Mar 31, 2018
Report on the Standalone Financial Statements
We have audited the accompanying standalone Ind AS financial statements of BAL PHARMA LIMITED (âthe Company''), which comprise the Balance Sheet as at 31 March 2018, the Statement of Profit and Loss (including other comprehensive income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended and a summary of significant accounting policies and other explanatory information.
Managementâs responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Act'') with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the company in accordance with the Indian Accounting Standards prescribed under Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgements and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditorâs responsibility
Our responsibility is to express an opinion on these standalone Ind AS financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under and the Order issued under Section 143(11) of the Act. We conducted our audit of the financial statements in accordance with the Standards on Auditing, issued by Institute of Chartered Accountants of India specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether thefinancial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements.
The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''s Directors, as well as evaluating the overall presentation of the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on these standalone Ind AS financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2018, its profit including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Other Matter
The comparative financial information for the year ended 31st March, 2017 and the transition date opening balance sheet as at 1st April, 2016 prepared in accordance with Ind AS included in these standalone financial statements, are based on the previously issued statutory financial statements for the year ended 31st March, 2017 and 31st March, 2016 respectively prepared in accordance with Accounting Standards prescribed under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014 (as amended) which were audited by the predecessor auditor whose reports dated 30th May, 2017 and 25th May, 2016 respectively expressed unmodified opinion on those standalone financial statements, and have been adjusted for the differences in the accounting principles adopted by the Company on transition to Ind AS, which have been audited by us. Our opinion is not modified in respect of this matter.
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 best of 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 the Company so far as it appears from our examination of those books;
(c) the Balance Sheet, the Statement of Profit and Loss including the Statement of Other Comprehensive Income, the Statement of Changes in Equity and the Statement of Cash Flows dealt with by this Report are in agreement with the books of account.
(d) in our opinion, the aforesaid financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014;
(e) on the basis of the written representations received from the directors as on 31 March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2018 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) with respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in Annexure A, and
(g) with respect to the other matters to be included in the Auditors'' Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and 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 financial position in its financial statements - Refer 31 to the standalone Ind AS financial statements.
ii) The Company did not have any long-term contracts including derivative contracts for which there were any foreseeable losses; and
iii) There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company.
2. As required by the Companies (Auditor''s Report) Order, 2016 (âthe Order''), issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act, we give in the Annexure B, a statement on the matters specified in paragraphs 3 and 4 of the Order.
Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Bal Pharma Limited (âthe Companyâ) as of 31 March 2018 in conjunction with our audit of the financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Company''s Board of Directors is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the âGuidance Note'') issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditorâs Responsibility
Our responsibility is to express an opinion on the internal financial controls over financial reporting of the company based on our audit. We conducted our audit in accordance with the Guidance Note on audit of internal financial controls and the Standards on Auditing, issued by Institute of Chartered Accountants of India and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that: (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''s assets that could have a material effect on the financial statements.
Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, to the best of information and according to the explanations given to us, the Company has in all material aspects, an adequate internal financial control system over financial reporting as at March 31, 2018, based on the internal control over financial reporting criteria established by the company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India.
Annexure B to the Independent Auditorâs Report
The Annexure B referred to in the Independent Auditor''s Report to the Members of Bal Pharma Limited (âThe Companyâ) for the year ended 31 March 2018, Based on the audit procedures performed for the purpose of reporting a true and fair view on the standalone financial statements of the Company and taking into consideration the information and explanations given to us and the books of account and other records examined by us in the normal course of audit, and to the best of our knowledge and belief, we report that,
(i) a. The Company has maintained proper records showing full particulars, including quantitative details and Situation of Fixed assets.
b. The Company has a regular programme of physical verification of its fixed assets by which fixed assets are verified in a phased manner over a period of three years which, In our opinion, is reasonable having regard to the size of the Company and the nature of its fixed assets. No material discrepancies were noticed on such verification.
c. The title deeds of immovable properties (which are included under the head âProperty, Plant and Equipment'') are held in the name of the Company.
(ii) As explained to us, the inventories have been physically verified by the Management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on such physical verification between physical stock and book records were not material and have been adequately dealt with in the books of account.
(iii) The Company has not granted loans, secured or unsecured to Companies, firms or other parties covered in the register maintained under section 189 of the Companies Act.
(iv) In respect of loans, investments and guarantees, the provisions of Section 185 and 186 of the Companies Act, 2013 have been complied with.
(v) The Company has not accepted any deposits to which the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under and the directions issued by the RBI are applicable. Hence paragraph 3(v) of CARO is not applicable to the Company.
(vi) We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, as amended, specified by the Central Government under Section 148(1) of the Companies Act and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
(vii) The Company has generally been regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it.
a. According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, service tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31 March 2018 for a period of more than six months from the date they became payable
b. On the basis of our examination of the documents and records of the Company, there are no dues of Income Tax, Sales Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of an any dispute, except as enumerated herein below which are pending before respective authorities as mentioned there against:
Name of the statute |
Nature of dues |
Rs. |
Period to which the amount relates |
Forum where dispute is pending |
Chapter V of Finance Act, 1994 |
Service Tax and equivalent penalty |
31,70,397 |
Nov 2007 to March 2012 |
Commissioner of Central Excise |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
2,88,356 |
January to October 2010 |
Commissioner of Central Excise |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
24,91,506 |
April to Oct 2006, January 2007 to December 2009 |
Assistant Commissioner of Central Excise |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
85,01,823 |
Nov 2007 to July 2011 |
CESTAT |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
1,91,590 |
March -June 2012 |
Assistant Commissioner of Central Excise |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
11,59,254 |
July 2012 to January 2013 |
Assistant Commissioner of Central Excise |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
21,82,891 |
FY 2010-11,2011-12 & 2012-13 |
Assistant Commissioner of Central Excise |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
2,67,151 |
FY2013-14 |
Assistant Commissioner of Central Excise |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
3,06,151 |
FY 2013-14 & 2014-15 |
Assistant Commissioner of Central Excise |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
2,73,898 |
FY 2014-15 |
Assistant Commissioner of Central Excise |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
1,53,283 |
FY 2013-14 & 2014-15 |
Assistant Commissioner of Central Excise |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
1,17,741 |
FY 2013-14 & 2014-15 |
Assistant Commissioner of Central Excise |
The Central Excise Act, 1944 |
Penalty Imposed |
1,87,609 |
FY 2016-17 |
Commissioner Appeals-I |
The Central Excise Act, 1944 |
Penalty Imposed |
1,52,527 |
FY2013-14 to 2015-16 |
Commissioner Appeals-I |
The Central Excise Act, 1944 |
Central Excise duty |
9,85,543 |
FY 2016-17 & FY 2017-18 |
Assistant Commissioner of Central Excise |
Income tax Act, 1961 |
Income Tax |
9,63,682 |
FY 2005-06 |
Honourable High court of Karnataka |
(viii) In our opinion and according to the information and explanations given to us, the Company has not defaulted in repayment of dues to its any banks and financial institutions.
(ix) According to the information and explanations given to us, the term loans were applied for the purposes for which those are raised. The Company has not raised any money by way of public issue or further public offer (including debt instruments) during the year.
(x) According to the information and explanations given to us, no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.
