Mar 31, 2023
BALKRISHNA INDUSTRIES LIMITEDReport on the Audit of the Standalone Financial Statements OPINION
We have audited the standalone financial statements of Balkrishna Industries Limited (the Company), which comprise the Balance Sheet as at 31st March, 2023, and the Statement of Profit and Loss (including other comprehensive income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").
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 Companies Act, 2013 ("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 2023, and profit (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.
BASIS FOR OPINION
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
KEY AUDIT MATTERS
Key audit matters (''KAM'') are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Description of Key Audit Matters
The key audit matters |
How our audit addressed the matter |
Capitalisation of property, plant and equipment |
Principal Audit Procedures |
During the year ended 31st March, 2023, the Company has incurred significant capital expenditure. Further the total additions to property, plant and equipment at various locations of the Company was '' 1,93,576 lakhs in the current year as set out in Note No.2. Significant level of judgement is involved to ensure that the aforesaid capital expenditure/ additions meet the recognition criteria of Ind AS 16 - Property, Plant and Equipment. As a result, the aforesaid matter was determined to be a key audit matter. |
Our audit procedures included the following substantive procedures: ⢠We assessed the capitalisation process and tested the design and operating effectiveness of the controls in the process. ⢠Assessed the nature of the additions made to property, plant and equipment and capital work-in-progress on a test check basis to test that they meet the recognition criteria as set out in para 16 to 22 of Ind AS 16. ⢠Reviewed the project completion details provided by the management to determine whether the asset is in the location and condition necessary for it to be capable of operating in the manner intended by the management. Based on the above procedures, management''s assessment in respect of Capitalisation of property, plant and equipment in the Standalone Financial Statements are considered to be adequate. |
Information Other than the Financial Statements and Auditor''s Report Thereon
The Company''s Board of Directors are responsible for the other information. The other information comprises the information included in the report of the Board of Directors including Annexures thereto, Management Discussion and Analysis Report and Business Responsibility Report, but does not include the standalone financial statements and our auditor''s report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
MANAGEMENT''S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Company''s management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit / loss (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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; 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors is responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Board of Directors is also responsible for overseeing the Company''s financial reporting process.
AUDITOR''S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors'' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate, makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone financial statements may be influenced. We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the results of our work; and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
OTHER MATTER
The comparative financial information of the Company for the year ended 31stMarch, 2022, prepared in accordance with Ind AS, included in the standalone financial statements have been audited by the predecessor auditors. The report of the predecessor auditors on these comparative financial information dated 13th May,2022 expressed an unmodified opinion.
Our opinion on the Statement is not modified in respect of this matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditors'' Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in "Annexure" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
A. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the 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 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 standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31st March, 2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2023 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 with reference to financial statements 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 the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
(h) 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 as at 31st March, 2023 on its financial position in its standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material 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.
iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material
either individually or in the aggregate) have been advanced or loaned or invested ( either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including
foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11 (e), as provided under (a) and (b) above, contain any material misstatement.
v. The final dividend proposed in the previous year, declared and paid by the Company during the year is in accordance with section 123 of the Act, as applicable.
As stated in Note No. 50 to the financial statements, the Board of Directors of the Company have proposed final dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend proposed is in accordance with section 123 of the Act, as applicable.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books of account using accounting software which has a feature of recording audit trail (edit log) facility is applicable to the Company w.e.f. 1st April, 2023, and accordingly, reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable for the financial year ended 31st March, 2023.
CHARTERED ACCOUNTANTS (FIRM REG. NO. 104133W)
PARTNER
PLACE: Mumbai MEMBERSHIP NO. 116279
DATE: 27th May, 2023 UDIN: 23116279BGWHRL9494
Mar 31, 2022
BALKRISHNA INDUSTRIES LIMITEDReport on the Audit of the Standalone Financial StatementsOPINION
We have audited the standalone financial statements of Balkrishna Industries Limited (the Company), which comprise the Balance Sheet as at 31st March, 2022, and the Statement of Profit and Loss (including other comprehensive income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").
