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Bilcare Ltd.

BSE: 526853 Sector: Industrials
NSE: N.A. ISIN Code: INE986A01012
BSE 00:00 | 26 Nov 77.45 -2.85
(-3.55%)
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NSE 05:30 | 01 Jan Bilcare Ltd
OPEN 78.20
PREVIOUS CLOSE 80.30
VOLUME 44706
52-Week high 119.25
52-Week low 38.55
P/E
Mkt Cap.(Rs cr) 182
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 78.20
CLOSE 80.30
VOLUME 44706
52-Week high 119.25
52-Week low 38.55
P/E
Mkt Cap.(Rs cr) 182
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Bilcare Ltd. (BILCARE) - Auditors Report

Company auditors report

IND AS FINANCIAL STATEMENTS

TO THE MEMBERS OF BILCARE LIMITED

Report on the Standalone Indian Accounting Standards (Ind AS) Financial Statements

Opinion

We have audited the accompanying standalone financial statements of Bilcare Limited("the Company") which comprise the Balance Sheet as at March 31 2020 and theStatement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year then ended and a summary ofthe significant 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 standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theIndian Accounting Standards prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended (Ind AS) and theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2020 and its loss total comprehensive income its cash flows and thechanges in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI)together with the ethical requirements that are relevant to our audit of the standalonefinancial statements under the provisions of the Act and Rules made thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand ICAI's Code of Ethics. We believe that the audit evidence obtained by is sufficientand appropriate to provide a basis for our audit opinion on the standalone financialstatements.

Emphasis of Matter

We draw attention to Note 39 of the standalone financial statements which state theimpact of Covid-19 on the operations of the Company.

We draw your attention to Note 24 read with Note 5 (i) and (ii) of the standalonefinancial statements which includes impairment and net fair value changes of theinvestment in Bilcare Mauritius Ltd (BML) and gain on one time settlement with banks &creditors.

The Company has not provided interest on term loans from banks classified asNon-Performing Assets and the same has not been quantified. Refer Annexure A (b) to thestandalone financial statements.

Our opinion is not modified in respect of the above matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

 

S No Key Audit Matters Auditor's Response
1 Impairment of Investment in Subsidiary relating to divestment of the step down subsidiaries - refer note 5 (a) (ii) of the standalone financial statements Our audit procedures included:
As part of the global strategy of the Group the Company decided to divest its stake in the step down subsidiaries – Swiss Cos Group which was affected on 8th November 2019. As part of the same divestment transaction Caprihans India Limited which was a step down subsidiary of the Swiss Cos Group was acquired by Bilcare Mauritius Ltd (BML) a wholly owned subsidiary of the Company. • We have assessed whether the methodology established by the Management to identify indications of the impairment of the investment and the quantification thereof was appropriate
• We have assessed that the impairment was in line with the accounting treatment for valuation and impairment of Cinvestments as specified in Ind AS 36.
• W e have evaluated the design and implementation of control relating to the Management's estimation of the recoverable amount of the investment
The investment of the Company including fair valuation in BML insomuch was impaired to the extent of INR 23806.94 lacs. • W e have evaluated the Management's valuation method used and the accuracy of the inputs used
Given the complexity and judgment involved in the fair value measurements and magnitude of the divestment made by the Company this is a key audit matter. • We have critically evaluated the key assumptions for the divestment and the identification and valuation of the Discontinued business assets by relying on the valuation specialists and based on our knowledge of the Company and the industry.
• We have assessed the adequacy of the Company's Disclosures in respect of the impairment in accordance with the Ind AS 36.
2 Existence and condition of inventory of raw material work in progress and finished goods - refer note 9 of the standalone financial statements We have performed the following principal audit procedures in relation to validating the existence and condition of inventories which include a combination of testing internal controls and substantive testing as under:
As at March 31 2020 the Company carried inventories aggregating INR 2221.94 lacs comprising 2.3% of the total assets of the Company as on that date which inventories are in one location of the factory premises. • Understood Management's control over physical inventory counts.
These inventories are physically verified by the Management in accordance with a physical verification plan. • Evaluation of the design and testing the operating effectiveness of the internal controls relating to physical inventory counts.
Owing to the COVID-19 related lock-down we were unable to participate in the year-end physical verification of inventories carried out by the Management at the year-end. • Evaluation of the design and testing the operating effectiveness of the internal controls relating to purchases sales and inventories including automated controls.
For the aforementioned reason and also since the inventory balance is material the existence and condition thereof has been considered as a key audit matter. • Performed alternate procedures including inspection of documentation of the subsequent sale of inventories to audit the existence and condition of inventory as per guidance provided in SA 501 "Audit Evidence – Specific
Considerations for Selected Items" and have obtained sufficient appropriate audit evidence. We have also performed roll-forward procedures for establishing the existence of inventory as at year-end by validating purchases sales stock movement of inventory during the intervening period i.e. from the date physical verification was done till the year end date.
• Verification of documentary evidences of damaged and expired stock and the adequacy of recorded allowance in respect of these.
Our audit procedures included:
3 Provisions and contingent liabilities relating to taxation litigations and claims - refer note 36 of the standalone financial statements • Testing the design implementation and operating effectiveness of key internal controls around the recognition and measurement of provisions and re- assessment of development of contingent liabilities.
The provisions and contingent liabilities relate to ongoing litigations and claims with various authorities and third parties. • Using our subject matter experts to assess the value of significant provisions and contingent liabilities on sample basis in light of the nature of the exposures applicable regulations and related correspondence with the authorities.
These relate to direct tax indirect tax transfer pricing arrangements claims general legal proceedings environmental issues and other eventualities arising in the regular course of business.
As at the year ended 31 March 2020 the amounts involved are significant. The computation of a provision or contingent liability requires significant judgment by the Company because of the inherent complexity in estimating future costs. The amount recognized as a provision is the best estimate of the expenditure. • Inquiring the status in respect of significant provisions and contingent liabilities with the Company's internal tax and legal team. We assessed the assumptions and critical judgments made by the Company which impacted the computation of the provisions and inspected the computation and estimates of outcome and financial effect. We considered the judgment of the Company supplemented by experience of similar decisions previously made by the authorities and in some cases relevant opinions given by the Company's advisors.
The provisions and contingent liabilities are subject to changes in the outcomes of litigations and claims and the positions taken by the Company. It involves significant judgment and estimation to determine the likelihood and timing of the cash outflows and interpretations of the legal aspects tax legislations and judgments previously made by authorities.
• Evaluating judgments made by the Company by comparing the estimates of prior year to the actual outcome.
• Assessing the Company's disclosures in the financial statements in respect of provisions and contingent liabilities.