(xi) According to the information & explanations given to us and based on our examination of the records of the Company, the Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197, read with schedule V to the act.
(xii) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, clause 3(xii) of the Order is not applicable.
(xiii) All transactions with the related parties are in compliance with Section 188 and 177 (where applicable) of Companies Act, 2013 and the details thereof have been disclosed in the standalone financial statements as required by the Accounting standards and Companies Act, 2013.
(xiv) According to the information and explanations give to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.
For N S V M & Associates
Chartered Accountants
Firm registration number: 010072S
G.C.S Mani
Partner
Membership No: 036508
Bengaluru
29th May, 2018
Mar 31, 2016
TO THE MEMBERS OF BAL PHARMA LIMITED Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of BAL PHARMA LIMITED, ("the company"), which comprise the balance sheet as at 31 March 2016, the statement of profit and loss, the cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.
Management''s responsibility for the Standalone Financial Statements
The Company''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
Auditor''s responsibility
Our responsibility is to express an opinion on these standalone financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the company''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company''s management and Board of Directors, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.
Opinion
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March 2016, its profits and its cash flows for the year ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the ''Annexure-A'' statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2. As required by section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the best of 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 the company so far as it appears from our examination of those books and proper returns adequate for the purposes of our audit have been received from the branches not visited by us.
(c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account and with the returns received from branches not visited by us.
(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
(e) On the basis of the written representations received from the directors as on 31 March 2016 taken on record by Board of Directors, none of the directors is disqualified as on 31 March 2016 from being appointed as a director in terms of section 164(2) of the Act.
(f) With respect to the adequacy of the internal financial controls over financial reporting of the company and the operating effectiveness of such controls, refer to our separate report in ''Annexure-B''.
(g) With respect to the other matters to be included in the Auditor''s report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us;
i). The Company has disclosed the impact, if any, of pending litigations as at 31 March 2016, on its financial position in its financial statements - Refer Note 37 to the financial statements.
ii). The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
iii). There has been no delay in transferring amounts, required to be transferred to the Investor Education and Protection Fund by the company.
Annexure-A to the Independent Auditor''s Report
(The annexure referred to in paragraph 1 under the heading "Report on other legal and regulatory requirements" of our report of even date to the members of Bal Pharma Limited for the year ended 31 March 2016)
i. In respect of its fixed assets
(a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.
(b) As informed to us by the management, the Company has a policy of physically verifying fixed assets in a phased manner over a period which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. We are informed that there were no material discrepancies noticed on such verification.
(c) The title deeds of all the immovable properties are held in the name of the company.
ii. As explained to us, the inventories have been physically verified by the Management at reasonable intervals during the year. In our opinion, the frequency of such verification is reasonable. The discrepancies noticed on such physical verification between physical stock and book records were not material and have been adequately dealt with in the books of account.
iii. The Company has granted unsecured loans to companies and Limited Liability Partnerships covered in the register maintained under Section 189 of the Companies Act, 2013 (''the Act'').
(a) We are unable to comment as to whether the terms and conditions of the loans granted to the companies and Limited Liability Partnerships covered in the register maintained under Section 189 of the Act, are not prejudicial to the company''s interest as there has been no stipulation with respect to the same.
(b) We are unable to comment on the repayment of loans granted to companies and Limited Liability Partnerships covered in the register maintained under Section 189 of the Act, as there has been no stipulation with respect to the repayment of such loans or the payment of interest.
(c) We are also unable to ascertain the overdue amount as there has been no stipulation with respect to the repayment of such loans or the payment of interest.
iv. In respect of loans, investments and guarantees, the provisions of Section 185 and 186 of the Companies Act, 2013 have been complied with.
v. The Company has not accepted any deposit to which the provisions of Section 73 to 76 or any other relevant provisions of the Companies Act and the rules framed there under and the directions issued by the RBI are applicable. Hence paragraph 3 (v) of CARO is not applicable to the company.
vi. We have broadly reviewed the cost records maintained by the Company pursuant to the Companies (Cost Accounting Records) Rules, as amended, specified by the Central Government under 148(1) of the Companies Act and are of the opinion that prima facie the prescribed cost records have been maintained. We have, however, not made a detailed examination of the cost records with a view to determine whether they are accurate or complete.
vii. According to the information and explanations given to us:
(a) The Company has generally been regular in depositing with appropriate authorities undisputed statutory dues, including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty, Cess and other material statutory dues applicable to it.
According to the information and explanations given to us, no undisputed amounts payable in respect of income tax, wealth tax, service tax, sales tax, customs duty, excise duty and cess were in arrears, as at 31 March 2016 for a period of more than six months from the date they became payable.
viii. Based on our audit procedures, information and explanations given by the management, we are of the opinion that the Company has not defaulted in repayment of dues to financial institutions and banks.
(b) On the basis of our examination of the documents and records of the Company, there are no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise Duty and Cess which have not been deposited on account of an any dispute, except as enumerated herein below which are pending before respective authorities as mentioned there against:
Name of Statue |
Nature of dues |
Forum where dispute is pending |
Period(s) to which the amount relates |
Amount involved* () |
Chapter V of Finance Act, 1994 |
Service Tax and equivalent penalty |
Commissioner of Central Excise |
Nov 2007 to March 2012 |
85,88,511 |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
Commissioner of Central Excise |
January to October 2010 |
2,88,356 |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
CESTAT |
Jan to Oct 2010 |
24,34,816 |
The Central Excise Act, 1944 |
Central Excise Penalty |
CESTAT |
Nov 2007 to July 2011 |
85,01,823 |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
CESTAT |
July 2011 to December 2011 |
1,79,119 |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
CESTAT |
Jan to Feb 2012 |
3,28,671 |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
CESTAT |
March 2012 to Jan 2013 |
13,50,844 |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
Assistant Commissioner of Central Excise |
Dec-08 |
1,79,184 |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
Additional Commissioner of Central Excise |
FY 2010-11, 2011-12 & 2012-13 |
21,82,891 |
The Central Excise Act, 1944 |
Central Excise Duty and Penalty |
Assistant Commissioner of Central Excise |
FY 2013-14 & 2014-15 |
7,42,297 |
Income Tax Act, 1961 |
Income tax |
Honorable High court of Karnataka |
FY 2005-06 |
9,63,682 |
*Net of amounts paid under protest or otherwise. Amount as per demand order including interest wherever quantified.
ix. In our opinion and according to the information and explanations given to us, the term loans taken by the company during the year have been applied for the purposes for which they were obtained. Further, the company has not raised any money by way of public issue/ follow on offer.
x. Based on the audit procedures performed and information and explanations given by the management, we report that no fraud by the company and no fraud on the company by its officers/ employees has been noticed or reported during the course of our audit.
xi. The Managerial Remuneration has been paid in accordance with the requisite approvals mandated by section 197 read with Schedule V of the Companies Act.
xii. The company is not a Nidhi Company and therefore clause 3(xii) of the Order is not applicable to the company.
xiii. All transactions with the related parties are in compliance with Section 188 and 177 (where applicable) of Companies Act, 2013 and the details thereof have been disclosed in the standalone financial statements as required by the Accounting Standards and Companies Act, 2013.
