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Balrampur Chini Mills Ltd.

BSE: 500038 Sector: Agri and agri inputs
NSE: BALRAMCHIN ISIN Code: INE119A01028
BSE 09:53 | 16 Dec 172.30 1.80
(1.06%)
OPEN

170.60

HIGH

172.30

LOW

168.50

NSE 09:39 | 16 Dec 169.45 -1.25
(-0.73%)
OPEN

171.30

HIGH

171.55

LOW

168.50

OPEN 170.60
PREVIOUS CLOSE 170.50
VOLUME 44837
52-Week high 173.75
52-Week low 98.00
P/E 6.21
Mkt Cap.(Rs cr) 3,791
Buy Price 172.30
Buy Qty 6.00
Sell Price 172.40
Sell Qty 442.00
OPEN 170.60
CLOSE 170.50
VOLUME 44837
52-Week high 173.75
52-Week low 98.00
P/E 6.21
Mkt Cap.(Rs cr) 3,791
Buy Price 172.30
Buy Qty 6.00
Sell Price 172.40
Sell Qty 442.00

Balrampur Chini Mills Ltd. (BALRAMCHIN) - Auditors Report

Company auditors report

To the Members of

Balrampur Chini Mills Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Balrampur ChiniMills Limited ("the Company") which comprise the balance sheet as at 31stMarch 2019 and the statement of Profit and Loss (including other Comprehensive Income)statement of changes in equity and statement of cash flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory notes for the year ended on that date (hereinafter referred to as"financial statements").

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 Companies Act 2013 (" the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at 31st March 2019 and profit 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 Act. Our responsibilities under those Standards are furtherdescribed in the Auditors’ Responsibilities for the Audit of the financial statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave considered the matters described below to be the key audit matters for incorporationin our report.

Sl. No. Key Audit Matters Addressing the Key Audit Matters
1. Valuation of Inventory of Sugar Our audit procedures based on which we arrived at the conclusion regarding reasonableness of the valuation of inventory include the following
As on 31st March 2019 the Company has inventory of sugar with the carrying value of H 209204.53 Lacs which forms major part of the total assets of the Company. The inventory of sugar is valued at the lower of cost and net realizable value. Evaluating the accounting policy followed for valuation of inventory of sugar and appropriateness thereof with respect to relevant accounting standards in this respect
Understanding and testing the design and operating effectiveness of controls as established by the management in determination of net realizable value of inventory of sugar.
Determination of net realizable value involves judgements and assumptions with respect to regulatory directives and notifications dealing with quantity and price of sugar to be sold and also the stock to be maintained by the Company. Obtaining an understanding of the determination of the net realizable value and assessing testing and evaluating the reasonableness keeping in view the significant judgements applied by the management for such valuation.
The above includes evaluation of the selling price prevailing around and subsequent to the year end and regulatory directives issued and compliances thereof by the management and rationale for assumptions in the given situation and business environment.
2. Recognition of Deferred tax assets Our audit procedures based on which we arrived at the conclusion regarding reasonableness of the recognition of deferred tax asset include the following
Deferred tax assets pertaining to MAT Credit entitlement amounting to H 10621.76 Lacs has been recognised during the year. Recognition of deferred tax asset is based on expected reversal and/or utilization thereof against management’s projection of future taxable income of the company. This involves estimation of future operations and profitability based on assumptions and anticipations which may be in variance with the actual happening. Evaluation of the temporary differences and reversal/ utilisation of deferred tax assets on the basis of internal forecasts by the management and resultant impact on future taxable income of the Company.
The above includes critical review of underlying assumptions for consistency and arriving at reasonable level of probability on the matters with due regard to the current and past results and performances as required in terms of Ind AS 12 Income Taxes and principles in this regard.
3. Government grants and assistances Our audit procedures based on which we arrived at the conclusion regarding reasonableness of recognition of various government grants include the following
During the year the Company has recognised subsidy claims amounting to H 25522.78 Lacs of which H18962.86 Lacs is outstanding as receivable as at 31st March 2019.
The various schemes have been notified by central and state government to assist sugar mills so that to protect the interest of the farmers in terms of the price and the release of payment against the sugarcane supplied by them. This has been considered to be a matter of significance considering the nature and type of industry in which the company is operating and related compliance requirements of the schemes and appropriateness of timing of recognition of the government grant and resultant income there against. Understanding and testing the design and operating effectiveness of controls as established by the management for recognition and assessment of recoverability of the claims for government grants.
Evaluating the management’s assessment for reasonable certainty of the claim considering the compliances with respect to eligibility requirements as embodied in the various schemes issued by the regulators.
Review of each notification for ascertaining the performance obligations concerning grant and arriving at timing of recognition and appropriateness for measurement thereof.

Information Other than the Financial Statements and Auditors’ Report thereon

The Company’s Board of Directors is responsible for the other information. Theother information comprises the information included in the Board’s Report includingAnnexures to Board’s Report Management Discussion and Analysis Report and BusinessResponsibility Report but does not include Consolidated financial statements and ourauditors’ report thereon.

Our opinion on the Consolidated financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Consolidated financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Consolidated financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact.

We have nothing to report with respect to the above.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

The Company’s Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the state of affairs (financial position) Profit orLoss (financial performance including other comprehensive income) changes in equity andcash flows of the Company in accordance with the accounting principles generally acceptedin India including the Indian Accounting Standards specified under section 133 of theAct.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany’s ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Those Board of Directors are also responsible for overseeing the Company’sfinancial reporting process.

