of our report. We are independent of the Company inaccordance 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 Companies Act 2013 and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Depending on the facts and circumstances of the entity and the Audit there are no keyaudit matters to communicate in the Audit Report.

Management's Responsibility for the 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 preparationand presentation of these Ind AS financial statements that give a true and fair view ofthe financial position financial performance (including the other comprehensive income)cash flows and Statement of Changes in Equity of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards specified under 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 Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

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 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 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 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 inorder to design audit Procedures that is 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 reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 exists;we 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

• Materiality is the magnitude of misstatements in the financial statements thatindividually 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 othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

• We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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 sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inthe 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 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.

a) the Balance Sheet Statement of Profit and Loss(including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of changes in Equity dealt with by thisReport are in agreement with the books of account;

(c) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Relevant Rulesissued there under.

(d) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in termsof Section 164 (2) of the Act.

(e) With respect to the adequacy of internal financial controls over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

(f) 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 does not have any pending litigations which would impact its financialposition.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

Yours faithfully

For P Murali & Co.

Chartered Accountants

Firm RegnNo.007257S

A. Krishna Rao

Partner

Membership No. 020085

Place: Hyderabad

Date: May 03 2019

Annexure referred to in paragraph 1 of Our Report of even date to the members of M/s.Balaxi Ventures Limited on the accounts of the company for the year ended 31stMarch 2019 Under "Report on other Legal & Regulatory Requirements"

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

(b) Fixed assets have been physically verified by the management at regular intervals;as informed to us no material discrepancies were noticed on such verification. In ouropinion the frequency of verification is reasonable.

(c) As the Company does not have immovable properties holding of title as this clauseis not applicable to the company.

(ii.) According to the information and explanations given to us and on the basis of ourexamination of the records of the company inventories have been physically verified atreasonable intervals of time and no material discrepancies have been found.

(iii.) The company has not granted any loans secured or unsecured to companiesfirms and Limited Liability partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013. Hence this clause is notapplicable to the company.

(iv.) In our opinion and according to the information and explanations given to us theCompany has not given any loans investments guarantees and securities therefore section185 and 186 of the Act with respect to the loans and investments do not apply.

(v.) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits within the meaning of section 73 to 76 or any otherrelevant provisions of the Companies Act2013 and the rules framed there under.

(vi.) We have broadly verified the books of accounts and records maintained by thecompany relating to the copper and copper alloy products pursuant to the order made by theCentral Government for maintenance of cost records under sub-section (1) of section 148 ofthe Act and are of the opinion that prima facie the prescribed accounts and recordshave been maintained. We have not however made a detailed examination of records with aview to determine whether they are accurate and complete.

(vii.) (a) According to the information and explanations given to us and based on therecords of the company examined by us the company is regular in depositing the undisputedstatutory dues including Provident Fund Employees' State Insurance Income-tax Goodsand Services Tax Customs Duty and other material statutory dues as applicable.

(b) There are no undisputed amounts payable in respect of Provident Fund Employees'State Insurance and Income-tax other material statutory dues in arrears as at 31stMarch 2019 for a period of more than 6 months from the date they became payable.

(c) According to the information and explanations given to us and based on the recordsof the company examined by us there are no dues of Income Tax and any other statutorydues which have not been deposited on account of any disputes.

(viii.) The Company has not borrowed any loans from bank or financial institutions. Thecompany has not issued any debentures.

(ix.) According to the information and explanations given to us the Company has notraised moneys by way of initial public offer or further public offer including debtinstruments and term loans. Accordingly the provisions of clause 3(ix) of the order arenot applicable to the company.

(x.) During the course of examination of books of accounts and records of the companycarried out in accordance with the generally accepted auditing practices in India andaccording to information and explanations given to us we have neither come across anyinstance of material fraud on or by the company noticed or reported during the year norhave been informed of such cases by the management.

(xi.) According to information and explanation given to us and based on our examinationof records of the company the Company has not paid/provided for managerial remuneration.

(xii.) In our opinion and according to information and explanations given to us thecompany is not a Nidhi Company. Therefore the provisions of clause 3(xii) of the orderare not applicable to the company.

(xiii.) The Company has entered into transactions with related parties in compliancewith the provisions of section 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under IndianAccounting standard (Ind AS) 24 related party disclosures specified under section 133 ofthe Act read with relevant rules issued there under.

(xiv.) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures. Therefore the provisions of clause3(xiv) of the order are not applicable to the company.

(xv.) According to information and explanations given to us and to the best of ourknowledge and belief the company has not entered into any non-cash transactions withdirectors or persons connected with the directors. Therefore the provisions of clause3(xv) of the order are not applicable to the company.

(xvi.) The Company is not required to be registered under section 45-IA of The ReserveBank of India Act 1934. Accordingly the provisions of clause 3(xvi) of the order are notapplicable to the Company.

Yours faithfully

For P Murali & Co.

Chartered Accountants

Firm RegnNo.007257S

A. Krishna Rao

Partner

Membership No. 020085

Place: Hyderabad

Date: May 03 2019

"Annexure B" referred to in paragraph 2(e) under"Report on other legaland Regulatory Requirements" section of report on Ind AS financial statements of evendate to the members of Balaxi Ventures Limited on the Ind AS financial statement for theyear ended 31st march 2019.

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 BalaxiVentures Limited (‘the Company') as of 31st March 2019 in conjunction withour audit of the Ind AS financial statements of the Company for the year ended on thatdate.

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'). 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 the Company's policies the safeguardingof its 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.

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 deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols 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 auditors' judgment including the assessment of the risks ofmaterial misstatement of the Ind AS financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles including Indian Accounting Standards. A company's internalfinancial control over financial reporting includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the Company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorizations of the Management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company's assets that could have a material effect on the financialstatements.

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 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

Yours faithfully

For P Murali & Co.

Chartered Accountants

Firm RegnNo.007257S

A. Krishna Rao

Partner

Membership No. 020085

Place: Hyderabad

Date: May 03 2019

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