xiv. The Company has not made any preferential allotment/ private placements of shares during the year and therefore clause 3(xiv) of the Order is not applicable to the Company.
xv. The Company has not entered into any non-cash transactions with directors or persons connected with him and therefore clause 3(xv) of the Order is not applicable.
xvi. The company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
''Annexure - B'' to the Independent Auditors'' Report of Even Date on the Standalone Financial Statements of Bal Pharma Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of BAL PHARMA LIMITED ("the Company") as of 31 March 2016 in conjunction with our audit of the standalone 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 internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India (''ICAI''). These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company''s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors'' Responsibility
Our responsibility is to express an opinion on the Company''s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company''s internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company''s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company''s internal financial control over financial reporting includes those policies and procedures that:
a) Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
b) Provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
c) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company''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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31 March 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
For M/s T D JAIN AND D I SAKARIA
Chartered Accountants
Firm registration no: 002491S
T D JAIN
Partner
M. No.: 012034
Bengaluru 25 May 2016
Mar 31, 2015
We have audited the accompanying standalone financial statements of M/s
BAL PHARMA LIMITED, which comprise the balance sheet as at 31 March
2015, the statement of profit and loss and cash flow statement for the
year then ended, and a summary of significant accounting policies and
other explanatory information.
Management's responsibility for the standalone financial statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation and presentation of these standalone financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the Company in accordance with
the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility
also includes maintenance of adequate accounting records in accordance
with the provisions of the Act for safeguarding the assets of the
Company and for preventing and detecting frauds and other
irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; design, implementation and maintenance of adequate internal
financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditor's responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit.
We have taken into account the provisions of the Act, the accounting
and auditing standards and matters which are required to be included in
the audit report under the provisions of the Act and the Rules made
there under. We conducted our audit in accordance with the Standards on
Auditing specified under Section 143(10) of the Act. Those Standards
require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the company's
preparation of the financial statements that give a true and fair view
in order to design audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial
controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of Company's management and Board of Directors, as well
as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Act in the manner so required and
give a true and fair view in conformity with the accounting principles
generally accepted in India of the state of affairs of the Company as
at 31 March 2015, its profits and its cash flows for the year ended on
that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section II of section 143 of the Act, we give in theAnnexure a
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2. As required by section 143(3) of the Act, we further report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose of our audit;
(b) In our opinion proper books of account as required by law have been
kept by the company so far as appears from our examination of those
books and proper returns adequate for the purposes of our audit have
been received from the branches not visited by us;
(c) The balance sheet, statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account and with the returns received from branches not visited by us;
(d) In our opinion, the aforesaid standalone financial statement comply
with the Accounting Standards specified under Section 133 of the Act,
read with Rule 7 of the Companies(Accounts) Rules,2014.
(e) On the basis of the written representations received from the
directors, as on 31 March 2015 and taken on record by Board of
Directors, none of the directors is disqualified as on 31 March 2015
from being appointed as a director in terms of section 164(2) of the
Act.
(f) In our opinion and to the best of our information and according to
the explanations given to us, we report as under with respect to other
matters to be included in the Auditor's Report in accordance with Rule
11 of the Companies (Audit and Auditors) Rules,2014;
i. The Company has disclosed the impact, if any, of pending litigations
as at 31 March 20l5,on its financial position in its financial
statements - Refer Note 36 to the financial statements;
ii. The Company has not entered into any long-term contracts including
derivative contracts requiring provision under the applicable law or
accounting standards, for material foreseeable losses;
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company.
Annexure to the Independent Auditor's Report
(The annexure referred to in paragraph I under the heading "Report on
other legal and regulatory requirements" of our report of even date
to the members of Bal Pharma Limited for the year ended 31 March 2015)
i. In respect of its fixed assets
(a) The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets.
(b) As informed to us by the management the Company has a policy of
physically verifying fixed assets in a phased manner over a period
which, in our opinion, is reasonable having regard to the size of the
Company and the nature of its assets. We are informed that there was
no material discrepancies noticed on such verification.
ii. In respect of its inventories
(a) As explained to us, the inventories were physically verified by the
Management at reasonable intervals during the year. In our opinion the
frequency of verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventories
followed by the Management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us, the Company has maintained proper records of its
inventories and the discrepancies noticed on such physical verification
between physical stock and book records were not material and have been
adequately dealt with in the books of account.
iii. (a) The company has granted loans to two bodies corporate covered
in the register maintained under section 189 of the Companies Act, 2013
('the act').
(b) In the case of the loans granted to the bodies corporate listed in
the register maintained under section 189 of the Act, the borrowers
have been regular in the payment of the interest as stipulated. The
terms of arrangements do not stipulate any repayment schedule and the
loans are repayable on demand. Accordingly, paragraph 3(iii) (b) of
the order is not applicable to the company in respect of repayment of
the principle amount.
(c) There are no overdue amounts of more than rupees one lakh in
respect of the loans granted to the bodies corporate listed in the
register maintained under section 189 of the Act.
iv. In our opinion and according to the information and explanations
given to us, there exist an adequate internal control system
commensurate with the size of the Company and nature of its business
with regard to purchases of inventory, fixed assets and for the sale of
goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
control system.
v. The Company has not accepted any deposit from public. No order has
been passed by Company Law Board or National Company Law Tribunal or
Reserve Bank of India or any Court or any other Tribunal.
vi. We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules prescribed by the Central Government for
maintenance of cost records under 148(1) of the Companies Act, 2013 in
relation to products manufactured, and are of the opinion that, prima
facie, the prescribed accounts and records have been made and
maintained. We have not made a detailed examination of the records with
a view to determine whether they are accurate and complete.
vii. According to the information and explanation given to us:
(a) The company has been regular in depositing undisputed statutory
dues including provident fund, employees' state insurance, income-tax,
sales-tax, wealth tax, service tax, duty of customs, duty of excise,
value added tax, cess and any other statutory dues applicable to it
have generally been regularly deposited with the appropriate
authorities. There are no undisputed amounts payable in respect of
aforesaid material statutory dues as at 31 March 2015, which were in
arrears for a period of more than six months from the date they became
payable.