Auditors’ 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 auditors’ report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud 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 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 controls;

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 theAct We are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors’ report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditors’ report. However future events or conditions may cause theCompany to cease to continue as a 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.

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

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 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 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

2. Further to our comments in the annexure referred to in the paragraph above asrequired 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 Cash Flow Statement dealt with by thisReport are in agreement with the books of account;

d) In our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

e) 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 terms of Section164 (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". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the internal control with referenceto financial statements of the Company.

3. 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 on its financialposition in its financial statements – Refer Note 37(1) to the financial statements;

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.

4. With respect to the reporting under section 197(16) of the Act to be included in theAuditors’ Report in our opinion and according to the information and explanationsgiven to us the remuneration (including sitting fees) paid by the Company to itsDirectors during the current year is in accordance with the provisions of section 197 ofthe Act and is not in excess of the limit laid down therein.

For Lodha & Co
Chartered Accountants
Firm’s ICAI Registration No.:301051E
sd/-
R. P. Singh
Place of Signature : Kolkata Partner
Date: 25th May 2019 Membership No: 052438

ANNEXURE "A" TO THE INDEPENDENT AUDITORS’ REPORT OF EVEN DATE:

i) a. The Company has maintained proper records showing full particulars includingquantitative details and situations of its fixed assets.

b. During the year fixed assets have been physically verified by the managementaccording to a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. As informed nomaterial discrepancies were noticed on such verifications.

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 asdisclosed in Note no 4 on Property plant and equipment to financial statements are heldin the name of the Company.

ii) As informed the inventories of the Company have been physically verified by themanagement during the year at reasonable intervals and no material discrepancies werenoticed on such physical verification.

iii) The Company has not granted any loans secured or unsecured to companies firms orparties covered in the register maintained under Section 189 of the Act. Accordinglyclause 3 (iii) of the Order is not applicable to the Company.

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 the loans and investments made.

v) The Company has not accepted any deposits from public covered under Sections 73 to76 or any other relevant provisions of the Act and rules framed thereunder.

vi) We have broadly reviewed the books of account maintained by the Company pursuant tothe Rules made by the Central Government for the maintenance of cost records under Section148 (1) of the Act in respect of the Company’s products to which the said rules aremade applicable and are of the opinion that prima facie the prescribed records have beenmaintained. We have however not made a detailed examination of the said records with aview to determine whether they are accurate or complete.

vii) a. According to the information and explanations given to us during the year theCompany has generally been regular in depositing with appropriate authorities undisputedstatutory dues including Provident Fund Investor Education Protection fundEmployees’ State Insurance Income Tax Custom Duty Cess Goods and Services Tax(GST) and other statutory dues as applicable to it. b. According to the information andexplanations given to us the details of disputed dues of income tax or sales tax orservice tax or duty of customs or duty of excise and value added tax if any as at 31stMarch 2019 are as follows:

Name of the Statute Nature of Dues Amount ( H in Lacs) Period to which the amount relates Forum where dispute is pending
The Central Sales Tax Act 1956 Central Sales Tax 1.08 2009-10 Dy. Commissioner (Appeal) - Balrampur

viii) In our opinion and on the basis of information and explanations given to us bythe management we are of the opinion that the Company has not defaulted in repayment ofdues to financial institutions banks or government. The Company has not issued anydebentures.

ix) In our opinion and according to the information and explanations given to us theCompany has not raised any money by way of initial public offer or further public offer(including debt instruments) during the year. On the basis of our examination andaccording to the information and explanations given to us money raised by way of termloans have been applied for the purpose for which the loans were obtained.

x) During the course of our examination of books of account carried out in accordancewith generally accepted auditing practices in India we have neither come across incidenceof any material fraud on or by the Company nor have we been informed of any such cases bythe management.

xi) According to the information and 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 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 given 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 as represented to usby the management and based on our examination of the records of the Company the Companyhas not entered into non-cash transactions with directors or persons connected with them.Accordingly paragraph 3(xv) of the Order is not applicable. xvi) The Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For Lodha & Co
Chartered Accountants
Firm’s ICAI Registration No.:301051E
sd/-
R. P. Singh
Place of Signature : Kolkata Partner
Date: 25th May 2019 Membership No: 052438

ANNEXURE "B" TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph (f ) under ‘Report on Other Legal and RegulatoryRequirements’ of our report of even date)

Report on the Internal Financial Controls with reference to Financial Statements underClause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls with reference to financial statementsof Balrampur Chini Mills Limited ("the Company") as of 31st March 2019in conjunction with our audit of the financial statements of the Company for the yearended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internalfinancial controls based on the internal control with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India. 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 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 Act.

Auditors’ 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 on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theAct to the extent applicable to an audit of internal financial controls. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to financial statements was 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 with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor’sjudgement including the assessment of the risks of material misstatement of the financialstatements 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 controlssystem with reference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company’s internal financial controls with reference to financial statements isa process 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 financialcontrols with reference to financial statements includes those policies and proceduresthat (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) 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 withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company’s assets that could have a material effect on thefinancial statements.

Inherent Limitations of Internal Financial Controls with reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

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 with reference to financial statements and such internal financial controls withreference to financial statements were operating effectively as at 31st March 2019 basedon the internal control with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For Lodha & Co
Chartered Accountants
Firm’s ICAI Registration No.:301051E
sd/-
R. P. Singh
Place of Signature : Kolkata Partner
Date: 25th May 2019 Membership No: 052438