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 Companies Act, 2013 ("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 2022, and profit (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key audit matters (''KAMâ) are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Description of Key Audit Matters
The key audit matters |
How our audit addressed the matter |
Capitalisation of property, plant and equipment |
principal Audit procedures |
During the year ended 31st March, 2022, the Company has incurred significant capital expenditure. Further the total additions to property, plant and equipment at various locations of the Company was Rs.1,10,459 lakhs in the current year as set out in Note No.2. Significant level of judgement is involved to ensure that the aforesaid capital expenditure/additions meet the recognition criteria of Ind AS 16 - Property, Plant and Equipment. As a result, the aforesaid matter was determined to be a key audit matter. |
Our audit procedures included the following substantive procedures: ⢠We assessed the capitalisation process and tested the design and operating effectiveness of the controls in the process. ⢠Assessed the nature of the additions made to property, plant and equipment and capital work-in-progress on a test check basis to test that they meet the recognition criteria as set out in para 16 to 22 of Ind AS 16. ⢠Reviewed the project completion details provided by the management to determine whether the asset is in the location and condition necessary for it to be capable of operating in the manner intended by the management. Based on the above procedures, management''s assessment in respect of Capitalisation of property, plant and equipment in the Standalone Financial Statements are considered to be adequate. |
The Companyâs management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the standalone financial statements and our auditors ''report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
MANAGEMENT''S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS
The Companyâs management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit / loss (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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; 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors is responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Board of Directors is also responsible for overseeing the Companyâs financial reporting process.
AUDITOR''S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors'' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditors'' Report) Order, 2020 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in "Annexure"a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
A. As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the 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 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 standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31st March, 2022 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2022 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 with reference to financial statements 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 the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
(h) 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 as at 31st March, 2022 on its financial position in its standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material 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.
iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are
material either individually or in the aggregate) have been advanced or loaned or invested ( either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person or entity, including foreign entity ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11 (e), as provided under (a) and (b) above, contain any material misstatement.
v. The dividend declared or paid during the year by the Company is in compliance with Section 123 of the Act.
Chartered Accountants (Firm Reg. No. 110907W)
Partner
Place: Mumbai Membership No. 036213
Date: 13th May, 2022 UDIN: 22036213AIYHPO1934
Mar 31, 2021
We have audited the standalone financial statements of Balkrishna Industries Limited ("the Company"), which comprise the Balance Sheet as at 31st March, 2021, and the Statement of Profit and Loss (including other comprehensive income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as "the standalone financial statements").
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 Companies Act, 2013 ("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, 2021, and profit (including other comprehensive income), changes in equity and its cash flows for the year ended on that date. Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor''s Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters (''KAM'') are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Description of Key Audit Matters
Capitalisation of property, plant and equipment |
Principal Audit Procedures |
During the year ended 31st March,2021, the Company has incurred significant capital expenditure. Further the total additions to property, plant and equipment at various factories of the Company was '' 46,617 lakhs in the current year as set out in Note No.2. Significant level of judgement is involved to ensure that the aforesaid capital expenditure/ additions meet the recognition criteria of Ind AS 16 - Property, Plant and Equipment. As a result, the aforesaid matter was determined to be a key audit matter. |
⢠We assessed the capitalisation process and tested the design and operating effectiveness of the controls in the process. ⢠Assessed the nature of the additions made to property, plant and equipment and capital work-in-progress on a test check basis to test that they meet the recognition criteria as set out in para 16 to 22 of Ind AS 16. ⢠Reviewed the project completion details provided by the management to determine whether the asset is in the location and condition necessary for it to be capable of operating in the manner intended by the management. Based on the above procedures, management''s assessment in respect of Capitalisation of property, plant and equipment in the Standalone Financial Statements are considered to be adequate. |
The Company''s management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company''s annual report, but does not include the standalone financial statements and our auditors'' report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Management''s Responsibility for the Standalone Financial Statements
The Company''s management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit / loss
(including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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; 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Company''s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Board of Directors are also responsible for overseeing the Company''s financial reporting process.