(b) On the basis of our examination of the documents and records of the
company, there are no amounts in respect of Provident Fund, Income Tax,
Sales Tax, Wealth Tax, Service Tax, Customs Duty, Excise duty and Cess
that have not been deposited with appropriate authorities on account of
any dispute except as enumerated herein below which are pending before
respective authorities as mentioned there against:
Name of the Statute Nature of dues "Amount in
Chapter V of Finance Act, 1994 Service Tax and equivalent 1,08,36,228
penalty
The Central Excise Act, 1944 Central Excise Duty and
Penalty 1,69,03,646
The Central Excise Act,l944 Central Excise Penalty 24,91,506
The Central Excise Act, 1944 Central Excise Duty and
Penalty 8,38,598
The Central Excise Act, 1944 Central Excise Duty and
Penalty 12,09,387
The Central Excise Act,l944 Central Excise Duty and
Penalty 2,16,694
The Central Excise Act, 1944 Central Excise Duty and
Penalty 3,16,719
The Central Excise Act, 1944 Central Excise Duty and
Penalty 2,24,679
The Maharashtra Value Added Central Sales Tax and
tax 2002 Penalty 7,78,314
The Kerala General Sales Tax Local Sales Tax 4,95,991
act 1963
The Central Excise Act, 1944 Central Excise Duty and
Penalty 21,82,891
lncome Tax Act,l96l Income tax 89,50,439
Name of the Statute Period to which Forum where dispute
amount relates is pending
Chapter V of Finance Act 1994 Nov 2007 to July 2011 Commissioner of
Central Excise
( Appeals),
Bangalore
The Central Excise Act, 1944 Nov 2007 to July 2011 Commissioner of
Central Excise
( Appeals),
Bangalore
The Central Excise Act, 1944 Apr 2005 to Nov 2009 Customs Excise
Service Tax
Appellate Tribunal,
Bangalore
The Central Excise Act, 1944 May 2000 to Nov 2001 Customs Excise
Service Tax
Appellate Tribunal,
Mumbai
The Central Excise Act, 1944 Jul 2012 to Jan 2013 Commissioner of
Central Excise
(Appeal), Bangalore
The Central Excise Act, 1944 Mar-12 Commissioner of
Central Excise
(Appeal), Bangalore
The Central Excise Act, 1944 Jan-12 Commissioner of
Central Excise
(Appeal), Bangalore
The Central Excise Act 1944 Jul 2011 to Nov 2011 Commissioner of
Central Excise
(Appeal), Bangalore
The Maharashtra Value Added FY 2004-2005 The Deputy
tax 2002 Commissioner
(Appeals), Pune
The Kerala General Sales FY 2002 - 03 The Deputy
Tax Act 1963 Commissioner
(Appeals), Ernakulam
The Central Excise Act 1944 FY 2010-11 to 2012-13 Commissioner of
Central Excise,
Bangalore
Income Tax Act 1961 FY 2003-04 to 2007-08 High Court of
Karnataka
* Net of amounts paid under protest or otherwise. Amount as per demand
order including interest and penalty wherever quantified.
(c) There were no amounts which were required to be transferred to the
Investor Education and Protection Fund by the Company.
viii. The Company does not have any accumulated losses as at the end of
the financial year. The Company has not incurred cash losses during the
current and in the immediately preceding financial year.
ix. Based on our audit procedures, information and explanations given
to us, in our opinion the Company has not defaulted in repayment of
dues to financial institutions and banks. The Company does not have any
outstanding debentures during the year.
x. In our opinion and according to the information and the explanations
given to us, the company has not given any guarantee for the loans
taken by others from banks or financial institutions.
xi. In our opinion and according to the information and explanations
given to us, the term loans taken by the company during the
year have been applied for the purposes for which they were obtained.
xii. To the best of our knowledge and according to the information and
explanations given to us, no fraud on or by the Company has been
noticed or reported during the course of our audit.
For M/s T D JAIN AND D I SAKARIA
Chartered Accountants
Firm registration no: 002491S
T D JAIN
Partner
M. No.: 012034
Bangalore
29 May 2015
Mar 31, 2014
We have audited the accompanying financial statements of M/s BAL PHARMA
LIMITED, which comprise the balance sheet as at 31 March 2014, and the
statement of profit and loss and cash flow statement for the year then
ended, and a summary of significant accounting policies and other
explanatory information.
Management''s responsibility for the financial statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the company in accordance with
the accounting principles generally accepted in India, including
Accounting standards referred to in sub-section (3C) of section 211 of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that give
a true and fair view and are free from material misstatement, whether
due to fraud or error.
Auditor''s responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the standards on auditing issued by the Institute of Chartered
Accountants of India. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgement, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanation given to us, the financial statements give the information
required by the Act in the manner so required and give a true and fair
INDEPENDENT AUDITORS'' REPORT
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the balance sheet, of the state of affairs of the
company as at 31 March 2014;
(b) in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
(c) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
(b) In our opinion proper books of account as required by law have been
kept by the company so far as it appears from our examination of those
books and proper returns adequate for the purpose of our audit have
been received from the branches not visited by us.
(c) The balance sheet, statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account and with the returns received from branches not visited by us.
(d) In our opinion, the balance Sheet, statement of profit and loss and
cash flow statement comply with the accounting standards referred to in
sub-section (3C) of section 211 of the Companies Act, 1956.
(e) On the basis of written representation received from the directors,
as on 31 March 2014 and taken on record by Board of Directors, we
report that none of the directors are disqualified as on 31 March 2014
from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Companies Act, 1956.
ANNEXURE TO THE AUDITOR''S REPORT
The Annexure referred to in paragraph 1 under the heading "Report on
other legal and regulatory requirements" of the auditor''s report of
even date.
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets. These
fixed assets were physically verified by management according to a
phased programme designed to cover all items over a period of three
years. Pursuant to the programme, physical verification of certain
assets was carried out during the year and we have been informed that
no material discrepancies were noticed on such physical verification.
Substantial part of fixed assets have not been disposed off during the
year, which will affect its status as going concern.
2. The stock of inventory has been physically verified during the year
by the management at reasonable intervals. In our opinion, the
procedures of physical verification of inventory, followed by the
management is reasonable and adequate in relation to the size of the
Company and the nature of its business. The Company is maintaining
proper records of inventory. The discrepancies noticed during the
physical verification of stocks as compared to book records were not
material; however, the same has been properly dealt with in the books
of account.
3. (a) According to the information and explanations given to us, the
company has not granted any loans to companies, firms or other parties
covered in the register maintained under Section 301 of the Companies
Act, 1956. Accordingly, the provisions of Clause 4(iii)(a) to (d) of
the order are not applicable to the Company and hence not commented
upon.
(b) The Company has taken interest free unsecured loans, from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. The Company has taken
interest free unsecured loan from its Managing Director. The maximum
balance outstanding during the year was Rs. 2,757,700/- and the year
end balance of the loan was Rs. Nil.
(c) In our opinion and according to the explanations given to us, the
rate of interest wherever applicable, and other terms and conditions on
which such loans have been taken from the companies, firms or other
parties listed in the register maintained under section 301 of the
Companies Act, 1956 are not prima facie prejudicial to the interest of
the Company.
(d) The Company is regular in repayment of demand loans.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods and services. During the course of our audit, we have not
observed any major weaknesses in internal control systems.
5. (a) According to the information and explanations provided by the
management, we are of the opinion that the particulars of contracts or
arrangements referred to in section 301 of the Companies Act, 1956 that
need to be entered into the register maintained under section 301 have
been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rs.500,000 have been entered
into during the financial year at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public and
consequently, the directives issued by the Reserve Bank of India and
the provisions of Section 58A, 58AA or any other relevant provisions of
the Act and the rules framed there under are not applicable to the
Company.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of accounts maintained by the
company pursuant to the rules prescribed by the Central Government for
maintenance of cost records under section 209(1)
(d) of the Companies Act, 1956; and are of the opinion that prima facie
the prescribed accounts and records have been made and maintained. We
have however not, made a detailed examination of these records with a
view to determine whether they are accurate and complete.
9. (a) According to the information and explanations given to us and
on the basis of our examination of books of account, the Company has
been generally regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs
duty, Excise duty, Cess and any other material statutory dues during
the year with the appropriate authorities. However, there have been
delays in remitting undisputed statutory dues with these authorities
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees''
State Insurance, Sales Tax, Income Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, Cess and other material statutory dues were
in arrears as at 31 March 2014 for a period of more than six months
from the date they became payable.
