To the Members of BLB Limited
Report on the Audit of the Financial Statements
1. We have audited the financial statements of BLB Limited ("theCompany") which comprise the Balance Sheet as at 31st March 2020 the Statement ofProfit and Loss (including Other Comprehensive Income) Statement of Changes in Equity andthe Statement of Cash Flows for the year then ended and Notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as "the financial statements").
2. In our opinion and to the best of our information and according tothe explanations given to us the aforesaid financial statements give the informationrequired by the Companies Act 2013 in the manner so required and give a true and fairview in conformity with the Indian Accounting Standards prescribed under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 312020 the loss and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
3. We conducted our audit of the financial statements in accordancewith the Standards on Auditing specified under section 143(10) of the Companies Act 2013.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the financial statements under the provisions of the Companies Act 2013and the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the financial statements.
Key Audit Matters
4. Key audit matters are those matters that in our professionaljudgment were of most significance in our audit of the financial statements of thecurrent period. 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. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|S No. ||Key Audit Matter ||How our audit addressed the Key Audit Matter |
|i) ||Identification & Provision for Bad & Doubtful Debts. || To consider whether management's estimation methodology was appropriate our key audit procedures performed in report of this area included the following: |
| ||The company is required to regularly assess the recoverability of its trade receivables. The recoverability of trade receivables from 'The Calcutta Stock Exchange Association Ltd' was significant to our audit due to magnitude and pending litigation since financial year 2000-2001. || |
| || || In order to evaluate the reasonableness of the Company's estimations for the provision for bad and doubtful debts our key audit procedures included analysing the aging of accounts receivable examining the historical recovery records and the legal status of The Calcutta Stock Exchange Association Ltd as well as inspecting the amount received in the subsequent period. |
| ||We focused on this area since it required use of judgment due to related uncertainty. This involves judgement as the expected credit losses must reflect information about past events current conditions and forecasts of future conditions as well as the time value of money. As such this is considered to be a key audit risk. || |
| || || We inspected the legal records and the documents related to settlement reached by the Company to ascertain the likelihood of claims being successful and recoverable. |
|S No. ||Key Audit Matter ||How our audit addressed the Key Audit Matter |
| ||The disclosure is set out in the following notes: || We performed retrospective review of management judgements relating to accounting estimate included in the financial statement of prior year and compared with the outcome. |
| || Note 1.4 Use of Estimates and Judgement || |
| || Note 9 Status of Trade Receivable & || |
| || Note 33.1 Credit Risk || |
| ||Presently looking to ongoing uncertainties and financial burden the Company has entered into an agreement with 'The Calcutta Stock Exchange Association Ltd' to end litigations for and against the Company pending before Hon'ble Delhi High Court and Hon'ble Calcutta High Court subject to certain terms and conditions. || Based on our procedures we found management's assessment in respect of provision for bad & doubtful Debts to be fairly reasonable. We also found that the disclosures in the financial statements in respect of this matter to be adequate. |
|ii) ||Settlement of uncertain Tax Disputes and Litigations || We obtained details of completed tax assessments and demands upto the year ended March 312020 from the management. |
| ||The Company was subjected to material uncertain service tax dispute of the amalgamated erstwhile step-down subsidiary pending with Hon'ble Delhi High Court which involved significant financial impact on the Company. || We considered the tax dispute resolution scheme announced by the Govt followed by the company to settle the tax disputes and the payments made thereof putting end to penal actions. |
| ||The Company has availed the benefits of Sab ka Vishwas (Legal Dispute Resolution) Scheme 2019 and has deposited the disputed service tax liabilities putting an end to uncertainties and probable additional financial burden. We have designated this as a focus area of the audit. || From the evidences obtained we found the Company's settlement of the litigation and related disclosures to be adequate and acceptable.ments in respect of this matter to be adequate. |
Information Other than the Financial Statements and Auditor's ReportThereon
5. The Company's Board of Directors is responsible for the preparationof the other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report Corporate Governance and Shareholder's Information butdoes not include the financial statements and our auditor's report thereon.
Our opinion on the 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 financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated. 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 havenothing to report in this regard.
Management's Responsibility for the Financial Statements
6. The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these financial statements that give a true and fair view of thefinancial position financial performance changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theaccounting Standards 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 detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
7. In preparing the 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 unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
8. The Board of Directors is also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
9. Our objectives are to obtain reasonable assurance about whether thefinancial 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 Standards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
10. As part of an audit in accordance with Standards on Auditing weexercise professional judgment and maintain professional skepticism throughout the audit.We also:
Identify and assess the risks of material misstatement of thefinancial 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 control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Companies Act 2013 we are also responsible for expressing ouropinion on whether the company has adequate internal financial controls system in placeand the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the 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 auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
11. We communicated with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
12. We also provide those charged with governance with a statement thatwe have complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
13. From the matters communicated with those charged with governancewe determine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the
key audit matters. We describe these matters in our auditor's reportunless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
14. As required by Section 197(16) of the Act we report that theCompany has paid remuneration to its directors during the year in accordance with theprovisions of and limits laid down under Section 197 read with Schedule V to the Act.
15. As required by the Companies (Auditor's Report) Order 2016 (the'Order') issued by the Central Government of India in terms of Section 143(11) of the Actwe give in the "Annexure A" a statement on the matters specified in paragraphs3 and 4 of the Order.