Auditor''s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor''s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
⢠Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
⢠Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.
⢠Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
⢠Conclude on the appropriateness of management''s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company''s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor''s report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors'' report. However, future events or conditions may cause the Company to cease to continue as a going concern.
⢠Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors'' report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
1. As required by the Companies (Auditors'' Report) Order, 2016 ("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act, we give in "Annexure A" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
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 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 standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31st March, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2021 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 with reference to financial statements 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 the requirements of section 197(16) of the Act, as amended:
In our opinion and to the best of our information and according to the explanations given to us, the remuneration paid by the Company to its directors during the year is in accordance with the provisions of section 197 of the Act.
(h) 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 as at 31 st March, 2021 on its financial position in its standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material 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.
CHARTERED ACCOUNTANTS (FIRM REG. NO. 110907W)
PARTNER MEMBERSHIP NO. 036213 UDIN: 21036213AAAABT2270
PLACE: Mumbai DATE: 14th May, 2021
Mar 31, 2019
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the standalone financial statements of Balkrishna Industries Limited (âthe Companyâ), which comprise the Balance Sheet as at 31st March, 2019, and the Statement of Profit and Loss (including other comprehensive income), Statement of Changes in Equity and Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information (hereinafter referred to as âthe standalone financial statementsâ).
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 Companies Act, 2013 (âthe Actâ) 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 2019, and profit (including other comprehensive income), changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditorâs Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters (âKAMâ) are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Key audit matter:
Revenue recognition(refer Note No.1(B)(c)
The Companyâs profit is dependent on proper accounting of Revenue and is therefore susceptible to misstatement. Cutoff is the key assertion in so far as revenue recognition is concerned, since an inappropriate cut-off can result in material misstatement of results for the year.
Auditorâs response
Our audit procedures with regard to revenue recognition included testing controls, automated and manual, dispatches/ deliveries, inventory reconciliations and assessing the recoverability of trade receivable balances, substantive testing for cut-offs and analytical review procedures.
Other Information
The Companyâs management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companyâs annual report, but does not include the standalone financial statements and our auditorsâ report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact.
We have nothing to report in this regard.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit / loss (including other comprehensive income), changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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; 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Companyâs ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Board of Directors are also responsible for overseeing the Companyâs financial reporting process.
Auditorâs Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditorâs report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to standalone financial statements in place and the operating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of managementâs use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companyâs ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditorâs report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditorsâ report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditorsâ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in âAnnexure Aâ a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
(A) As required by Section 143(3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations which to the 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 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 standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on 31st March, 2019 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2019 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 with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in âAnnexure Bâ.
(B) With respect to the matter to be included in the Auditorâs Report under section 97(16) of the Act, as ammended :
In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act.
(C) With respect to the other matters to be included in the Auditorâs 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 as at 31st March, 2019 on its financial position in its standalone financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material 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.
Annexure - A to the Independent Auditorâs Report
The Annexure referred to in Independent Auditorâs Report to the members of the Company on the standalone financial statements for the year ended 31st March 2019, we report that:
(i) (a) In our opinion, the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) As explained to us, physical verification of these fixed assets is being conducted in a phased programme by the management designed to cover all the assets over a period of three to four years, which in our opinion is reasonable having regard to the size of the Company and the nature of assets. According to the information and explanations given to us no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) As explained to us physical verification of inventory has been conducted at reasonable intervals by the management and discrepancies noticed on such physical verification between physical stocks and book records were not material considering the operations of the Company and the same have been properly dealt with in the books of account.
(iii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to any companies, firms, Limited Liability Partnerships or other parties as covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clause 3(iii) (a), (b) and (c) of the order are not applicable.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to loans, investments and guarantees made.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit within the meaning of Section 73 to 76 of the Act, and the rules framed thereunder.