(c) According to the information and explanations given to us, there
are no amounts in respect of Provident Fund, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise duty and Cess that have
not been deposited with appropriate authorities on account of any
dispute other than those mentioned in Annexure 1 to this report.
10. The Company has no accumulated losses. The Company has not
incurred cash losses in the financial year under report and in the
immediately preceding financial year.
11. The Company has not defaulted in repayment of dues to its bankers
or to any financial institution. The Company did not have any
outstanding debentures during the year.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Accordingly, clause 4(xii) of the Order is not applicable.
13. The Company is not a chit fund, nidhi or mutual benefit
fund/society. Accordingly, clause 4(xiii) of the Order is not
applicable.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other securities. Accordingly, clause 4(xiv) of the Order is not
applicable.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions. Accordingly, clause 4(xv) of the Order is
not applicable.
16. In our opinion and according to information and explanations given
to us and on the basis of examination of books of accounts, the term
loans obtained by the Company were applied for the purpose for which
such loans were obtained.
17. According to the information and explanations given to us, and on
an overall examination of the Balance Sheet and Cash Flow statement of
the Company, funds raised by the Company on short-term basis have not
been used to finance long term investment.
18. The Company has made preferential allotment of shares to parties
and companies covered in the register maintained under section 301 of
the Act. In our opinion and according to the information and
explanation given to us, the price at which these shares have been
allotted is not prima facie prejudicial to the interest of the Company.
19. The Company has not issued any debentures. Hence the requirements
of clause (xix) of paragraph 4 of the Order are not applicable to the
Company.
20. The Company has not raised any money by way of public issue during
the year.
21. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India and according to the information and explanations
given to us, we have neither come across any instance of fraud on or by
the Company, noticed or reported during the year, nor have we been
informed of such case by the Management.
Annexure 1 as referred to in para 9(c) of annexure to the auditor''s
report
Name of the Statute Nature of dues Amount in Period to which
Rs. Amount relates
Service Tax under Service Tax 10,836,228 Nov 2007 to
Finance Act, 1994 and equivalent July 2011
penalty
The Central Excise Central Excise 723,340 F.Y. 2008-09
Act, 1944 Duty and Penalty
The Central Excise Central Excise 2,491,506 Apr 2005 to
Act, 1944 Penalty Nov 2009
The Central Excise Central Excise 868,598 May 2000 to
Act,1944 Duty and Penalty Nov 2001
The Central Excise Central Excise 1,209,387 Jul 2012 -
Act, 1944 Duty and Penalty Jan 2013
The Central Excise Central Excise 216,694 March 2012
Act,1944 Duty and Penalty
The Central Excise Central Excise 541,398 July 2011 -
Act, 1944 Duty and Penalty Nov 2011
Jan 2012
Maharashtra Value Central Sales 1,038,314 F.Y. 2004-05
added Tax 2002 Tax and Penalty
The Kerala General Local Sales Tax 749,720 F.Y. 2002-03
Sales Tax Act, 1963
Name of the Statute Forum where dispute is pending
Service Tax under Customs Excise Service Tax Appellate Tribunal,
Finance Act, 1994 Bangalore
The Central Excise Customs Excise Service Tax Appellate Tribunal,
Act, 1944 Bangalore
The Central Excise Customs Excise Service Tax Appellate Tribunal,
Act, 1944 Bangalore
The Central Excise Customs Excise Service Tax Appellate
Act,1944 Tribunal, Mumbai
The Central Excise Additional Commissioner of Central Exercise,
Act, 1944 Bangalore
The Central Excise Assistant Commissioner of Central Exercise,
Act,1944 Bangalore
The Central Excise Commissioner of Central Exercise (Appeals),
Act, 1944 and Bangalore
Maharashtra Value The Deputy Commissioner (Appeals), Pune
added Tax 2002
The Kerala General The Deputy Commissioner (Appeals), Ernakulam
Sales Tax Act, 1963
For T D JAIN AND D I SAKARIA
Chartered Accountants
Firm registration no: 002491S
T D JAIN
Bangalore Partner
28th May, 2014 M. No.: 012034
Mar 31, 2013
Report on the financial statements
We have audited the accompanying financial statements of M/s BAL PHARMA
LIMITED, which comprise the balance sheet as at 31 March 2013, and the
statement of profit and loss and cash flow statement for the year then
ended, and a summary of significant accounting policies and other
explanatory information.
Management''s responsibility for the financial statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the company in accordance with
the accounting principles generally accepted in India, including
Accounting standards referred to in sub-section (3C) of section 21 I of
the Companies Act, 1956 ("the Act"). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that ge a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditor''s responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the standards on auditing issued by the Institute of Chartered
Accountants of India. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance whether the financial statements are free from
material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgement, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Opinion
In our opinion and to the best of our information and according to the
explanation gK,en to us, the financial statements ge the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
India:
(a) in the case of the balance sheet, of the state of affairs of the
company as at 3 I March 2013;
(b) in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
(c) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 ("the
Order") issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit.
(b) In our opinion proper books of account as required by law have been
kept by the company so far as it appears from our examination of those
books.
(c) The balance sheet, statement of profit and loss and cash flow
statement dealt with by this report are in agreement with the books of
account.
(d) In our opinion, the balance Sheet, statement of profit and loss and
cash flow statement comply with the accounting standards referred to in
sub-section (3C) of section 21 I of the Companies Act, 1956.
(e) On the basis of written representation received from the directors,
as on 31 March 2013 and taken on record by Board of Directors, we
report that none of the directors is disqualified as on 3 I March 2013
from being appointed as a director in terms of clause (g) of
sub-section (I) of section 274 of the Companies Act, 1956.
ANNEXURE TO THE AUDITOR''S REPORT
The Annexure referred to in paragraph I under the heading
"Report on other legal and regulatory requirements" of the auditor''s
report of Bal Pharma Limited for the year ended 31 "March 2013
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets. These
fixed assets were physically verified by management according to a
phased programme designed to cover all items over a period of three
years. Pursuant to the programme, physical verification of certain
assets was carried out during the year and we have been informed that
no material discrepancies were noticed on such physical verification.
Substantial part of fixed assets have not been disposed off during the
year, which will affect its status as going concern.
2. The stock of inventory has been physically verified during the year
by the management at reasonable intervals. In our opinion, the
procedures of physical verification of inventory, followed by the
management is reasonable and adequate in relation to the size of the
Company and the nature of its business. The Company is maintaining
proper records of inventory. The discrepancies noticed during the
physical verification of stocks as compared to book records were not
material; however, the same has been properly dealt with in the books
of account.
3. (a) According to the information and explanations given to us, the
company has not granted any loans to companies, firms or other parties
covered in the register maintained under Section 301 of the Companies
Act, 1956. According, the provisions of Clause 4(iii)(a) to (d) of the
order are not applicable to the Company and hence not commented upon.
(b) The Company has taken interest free unsecured loans, from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. The Company has taken
interest free unsecured loan from its Managing Director. The maximum
balance outstanding during the year was Rs. 46,24,020/- and the yearend
balance of the loan was Rs. 21,24,020/-. This loan is repayable on
demand.