16. Further to our comments in Annexure A as required by Section143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
(b) In our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss and the CashFlow Statement dealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with theAccounting 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 thedirectors as on 31st March 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2020 from being appointed as a director interms of Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".
(g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous: -
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements;
ii. The Company has made provision as required under the applicablelaw or accounting standards for material foreseeable losses if any on long-termcontracts including derivative contracts; and
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
'ANNEXURE - A' TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 16 under 'Report on Other Legal andRegulatory Requirements' section of our report to the Members of BLB Limited of even date)we report that:
(i) In respect of the Company's fixed assets
a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of property plant and equipment.
b) The property plant and equipment were physically verified by theManagement during the year in accordance with a regular programme of verification whichin our opinion provides for physical verification of all the property plant andequipment at reasonable intervals. According to the information and explanations given tous no material discrepancies were noticed on such verification.
c) According to the information and explanations given to us therecords examined by us and based on the examination of the conveyance deeds provided tous we report that the title deeds comprising all the immovable properties of land andbuildings which are freehold are held in the name of the Company as at the balance sheetdate except in respect of land and building of the gross block of '360.33 Lacs acquiredpursuant to a Scheme of Amalgamation from BLB Commodities Ltd one of the four subsidiariesare pending to be transferred in the name of the Company. In respect of immovableproperties of land and building that have been taken on long-term lease and disclosed asfixed assets in the financial statements the lease agreements are in the name of theCompany.
(ii) As explained to us the inventories of securities held asstock-in-trade have been verified by the management with demat accounts maintained withdepositories at reasonable intervals and that the Units of Mutual Funds held asStock-in-Trade in demat accounts with the custodians are verified from the statementsreceived from them on a regular basis. The company is maintaining proper records ofinventories and as explained to us no discrepancies were noticed on verification ofstocks and book records.
(iii) The Company has not granted any loans secured or unsecured tothe company or other parties covered in the register maintained under Section 189 of theCompanies Act 2013.
(iv) According to the information and explanations given to us thereare no loans investments guarantees and security which required the compliance ofSection 185 and Section 186 of the Companies Act 2013. Accordingly the item (iv) ofparagraph 3 of the Order is not applicable to the Company.
(v) According to the information and explanations given to us thecompany has not accepted any deposit from the public and therefore the provision of clause(v) of paragraph 3 of the Order is not applicable to the Company.
(vi) The Central Government has not prescribed the maintenance of costrecords under section 148(1) of the Companies Act 2013 for any of the activities renderedby the Company.
(vii) (a) According to the information and explanations given to us andon the basis of our examination of the records the company is regular in depositing withappropriate authorities undisputed statutory dues including Goods and Services TaxProvident Fund Employees' State Insurance Income-Tax Cess and any other statutory dues.According to the information and explanation given to us no undisputed amounts ofstatutory dues were in arrears as at 31.03.2020 for a period of more than six months fromthe date they became payable.
(b) According to the records and information and explanations given tous there are no dues of statutory dues referred to in sub-clause (a) that have not beendeposited with the appropriate authorities on account of disputes.
(viii) According to the information and explanations given to us theCompany has not defaulted in repayment of borrowing to financial institutions or banks.However the company did not take any loans or borrowings from government or debentureholders during the year.
(ix) According to the information and explanations given to us theCompany has not raised moneys by way of initial public offer or further public offer(including debt instruments) and term loans during the year as such clause (ix) ofparagraph 3 of the Order is not applicable.
(x) According to the information and explanations given to us no fraudby the Company or on the Company by its officers or employees has been noticed or reportedduring the course of our audit.
(xi) According to the information and explanations given to us theCompany has paid managerial remuneration by in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Companies Act 2013.
(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company. Accordingly the clause (xii) ofparagraph 3 of the Order is not applicable.
(xiii) According to the information and explanations given to us andbased on our examination of the records the Company's transactions with its relatedparties are in compliance with sections 177 and 188 of the Companies Act 2013 whereapplicable and the details of related party transactions have been disclosed in thefinancial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year.
(xv) In our opinion and according to the information and explanationsgiven to us the Company has not entered into non-cash transactions with its directors orpersons connected with him and therefore the clause (xv) of paragraph 3 of the Order isnot applicable.
(xvi) In our opinion and according to the information and explanationsprovided to us the Company is not required to be registered under section 45-IA of theReserve Bank of India Act 1934.
| ||For M/S. R K AHUJA & CO |
| ||Chartered Accountants |
| ||(FRN : 031632N) |
| ||(RAMESH KUMAR AHUJA) |
| ||Proprietor |
|Place : New Delhi. ||M. No. 090396 |
|Dated : 29th June 2020. || |
|UDIN: 20090396AAAAG1892 || |
'ANNEXURE - B' TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 17(f) under 'Report on Other Legal andRegulatory Requirements' section of our
report to the Members of BLB Limited of even date)
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the
Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of BLB Limited ("the Company") as of 31
March 2020 in conjunction with our audit of the financial statements ofthe Company for the year ended on that
1. Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India. 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.
2. Auditors' Responsibility
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. 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 was established and maintained and if suchcontrols operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe Company's internal financial controls system over financial reporting.
3. Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that
i) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
ii) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and
iii) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.
(a) Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us 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 March 31 2020 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.