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government, the maintenance of cost records have been prescribed under Section 148 (1) 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 the records with a view to determining whether they are accurate or complete.
(vii) (a) According to the records of the Company and the information and explanations given to us, the Company has generally been regularly depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income tax, Sales-Tax, Service tax, Duty of Customs , Duty of Excise, Value added Tax, Goods and Service Tax, Cess and any other statutory dues applicable to it. There are no undisputed statutory dues as referred to above as at 31st March, 2019 outstanding for a period of more than six months from the date they become payable.
(b) According to the information and explanations given to us, the dues in respect of Income Tax, Sales Tax, Duty of Customs , Excise Duty and Service Tax that have not been deposited with the appropriate authorities on account of dispute and the forum where the disputes are pending are given below :-
Name of Statute |
Nature of Dues |
Amount |
Period to which the Amount Relates |
Forum where dispute is pending |
(Rs. in Lakhs) |
||||
Income Tax Act |
Income Tax |
207 |
2004-05 |
Supreme Court |
Sales Tax Act |
Sales Tax (Including Interest and Penalty) |
3 61 291 89 |
2004-05 2011-12 1996-97 & 2012-2015 2013-17 |
High Court Tribunal Commissioner (Appeals) Assessing Authority |
Customs Act |
Custom Duty (Including Interest and Penalty) |
5,154 2,616 |
2012-2014 2012-2016 |
Supreme Court CESTAT |
Central Excise |
Excise Duty/ Service tax |
73 |
2002-2005 |
Supreme Court |
And Service |
(Including Interest and |
|||
Tax Act |
Penalty) |
3,269 |
2007-2013 |
High Court |
262 |
2006-2009 & 2011-2017 |
Tribunal |
||
116 |
2012-2017 |
Commissioner (Appeals) |
||
238 |
2003-2008 & 2014-2019 |
Assessing Authority |
(viii) Based on our audit procedures and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans from bank. Further as per the records of the Company, during the year there were no loans or borrowings from any financial institution, government or debenture holders.
(ix) In our opinion and according to the information and the explanations given to us, the term loans have been applied for the purposes for which they were obtained. Further as per the records, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments).
(x) Based upon the audit procedures performed and to the best of our knowledge and belief and according to the information and explanations given to us no fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) According to the information and explanations give 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, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable Indian Accounting Standards.
(xiv) According to the information and explanations given 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.
Annexure - B to the Independent Auditorâs Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (âthe Actâ)
We have audited the internal financial controls over financial reporting of Balkrishna Industries Limited (âthe Companyâ) as of 31st March, 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managementâs Responsibility for Internal Financial Controls
The Companyâs 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 (âICAIâ). 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 companyâs 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 Act.
Auditorâs Responsibility
Our responsibility is to express an opinion on the Companyâs 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 âGuidance Noteâ) 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 auditorâs judgment, including the assessment of the risks of material misstatement of the standalone 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 Companyâs internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companyâs 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 companyâs 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companyâs 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, to the best of our information and according to the explanations given to us, the Company has, in all material respects, an internal financial controls with reference to financial statements as at 31st March, 2019, 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 N.G.THAKRAR & CO.
CHARTERED ACCOUNTANTS
(FIRM REG. NO. 110907W)
NATWAR THAKRAR
PARTNER
MEMBERSHIP NO. 036213
PLACE: Mumbai
DATE: 17th May, 2019
Mar 31, 2018
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Balkrishna Industries Limited (âthe Companyâ), which comprise the balance sheet as at 31st March 2018, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information.
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) 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 (Ind AS) 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 judgments 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 standalone 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 financial statements based on our audit. In conducting 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 thereunder and the Order issued under section 143(11) of the Act.
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 standalone financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone 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 Companyâs Directors, as well as evaluating the overall presentation of the standalone financial statements.