Other Information

The other information comprises the information included in the Annual report but doesnot include the standalone Ind AS financial statements and our auditor's report thereon.The Company's Board of Directors is responsible for the other information. Our opinion onthe standalone Ind AS 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 standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether suchother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information; we are required to report that fact.

We have nothing to report in this regard.

Management's Responsibility for the Standalone Ind AS 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 preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with the Indian Accounting Standards (IndAS) and other accounting principles generally accepted in India.

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 standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements Management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Management either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

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

Auditor's Responsibility

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are 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 the 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

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 also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's 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 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.

e) On the basis of the written representations received from directors as on March 312020 taken on records by Board of Directors except Mr. Rajesh Shankarrao Devene and MrsAlka Sagar all other directors of the Company are disqualified u/s 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) With respect to the other matters to be included in the Auditor's report inaccordance with the requirements of section 197 (16) of the Act as amended

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its Directors during the year is inaccordance with the provisions of section 197 of the Act. We further report that noremuneration has been paid during the year to the Managing Director of the Company.

h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements — Refer Note 36 to the financial statements;

ii. As informed to us the Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For K.R. Miniyar & Associates
Chartered Accountants
Firm Registration No. 124806W
Date: June 26 2020 K.R. Miniyar
Place: Aurangabad Proprietor
(Membership No.108015)
UDIN: 20108015AAAAAT2311

'ANNEXURE A' TO THE INDEPENDENT AUDITORS' REPORT 31 MARCH 2020 ON THE STANDALONE IND ASFINANCIAL STATEMENTS

(Referred to in paragraph 5 (ii) (f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act") To the Members of Bilcare Limited

We have audited the internal financial controls over financial reporting of BilcareLimited ("the Company") as of March 31 2020 in conjunction with our audit ofthe standalone Ind AS 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 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

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 as specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth applicable to an audit of Internal Financial Controls and issued by the Institute ofChartered Accountants of India. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wereestablished and maintained and if such controls operated effectively in all materialrespects.