(c) In our opinion and according to the explanations given to us, the
rate of interest wherever applicable, and other terms and conditions on
which such loans have been taken from the companies, firms or other
parties listed in the register maintained under section 301 of the
Companies Act, 1956 are not prima facie prejudicial to the interest of
the Company.
(d) The Company is regular in repayment of demand loans.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods and services. During the course of our audit, we have not
observed any major weaknesses in internal control systems.
5. (a) According to the information and explanations provided by
the management, we are of the opinion that the particulars
of contracts or arrangements referred to in section 301 of the
Companies Act, 1956 that need to be entered into the register
maintained under section 301 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rs.500,000 have been entered into
during the financial year at prices which are reasonable having regard
to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public and
consequently, the directives issued by the Reserve Bank of India and
the provisions of Section 58A, 58AA or any other relevant provisions of
the Act and the rules framed there under are not applicable to the
Company.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of accounts maintained by the
company pursuant to the rules prescribed by the Central Government for
maintenance of cost records under section 209(1) (d) of the Companies
Act, 1956; and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have however
not, made a detailed examination of these records with a view to
determine whether they are accurate and complete.
9. (a) According to the information and explanations given to us and
on the basis of our examination of books of account, the Company has
been generally regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs
duty, Excise duty, Cess and any other material statutory dues during
the year with the appropriate authorities. However, there have been
delays in remitting undisputed statutory dues with these authorities
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees''
State Insurance, Sales Tax, Income Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, Cess and other material statutory dues were
in arrears as at 3 I March 2013 for a period of more than six months
from the date they became payable.
(c) According to the information and explanations given to us, there
are no amounts in respect of Provident Fund, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise duty and Cess that have
not been deposited with appropriate authorities on account of any
dispute other than those mentioned in Annexure I to this report.
10. The Company has no accumulated losses. The Company has not
incurred cash losses in the financial year under report and in the
immediately preceding financial year.
11. The Company has not defaulted in repayment of dues to its bankers
or to any financial institution. The Company did not have any
outstanding debentures during the year.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Accordingly, clause 4(xii) of the Order is not applicable.
13. The Company is not a chit fund, nidhi or mutual benefit
fund/society. Accordingly, clause 4(xiii) of the Order is not
applicable.
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other securities. Accordingly, clause 4(xiv) of the Order is not
applicable.
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions. Accordingly, clause 4(xv) of the Order is
not applicable.
16. In our opinion and according to information and explanations given
to us and on the basis of examination of books of accounts, the term
loans obtained by the Company were applied for the purpose for which
such loans were obtained.
17. According to the information and explanations given to us, and on
an overall examination of the Balance Sheet and Cash Flow statement of
the Company, funds raised by the Company on short- term basis have not
been used to finance long term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Act during the year. Accordingly, clause (xviii) of the
Order is not applicable.
19. The Company has not issued any debentures. Hence the requirements
of clause (xix) of paragraph 4 of the Order are not applicable to the
Company.
20. The Company has not raised any money by way of public issue during
the year.
21. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India and according to the information and explanations
given to us, we have neither come across any instance of fraud on or by
the Company, noticed or reported during the year, nor have we been
informed of such case by the Management.
Anncxurc I as referred to in para 9(c) of annexure to the auditor''s
report
Name of the Statute Nature of dues Amount in
Service Tax under Finance
Act, 1994 Service Tax and equivalent 1,08,36,228
penalty
The Central Excise Act,
1944 Central Excise Duty and
Penalty 7,23,340
The Central Excise Act,
1944 Central Excise Penalty 25,02,256
The Central Excise Act,
1944 Central Excise Duty and
Penalty 8,68,598
The Kerala General Sales
Tax Act, Local Sales Tax 7,49,720
1963
Period to which Forum where dispute is pending
Amount relate
Nov 2007 to Customs Excise Service Tax Appellate Tribunal,
July 201 Bangalore
FY 2008 - 09 Customs Excise Service Tax Appellate Tribunal,
Bangalore
Apr 2005 to Customs Excise Service Tax Appellate Tribunal,
Nov 2009 Bangalore
May 2000 to Customs Excise Service Tax Appellate Tribunal,
Nov 2001 Mumbai
FY 2002 - 03 The Deputy Commissioner (Appeals), Ernakulam
For TDJAINAND DISAKARIA
Chartered Accountants
Firm registration no: 00249IS
TDJAIN
Bangalore Partner
27th May, 2013 M. No, 012034
Mar 31, 2012
We have audited the attached balance sheet of Bal Pharma Limited as at
3I March 2012, the statement of profit and loss for the year ended on
that date annexed thereto and the cash flow statement for the year
ended on that date, which we have signed under reference to this
report. These financial statements are the responsibility of the
company's management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We have conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes, examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditor's Report) Order, 2003 as amended
by the Companies (Auditor's Report)(Amendment) order, 2004 issued by
the Central Government of India in terms of section 227 (4A) of the
Companies Act, I956 and on the basis of such checks as we considered
appropriate and according to the information and explanations given to
us, we set out in the annexure a statement on the matters specified in
paragraphs 4 and 5 of the said order.
Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of our
audit;
(ii) In our opinion, proper books of accounts as required by law, have
been kept by the company so far as appears from our examination of
those books;
(iii) The balance sheet, the statement of profit and loss and the cash
flow statement dealt with by this report are in agreement with the
books of account;
(iv) In our opinion, the balance sheet, the statement of profit and
loss and the cash flow statement dealt with by this report comply with
the accounting standards referred to in sub-section (3C) of Section 2II
of the Companies Act, I956 to the extent applicable;
(v) On the basis of the written representations received from the
directors, as on 3I March 2012 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
3I March 2012 from being appointed as a Director in terms of clause (g)
of sub-section (I) of section 274 of the Companies Act, I956 ; and
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, together with the
notes thereon and attached thereto and subject to Note no.43 regarding
non-confirmation of balances in parties accounts and pending review of
old balances, give in the prescribed manner the information required by
the Act and give a true and fair view in conformity with the accounting
principles generally accepted in India:
(a) in the case of the balance Sheet, of the state of affairs of the
company, as at 3I March 2012;
(b) in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
(c) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITOR'S REPORT
Annexure referred to in Paragraph 3 of the report of the Auditors to
the members of Bal Pharma Limited for the year ended 3I March 2012:
1. The company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets. These
fixed assets were physically verified by management according to a
phased programme designed to cover all the items over a period of three
years. Pursuant to the programme, physical verification of certain
assets was carried out during the year and we have been informed that
no material discrepancies were noticed on such physical verification.
Substantial part of fixed assets have not been disposed off during the
year, which will affect its status as going concern.
2. The stock of inventory has been physically verified during the year
by the management at reasonable intervals. In our opinion, the
procedures of physical verification of inventory, followed by the
management is reasonable and adequate in relation to the size of the
Company and the nature of its business. The Company is maintaining
proper records of inventory. The discrepancies noticed during the
physical verification of stocks as compared to book records were not
material; however, the same has been properly dealt with in the books
of account.