We believe that the audit evidence obtained by us 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, 2018, and its profit, total comprehensive income, the changes in equity and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 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;
(c) the balance sheet, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity dealt with by this Report are in agreement with the books of account;
(d) in our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act;
(e) on the basis of the written representations received from the directors as on 31st March 2018 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2018 from being appointed as a director in terms of Section 164 (2) of the Act;
(f) with respect to the internal financial controls, with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate report in âAnnexure Bâ; and
(g) with respect to the other matters to be included in the Auditorâs 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 on its financial position in its standalone financial statements;
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material 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.
ANNEXURE - A TO THE INDEPENDENT AUDITORSâ REPORT
The Annexure referred to in Independent Auditorsâ Report to the members of the Company on the standalone financial statements for the year ended 31st March 2018, we report that:
(i) (a) In our opinion, the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) As explained to us, physical verification of these fixed assets is being conducted in a phased programme by the management designed to cover all the assets over a period of three to four years, which in our opinion is reasonable having regard to the size of the Company and the nature of assets. According to the information and explanations given to us no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) As explained to us physical verification of inventory has been conducted at reasonable intervals by the management and discrepancies noticed on such physical verification between physical stocks and book records were not material considering the operations of the Company and the same have been properly dealt with in the books of account.
(iii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to any companies, firms, Limited Liability Partnerships or other parties as covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clause 3(iii) (a), (b) and (c) of the order are not applicable.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to loans, investments and guarantees made.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit within the meaning of Section 73 to 76 of the Act, and the rules framed thereunder.
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government, the maintenance of cost records have been prescribed under Section 148 (1) 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 the records with a view to determining whether they are accurate or complete.
(vii) (a) According to the records of the Company and the information and explanations given to us, the Company has generally been regularly depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income tax, Sales-Tax, Service tax, Duty of Customs , Duty of Excise, Value added Tax, Goods and Service Tax, Cess and any other statutory dues applicable to it. There are no undisputed statutory dues as referred to above as at 31st March, 2018 outstanding for a period of more than six months from the date they become payable.
(b) According to the information and explanations given to us, the dues in respect of Income Tax, Sales Tax, Duty of Customs, Excise Duty and Service Tax that have not been deposited with the appropriate authorities on account of dispute and the forum where the disputes are pending are given below :-
Name of Statute |
Nature of Dues |
Amount (Rs.in lakhs) |
Period to which the Amount Relates |
Forum where dispute is pending |
Income Tax Act |
Income Tax |
207 |
2004-05 |
Supreme Court |
Sales Tax Act |
Sales Tax (Including Interest and Penalty) |
3 |
2004-05 |
High Court |
61 |
2011-12 |
Tribunal |
||
141 |
1996-97 & 2012-2014 |
Commissioner (Appeals) |
||
5 |
2013-14 |
Assessing Authority |
||
Customs Act |
Custom Duty (Including Interest and Penalty) |
4714 |
2012-2014 |
Supreme Court |
399 |
2012-13 & 2015-16 |
CESTAT |
||
25 |
2015-16 |
Commissioner |
||
Central Excise |
Excise Duty/ Service tax |
126 |
2002-2006 |
Supreme Court |
And Service |
(Including Interest and |
|||
Tax Act |
Penalty) |
262 |
2003-2010 |
High Court |
409 |
2006-2015 |
Tribunal |
||
207 |
2012-2017 |
Commissioner (Appeals) |
||
198 |
1994-1996 & 2016-17 |
Assessing Authority |
(viii) Based on our audit procedures and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans from bank. Further as per the records of the Company, during the year there were no loans or borrowings from any financial institution, government or debenture holders.
(ix) In our opinion and according to the information and the explanations given to us, the term loans have been applied for the purposes for which they were obtained. Further as per the records, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments).
(x) Based upon the audit procedures performed and to the best of our knowledge and belief and according to the information and explanations given to us no fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) According to the information and explanations give 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, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable Indian Accounting Standards.
(xiv) According to the information and explanations given 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.G.THAKRAR & CO.
