TO THE MEMBERS OF BALKRISHNA PAPER MILLS LIMITED
Report on the audit of the Financial Statements Opinion
We have audited the accompanying financial statements of Balkrishna Paper Mills Limited('the Company') which comprise the balance sheet as at 31st March 2020 thestatement of profit and loss (including other comprehensive income) 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.
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 31stMarch 2020 and its loss total comprehensive income the changes in equity and its cashflows for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) as specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the 'Auditor's Responsibilities for the Audit ofthe Financial 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 Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the financial statements.
Material Uncertainty Related to Going Concern
We draw attention to Note No. 43 with respect to the losses incurred by the company anderosion of its net worth and preparation of the financial statements on going concernassumption based on the reasons and assumptions stated in the aforesaid note. Thecompany's ability to continue as a going concern is dependent on generation of theexpected cash flows to be able to meet its obligations as and when they arise.
Our opinion is not modified in respect of the same.
Emphasis of Matter
We draw attention to Note No.44 of the accompanying financial results which describesthe management's evaluation of impact of uncertainties related to COVID-I9 and itsconsequential effects on the operations of the Company.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements for the financial year ended 31stMarch 2020. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
In view of continued losses the Company's performance is dependent on properaccounting of Revenue and is therefore susceptible to misstatement. Cut-off is the keyassertion in so far as revenue recognition is concerned since an inappropriate cut-offcan result in material misstatement of results for the year.
Our audit procedures with regard to revenue recognition included testing controlsautomated and manual dispatches/deliveries inventory reconciliations and assessing therecoverability of trade receivable balances substantive testing for cut-offs andanalytical review procedures.
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 financial statements and our auditors' reportthereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the state of affairs profit / loss (including othercomprehensive income) changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection and applicationof appropriate 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 of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements management and Board of Directors areresponsible 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.
Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditor's Responsibilities for the Audit of the 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 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness 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 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 auditors'report. 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.
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 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' 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 (Auditors' Report) Order 2016 (the Order)issued by the Central Government of India in terms of Section 143(11) of the Act we givein Annexure A a statement on the matters specified in paragraphs 3 and 4 ofthe Order to the extent applicable.
(A) 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 (including other comprehensiveincome) the Statement of Changes in Equity and the Statement of Cash Flows dealt with bythis Report are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in termsof Section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure B.
(g) In our opinion the managerial remuneration for the year ended 31stMarch 2020 has been paid/provided by the Company to its directors in accordance with theprovisions of section 197 read with Schedule V to the Act;
(h) With respect to the other matters to be included in the Auditors' 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 as at 31stMarch 2020 on its financial position in its financial statements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
|FOR JAYANTILAL THAKKAR & CO |
|Chartered Accountants |
|(Firm Reg .No.104133W) |
|VIRAL A. MERCHANT |
|Place : Mumbai ||PARTNER |
|Date : 17th July 2020 ||Membership No.116279 |
| ||UDIN: 20116279AAAAAV3270 |
ANNEXURE - A TO AUDITORS' REPORT
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the financial statements for the year ended 31st March 2020 we report that:
(i) (a) In our opinion the Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.
(b) As explained to us physical verification of these fixed assets has been conductedby the management at intervals during the year which in our opinion is reasonable havingregard to the size of the Company and the nature of its assets. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.
(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 areheld in the name of the Company.
(ii) As explained to us physical verification of inventory has been conducted atreasonable intervals by the management and discrepancies noticed on such physicalverification between physical stocks and book records were not material considering theoperations of the Company and the same have been properly dealt with in the books ofaccount.
(iii) In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to any companies firms LimitedLiability Partnerships or other parties as covered in the register maintained underSection 189 of the Act. Accordingly the provisions of clause 3(iii) (a) (b) and (c) ofthe order are not applicable.
(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto loans investments and guarantees made.
(v) In our opinion and according to the information and explanations given to us theCompany has not accepted any deposit within the meaning of Section 73 to 76 of the Actand the rules framed thereunder.
(vi) We have broadly reviewed the books of account maintained by the Company in respectof products where pursuant to the Rules made by the Central Government the maintenanceof cost records have been prescribed under Section 148 (1) of the Act and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. We have not however made a detailed examination of the records with a viewto determining whether they are accurate or complete.
(vii) (a) According to the records of the Company and the information and explanationsgiven to us
the Company has been generally regularly depositing with the appropriate authoritiesundisputed statutory dues including Provident Fund Employees' State Insurance Incometax Sales-Tax Service tax Duty of Customs Duty of Excise Value added Tax Goods andService Tax Cess and any other statutory dues applicable to it. There are no materialundisputed statutory dues as referred to above as at 31st March 2020outstanding for a period of more than six months from the date they become payable.
(b)According to the information and explanations given to us the dues in respect ofSales Tax Cess and Excise Duty that have not been deposited with the appropriateauthorities on account of dispute and the forumwhere the disputes are pending are givenbelow :-
|Name of Statute ||Nature of Dues ||Amount (' in Lakhs) ||Period to which the Amount Relates ||Forum where dispute is pending |
|Sales Tax Act ||Sales Tax (Including Interest and Penalty) ||34.81 228.22 ||1991-1992 2002-2003 ||Jt. Commissioner of Sales Tax (Appeals) Assessing Authority |
|Water Cess ||Cess ||277.97 ||1992-2020 ||Court of Civil Judge Senior Division Thane |
|Central Excise Act ||Excise Duty (Including Interest and Penalty) ||1.22 ||2008-2015 ||Assessing Authority |
(viii) Based on our audit procedures and according to the information and explanationsgiven by the management the Company has not defaulted in repayment of loans from bank.Further as per the records of the Company during the year there were no loans orborrowings from any financial institution government or debenture holders.
(ix) In our opinion and according to the information and the explanations given to usthe term loans have been applied for the purposes for which they were obtained. Further asper the records the Company did not raise any money by way of initial public offer orfurther public offer (including debt instruments).
(x) Based upon the audit procedures performed and to the best of our knowledge andbelief and according to the information and explanations given to us no fraud by thecompany or any fraud on the Company by its officers or employees has been noticed orreported during the year.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
(xiii) 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 suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(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 noncashtransactions 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 the ReserveBank of India Act 1934.
|FOR JAYANTILAL THAKKAR & CO |
|Chartered Accountants |
|(Firm Reg .No.104133W) |
|VIRAL A. MERCHANT |
|Place : Mumbai ||PARTNER |
|Date : 17th July 2020 ||Membership No.116279 |
| ||UDIN: 20116279AAAAAV3270 |
ANNEXURE - B TO INDEPENDENT AUDITORS' REPORT Report on the Internal Financial Controlsunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 (theAct)
We have audited the internal financial controls over financial reporting of BalkrishnaPaper Mills Limited (the Company) as of 31st March 2020 inconjunction with our audit of the financial statements of the Company for the year endedon that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI'). 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.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the Guidance Note) and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the 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. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements. InherentLimitations 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.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31st March 2020 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
|For JAYANTILAL THAKKAR & CO. |
|Chartered Accountants |
|(Firm Reg. No. 104133W) |
| ||VIRAL A. MERCHANT |
| ||Partner |
| ||Membership No. 116279 |
|Place : Mumbai ||UDIN: 20116279AAAAAV3270 |
|Date : 17th July 2020 || |