3. (a) According to the information and explanations given to us, the
company has not granted any loans to companies, firms or other parties
covered in the register maintained under Section 30I of the Companies
Act, I956. Accordingly, the provisions of clause 4(iii)(a) to (d) of
the order are not applicable to the company and hence not commented
upon.
(b) The company has taken interest free unsecured loans, from
companies, firms or other parties covered in the register maintained
under Section 30I of the Companies Act, I956. The company has taken
interest free unsecured loan from its Managing director. The maximum
balance outstanding during the year was Rs. 63,95,700/- and the yearend
balance of the loan was Rs. 33,80,700/-. This loan is repayable on
demand.
(c) In our opinion and according to the explanations given to us, the
rate of interest, wherever applicable, and other terms and conditions
on which such loans have been taken from the companies, firms or other
parties listed in the register maintained under section 30I of the
Companies Act, I956 are not prima facie prejudicial to the interest of
the company.
(d) The company is regular in repayment of demand loans.
4. In our opinion, there is an adequate internal control procedure
commensurate with the size of the Company and nature of its business,
for the purchase of inventory and fixed assets and for the sale of
goods and services. We have not observed any major weakness in the
internal control system during the course of our audit.
5. In our opinion, and according to the information and explanations
given by the management, we are of the opinion that contracts and
arrangements referred to in section 301 of the Act have been entered in
the register required to be maintained under that section and such
transactions have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public and
consequently, the directives issued by the Reserve Bank of India and
the provisions of Section 58A, 58AA or any other relevant provisions of
the Act and the rules framed there under are not applicable to the
Company
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules prescribed by the Central government for
maintenance of cost records under Section 209(1)
(d) of the Act and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have not however
made a detailed examination of records with a view to determining
whether they are accurate and complete.
9. a) According to the information and explanations given to us and on
the basis of our examination of books of account, the Company has been
generally regular in depositing undisputed statutory dues including
Provident Fund, Employees' State Insurance, Income Tax, Sales Tax,
Wealth Tax, Customs duty, Excise duty, Cess and any other material
statutory dues during the year with the appropriate authorities.
However, there have been delays in remitting undisputed statutory dues
with these authorities. Further, an amount of Rs. 184,828/- required to
be deposited during the year in Investor Education and Protection fund
towards unclaimed dividend of financial year 2003-04 has not been
deposited as at 31 March 2012.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees'
State Insurance, Sales Tax, Income Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, Cess and other material statutory dues were
in arrears as at 31 March 2012 for a period of more than six months
from the date they became payable. However an amount of Rs. 184,828/-
required to be deposited in Investor Education and Protection fund
towards unclaimed dividend of financial year 2003-04 was in arrears as
at 31 March 2012 for a period of more than six months from the date it
became payable.
c) According to the information and explanations given to us, there are
no amounts in respect of Provident Fund, Income Tax, Sales Tax, Wealth
Tax, Service Tax, Customs Duty, Excise duty and Cess that have not been
deposited with appropriate authorities on account of any dispute other
than those mentioned in Annexure I to this report.
10. The Company has no accumulated losses. The Company has not
incurred cash losses in the financial year under report and in the
immediately preceding financial year.
11. The Company has not defaulted in repayment of dues to its bankers
or to any financial institution. The Company did not have any
outstanding debentures during the year.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of Shares, debentures and other securities.
Accordingly, clause 4(xii) of the Order is not applicable.
13. The Company is not a chit fund, nidhi or mutual benefit fund/
society. Accordingly, clause 4(xiii) of the Order is not applicable.
14. Accordingly to the information and explanations given to us, the
Company is not dealing or trading in Shares, securities, debentures and
other investments. Accordingly clause 4(xiv) of the Order is not
applicable
15. Based on the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from bank or
financial institutions.
16. In our opinion and according to information and explanations given
to us and on the basis of examination of books of accounts, the term
loans obtained by the Company were applied for the purpose for which
such loans were obtained.
17. According to the information and explanations given to us, and on
an overall examination of balance sheet of the Company, we are of the
opinion that the funds raised on short-term basis have not been used
for long-term investments.
18. The Company has not made any preferential allotment of Shares to
parties and companies covered in the register maintained under section
30I of the Act during the year. Accordingly, clause (xviii) of the
Order is not applicable.
19. The Company has not issued any debentures. Hence the requirements
of clause (xix) of paragraph 4 of the Order are not applicable to the
Company.
20. The company has not raised any money by way of public issue during
the year.
21. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India and according to the information and explanations
given to us, we have neither come across any instance of fraud on or by
the Company, noticed or reported during the year, nor have we been
informed of such case by the Management.
Annexure 1 as referred to para 9 of annexure to the Auditor's Report
Name of the
Statute Nature
of dues Amount in Period to
which Forum where
dispute is
pending
Rs. Amount
relates
The Central
Excise
Act, I944 Central
Excise Duty
and penalty 8,68,598 2000-01 Customs, Excise,
Service Tax
Appellate, Mumbai
The Kerala
General
Sales Tax Local Sales
tax 7,49,720 2002-03 The Deputy
Commissioner
Act,1963 (Appeals), Ernakulam
For T D JAIN AND D I SAKARIA
Chartered Accountants
Firm registration no: 00249IS
T D JAIN
Bangalore Partner
10th August, 2012 M. No.: 12034
Mar 31, 2010
We have audited the attached Balance Sheet of Bal Pharma Limited as at
31 March 2010, the Profit and Loss Account for the year ended on that
date annexed thereto and the cash flow statement for the year ended on
that date, which we have signed under reference to this report. These
financial statements are the responsibility of the Companys
Management. Our responsibility is to express an opinion on these
financial statements based on our audit.
We have conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes, examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
our opinion.
As required by the Companies (Auditors Report) Order, 2003 as amended
by the Companies (Auditors Report)(Amendment) order, 2004 issued by
the Central Government of India in terms of section 227 (4A) of the
Companies Act, 1956 and on the basis of such checks as we considered
appropriate and according to the information and explanations given to
us, we set out in the annexure a statement on the matters specified in
paragraphs 4 and 5 of the said order.
Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of our
audit;
(ii) In our opinion, proper books of accounts as required by law, have
been kept by the Company so far as appears from our examination of
those books;
(iii) The Balance Sheet, the Profit and Loss Account and the Cash Flow
Statement dealt with by this report are in agreement with the books of
account;
(iv) In our opinion, the Balance Sheet, the Profit and Loss Account and
the Cash Flow Statement dealt with by this report comply with the
Accounting Standards referred to in sub-section (3C) of Section 211 of
the Companies Act, 1956 to the extent applicable;
(v) On the basis of the written representations received from the
directors, as on 31 March 2010 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
31 March 2010 from being appointed as a Director in terms of clause (g)
of sub-section (1) of section 274 of the Companies Act, 1956 ; and
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, together with the
notes thereon and attached thereto and subject to Note no.13
regarding non-confirmation of balances in parties accounts and pending
review of old balances, give in the prescribed manner the information
required by the Act and give a true and fair view in conformity with
the accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company, as at 31st March 2010;
(b) in the case of the Profit and Loss Account, of the Loss for the
year ended on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITORS REPORT
Annexure referred to in Paragraph 3 of the report of the Auditors to
the members of Bal Pharma Limited for the year ended 31st March 2010:
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets. These
fixed assets were physically verified by management according to a
phased programme designed to cover all the items over a period of three
years. Pursuant to the programme, physical verification of certain
assets was carried out during the year and we have been informed that
no material discrepancies were noticed on such physical verification.