CHARTERED ACCOUNTANTS
(FIRM REG. NO. 110907W)
PLACE: Mumbai NATWAR THAKRAR
DATE: 17th May, 2018 PARTNER
MEMBERSHIP NO. 036213
Mar 31, 2017
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of Balkrishna Industries Limited (âthe Companyâ), which comprise the balance sheet as at 31st March 2017, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity for the year then ended and a summary of the significant accounting policies and other explanatory information (herein after referred to as âstandalone Ind AS financial statementsâ).
Managementâs Responsibility for the Standalone Financial Statements
The Companyâs Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (âthe Actâ) with respect to the preparation of these standalone Ind AS 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 accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act read with relevant rules issued thereunder.
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; 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 standalone Ind AS 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 thereunder.
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 standalone Ind AS financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditorâs judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companyâs preparation of the standalone Ind AS 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 Companyâs 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 the 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 including the Ind AS, of the state of affairs of the Company as at 31st March, 2017, and its financial performance including other comprehensive income, its cash flows and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditorâs Report) Order, 2016 (âthe Orderâ) issued by the Central Government of India in terms of section 143(11) of the Act, we give in the Annexure A, a statement on the matters specified in the paragraph 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;
(c) the balance sheet, the statement of profit and loss (including other comprehensive income), the statement of cash flows and the statement of changes in equity dealt with by this Report are in agreement with the books of account;
(d) in our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards specified under Section 133 of the Act read with relevant rule issued thereunder;
(e) on the basis of the written representations received from the directors as on 31st March 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March 2017 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 âAnnexure Bâ; and
(g) with respect to the other matters to be included in the Auditorâs 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 on its financial position in its standalone Ind AS 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; and
iv. the Company has provided requisite disclosures in its standalone Ind AS financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30 December, 2016 and these are in accordance with the books of accounts maintained by the Company.
Annexure - A to the Auditorsâ Report
The Annexure referred to in Independent Auditorsâ Report to the members of the Company on the standalone Ind AS financial statements for the year ended 31st March 2017, we report that:
(i) (a) In our opinion, the Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) As explained to us, physical verification of these fixed assets is being conducted in a phased programme by the management designed to cover all the assets over a period of three to four years, which in our opinion is reasonable having regard to the size of the Company and the nature of assets. According to the information and explanations given to us no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the title deeds of immovable properties are held in the name of the Company.
(ii) As explained to us physical verification of inventory has been conducted at reasonable intervals by the management and discrepancies noticed on such physical verification between physical stocks and book records were not material considering the operations of the Company and the same have been properly dealt with in the books of account.
(iii) In our opinion and according to the information and explanations given to us, the Company has not granted any loans, secured or unsecured, to any companies, firms, Limited Liability Partnerships or other parties as covered in the register maintained under Section 189 of the Act. Accordingly, the provisions of clause 3(iii) (a), (b) and (c) of the order are not applicable.
(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of section 185 and 186 of the Act, with respect to loans, investments and guarantees made.
(v) In our opinion and according to the information and explanations given to us, the Company has not accepted any deposit within the meaning of Section 73 to 76 of the Act, and the rules framed thereunder.
(vi) We have broadly reviewed the books of account maintained by the Company in respect of products where, pursuant to the Rules made by the Central Government, the maintenance of cost records have been prescribed under Section 148 (1) 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 the records with a view to determining whether they are accurate or complete.
(vii) (a) According to the records of the Company and the information and explanations given to us, the Company has generally been regularly depositing with the appropriate authorities undisputed statutory dues including Provident Fund, Employeesâ State Insurance, Income tax, Sales-Tax, Service tax, Duty of Customs , Duty of Excise, Value added Tax, Cess and any other statutory dues applicable to it. There are no undisputed statutory dues as referred to above as at 31st March, 2017 outstanding for a period of more than six months from the date they become payable.