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 authorizations ofmanagement and directors of the Company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

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 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 March 31 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 K.R. Miniyar & Associates
Chartered Accountants
Firm Registration No. 124806W
Date: June 26 2020 K.R. Miniyar
Place: Aurangabad Proprietor
(Membership No.108015)
UDIN: 20108015AAAAAT2311

'ANNEXURE B' TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report to the Members of Bilcare Limited of even date)

i. In respect of the Company's fixed assets:

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

b. The property plant and equipment were physically verified by the Management inaccordance with a regular programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable periods. 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 by the Management thetitle deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date. In respect ofimmovable properties of land and building that have been taken on lease and disclosed asfixed assets in the standalone financial statements the lease agreements are in the nameof the Company.

ii. As explained to us the inventory has been physically verified in a phased mannerat reasonable intervals during the year by the Management and no material discrepancieswere noticed on such physical verification.

iii. The Company has not granted any loans secured or unsecured to companies firms orother parties covered in the register maintained under section 189 of the Companies Act.Accordingly the sub-clauses 3(iii)(a)(b) and (c) are not applicable.

iv. The Company has not granted any loans made any investments provided guarantees orsecurity and hence reporting under clause (iv) of CARO 2016 is not applicable.

v. According to the information and explanations given to us the Company has notcomplied with the provisions of sections 73 to 76 of the Companies Act 2013 and theCompanies (Acceptance of Deposits) Rules 2014 (as amended). The total depositsoutstanding are ' 12661.10 lacs. However as informed to us the Company has made anapplication to NCLT and no order has been received till date and the matter issub-judicious as on March 31 2020.

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 and are of the opinion that prima facie the specified accounts andrecords have been made and maintained. We have not however made a detailed examinationof the same with a view to determine whether they are accurate and complete.

vii. a. The company is generally regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance

Income Tax Duty of Customs Cess Goods and Service Tax and other statutory dues withthe appropriate authorities. Further Company has not deducted Tax Deduction at Source oncapital advance of ' 10620.67 lacs as on March 312020 for purchase of land as requiredunder section 194-IA of Income Tax Act 1961.

According to the information and explanations given to us the undisputed amountspayable in respect of the aforesaid dues were outstanding as at March 312020 for a periodmore than six months from the date of becoming payable are Tax Deducted at Source of '94.61 lacs.

b. Details of Income tax Sales tax Service tax Customs Duty Goods and Service Taxand Cess which have not been deposited as on March 31 2020 on account of disputes aregiven below:

(Rs.. in lacs)
Name of Statute Nature of Dues Forum where Dispute is pending Period to which the amount relates (Assessment Year) Gross Amount Amount paid under protest Amount Unpaid
Income Tax Act 1961 Income Tax (TP) Income Tax Appellate Tribunal A.Y 2013-14 747.47 150.32 597.15
Total of Income Tax Act 1961 (A) 747.47 150.32 597.15
Finance Act 1994 Service tax - Penalty CESTAT Mumbai November 2012 to May 2015 33.91 33.91
(Service Tax) Service tax - Penalty CESTAT Mumbai June 2015 to December 2016 31.22 31.22
Total of Finance Act 1994 (Service Tax) (B) 65.13 *65.13
Total C =(A+B) 812.6 215.45 597.15

*Amount reversed through GSTR -3B of May 2018

viii. As per the information and explanations given to us the Company has defaulted inrepayment of loans or borrowing to a financial institution banks government amounting to' 12403.68 lacs.

ix. The Company has not raised money by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under Clause (ix) ofCARO 2016 is not applicable.

x. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company and no material fraud in the Company by the officers andemployees of the Company have been noticed or reported during the year.

xi. According to information and explanation given to us the Company has not paid orprovided any managerial remuneration.

xii. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company.

xiii. According to the information and explanations given by the Managementtransactions with related parties are in compliance with section 177 and 188 of CompaniesAct 2013 where applicable and the details have been disclosed in the notes to theStandalone financial statements as required by the applicable accounting standards.

xiv. According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year andhence reporting requirements under clause 3(xiv) are not applicable to the Company.

xv. According to the information and explanations given by the Management the Companyhas not entered into any non-cash transactions specified under section 192 of the Act withdirectors or persons connected with him.

xvi. In our opinion the provisions of section 45-IA of the Reserve Bank of India Act1934 are not applicable to the Company.

For K.R.Miniyar & Associates
Chartered Accountants
Firm Registration No. 124806W
Date: June 26 2020 K.R. Miniyar
Place: Aurangabad Proprietor
(Membership No.108015)
UDIN: 20108015AAAAAT2311

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