Substantial part of fixed assets have not been disposed off during the
year, which will affect its status as going concern.
2. The stock of inventory has been physically verified during the year
by the management at reasonable intervals. In our opinion, the
procedures of physical verification of inventory followed by the
management is reasonable and adequate in relation to the size of the
Company and the nature of its business. The Company is maintaining
proper records of inventory. The discrepancies noticed during the
physical verification of stocks as compared to book records were not
material; however, the same has been properly dealt with in the books
of account.
3. (a) As per the records of the Company, it had granted interest
free unsecured loan to Companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956. The
Company has granted interest free unsecured advance to its subsidiary
companies. The maximum amount involved Rs 64, 86,537/- and the year end
balance of loan was Rs 64, 60,000/-.
(b) Based on the information received and the explanations given, the
terms and conditions of the advance are prima facie not prejudicial to
the interest of the Company.
(c) As informed to us, no repayment was due during the year.
(d) As per records of the Company, it has not taken any loans, secured
or unsecured from companies, firms or other parties covered in the
register maintained under Section 301 of the Companies Act, 1956.
Accordingly sub-clauses (f) and (g) of clause 4(iii) of the order is
not applicable.
4. In our opinion, there is an adequate internal control procedure
commensurate with the size of the Company and nature of its business,
for the purchase of inventory and fixed assets and for the sale of
goods and services. We have not observed any major weakness in the
internal control system during the course of our audit.
5. In our opinion, and according to the information and explanations
given by the management, we are of the opinion that contracts and
arrangements referred to in section 301 of the Act have been entered in
the register required to be maintained under that section and such
transactions have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public and
consequently, the directives issued by the Reserve Bank of India and
the provisions of Section 58A, 58AA or any other relevant provisions of
the Act and the rules framed there under are not applicable to the
Company.
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules prescribed by the Central government for
maintenance of cost records under Section 209(1) (d) of the Act; and
are of the opinion that prima facie the prescribed accounts and records
have been made and maintained. We have not however made a detailed
examination of records with a view to determining whether they are
accurate and complete.
9. a) According to the information and explanations given to us
and on the basis of our examination of books of account, the Company
has been generally regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs
duty, Excise duty, Cess and any other material statutory dues during
the year with the appropriate authorities.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees
State Insurance, Sales Tax, Income Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, Cess and other material statutory dues were
in arrears as at 31 March 2010 for a period of more than six months
from the date they became payable.
c) According to the information and explanations given to us, there are
no amounts in respect of Provident Fund, Income Tax, Sales Tax, Wealth
Tax, Service Tax, Customs Duty, Excise duty and Cess that have not been
deposited with appropriate authorities on account of any dispute other
than those mentioned in Annexure 1 to this report.
10. The Company has no accumulated losses. The Company has not
incurred cash losses in the financial year under report and in the
immediately preceding financial year.
11. The Company has not defaulted in repayment of dues to its bankers
or to any financial institution. The Company did not have any
outstanding debentures during the year.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Accordingly, clause 4(xii) of the Order is not applicable.
13. The Company is not a chit fund, nidhi or mutual benefit fund/
society. Accordingly, clause 4(xiii) of the Order is not applicable.
14. Accordingly to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments. Accordingly clause 4(xiv) of the Order is not
applicable.
15. Based on the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from bank or
financial institutions.
16. In our opinion and according to information and explanations given
to us and on the basis of examination of books of accounts, the term
loans obtained by the Company were applied for the purpose for which
such loans were obtained.
17. According to the information and explanations given to us, and on
an overall examination of balance sheet of the Company, we are of the
opinion that the funds raised on short-term basis have not been used
for long-term investments.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Act during the year. Accordingly, clause (xviii) of the
Order is not applicable.
19. The Company has not issued any debentures. Hence the requirements
of clause (xix) of paragraph 4 of the Order are not applicable to the
Company.
20. The company has not raised any money by way of public issue during
the year.
21. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India and according to the information and explanations
given to us, we have neither come across any instance of fraud on or by
the Company, noticed or reported during the year, nor have we been
informed of such case by the Management.
Name of the
Statue Nature of
dues Amount in Period to
which Forum where
dispute is
Rs Amount re
lates pending
The Central
Excise Act,
1944 Central Excise
Duty and penalty 8,68,598 2000-01 Customs,
Excise, Ser
vice Tax
Appellate,
Mumbai
The Kerala
General sales
Tax Local Sales Tax 7,49,720 2002-03 The Deputy
Commissio
ner (Ap-
Act,1963 peals),
Ernakulam
The Central
Excise Act,
1944 Central Excise
Duty 10,34,757 1996-97 Supreme
court of
India
The Central
Excise Act,
1944 Central Excise
Duty 8,98,929 1997-98 Supreme
court of
India
The Income
Tax Act 1961 TDS 89,50,429 2004-05
to
2008-09 Commiss
ioner of
Income Tax
Appeals
On the Consolidated Financial statements of M/s. BAL PHARMA LTD., and
its subsidiaries
We have examined the attached Consolidated Balance Sheet of M/s. Bal
Pharma Ltd., (Ãthe companyÃ) and its subsidiaries (collectively
referred to as the ÃBal Pharmas GroupÃ) as at 31 March 2010 and also
the Consolidated profit and loss account and Consolidated cash flow
statement for the year ended on that date annexed thereto. These
Consolidated financial statements are the responsibility of the
Companys Management. Our responsibility is to express an opinion on
these Consolidated financial statements based on our audit.
We have conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
consolidated financial statements are free of material misstatement. An
audit includes, examining, on a test basis, evidence supporting the
amounts and disclosures in the consolidated financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by Management, as well as evaluating the
overall consolidated financial statement presentation. We believe that
our audit provides a reasonable basis for our opinion.
The consolidated financial statements have been prepared by the
companys management in accordance with the requirements of Accounting
Standard (AS) Ã21-consolidated financial statements, issued by the
Institute of Chartered Accountants Of India and on the basis of the
separate audited financial statements of M/s. Bal Pharma Ltd., and its
subsidiary M/s. Basav Chem Ltd included in the consolidated financial
statements.
In our opinion and to the best of our information and according to the
explanations given to us and on the consideration of the separate audit
reports on individual audited financial statements of M/s. Bal Pharma
Ltd., and its aforesaid subsidiaries, the Consolidated financial
statements give a true and fair view in conformity with the accounting
principles generally accepted in India:
(i) in the case of the Consolidated Balance sheet of the consolidated
state of affaires of Bal Pharmas Group as at 31 March 2010;
(ii) in the case of Consolidated Profit and Loss Account, of the
consolidated results of operations of Bal Pharmas Group for the year
ended on that date; and
(iii) in the case of Consolidated Cash Flow Statement, of the
Consolidated cash flows of Bal Pharmas Group for the year ended on
that date.
For Ostawal & Jain
ICAI FRN NO. 002491S
Chartered Accountants
Bangalore T. D. JAIN
Date: 09.08.2010 Partner
M.M.No: 12034
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