(b) According to the information and explanations given to us, the dues in respect of Income Tax, Sales Tax, Duty of Customs , Excise Duty and Service Tax that have not been deposited with the appropriate authorities on account of dispute and the forum where the disputes are pending are given below :-
Name of Statute |
Nature of Dues |
Amount (Rs.in lakhs) |
Period to which the Amount Relates |
Forum where dispute is pending |
Income Tax Act |
Income Tax |
207 |
2004-05 |
Supreme Court |
Sales Tax Act |
Sales Tax (Including Interest and Penalty) |
1621 |
1996-97,1998-99 2008-09 |
Commissioner (Appeals) |
3 |
2004-05 |
High Court |
||
Customs Act |
Custom Duty (Including Interest and Penalty) |
36 75 23 4 |
2012-2014 2012-2013, 2015-2016 |
Supreme Court CESTAT |
Central Excise And Service Tax Act |
Excise Duty/ Service tax (Including Interest and Penalty) |
187 3734 204 |
2003-2008 2005-2015 2007-2017 |
High Court Tribunal Commissioner (Appeals) |
77 |
1994-1996 2013-2016 |
Assessing Authority |
||
124 |
2012-2014 |
Joint Secretary |
(viii) Based on our audit procedures and according to the information and explanations given by the management, the Company has not defaulted in repayment of loans from bank.
Further as per the records of the Company, during the year there were no loans or borrowings from any financial institution, government or debenture holders.
(ix) In our opinion and according to the information and the explanations given to us, the term loans have been applied for the purposes for which they were obtained. Further as per the records, the Company did not raise any money by way of initial public offer or further public offer (including debt instruments).
(x) Based upon the audit procedures performed and to the best of our knowledge and belief and according to the information and explanations given to us no fraud by the company or any fraud on the Company by its officers or employees has been noticed or reported during the year.
(xi) According to the information and explanations give 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, paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act where applicable and details of such transactions have been disclosed in the financial statements as required by the applicable Indian Accounting Standards.
(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 JAYANTILAL THAKKAR & CO.
Chartered Accountants
(Firm Reg. No. 104133W)
VIRAL A. MERCHANT
Mumbai Partner
Dated: 25th May, 2017 Membership No: 116279
Mar 31, 2016
We have audited the accompanying standalone financial statements of
Balkrishna Industries 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 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 of 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; 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.
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
thereunder.
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 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 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, and its profit 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,
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.
(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.
(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 31st March, 2016 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st 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; and
(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 of pending litigations on its
financial position in its financial statements - Refer Note No.31 (i)
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.
The Annexure referred to in Independent Auditors'' Report to the members
of the Company on the standalone financial statements for the year
ended 31 March 2016, we report that:
(i) (a) In our opinion, the Company has maintained proper records
showing full particulars including quantitative details and situation
of fixed assets.
(b) As explained to us, physical verification of these fixed assets is
being conducted in a phased programme by the management designed to
cover all the assets over a period of three to four years, which in our
opinion is reasonable having regard to the size of the Company and the
nature of assets. According to the information and explanations given
to us no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us and on
the basis of our examination of the records of the Company, the title
deeds of immovable properties are held in the name of the Company.
(ii) As explained to us physical verification of inventory has been
conducted at reasonable intervals by the management and discrepancies
noticed on such physical verification between physical stocks and book
records were not material considering the operations of the Company and
the same have been properly dealt with in the books of account.
(iii) In our opinion and according to the information and explanations
given to us, the Company has not granted any loans, secured or
unsecured, to any companies, firms, Limited Liability Partnerships or
other parties as covered in the register maintained under Section 189
of the Act. Accordingly, the provisions of clause 3(iii) (a), (b) and
(c) of the order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, the Company has complied with the provisions of section
185 and 186 of the Act, with respect to loans, investments and
guarantees made.
(v) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposit within the
meaning of Section 73 to 76 of the Act, and the rules framed
thereunder.
(vi) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government, the maintenance of cost records have been
prescribed under Section 148 (1) 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
the records with a view to determining whether they are accurate or
complete.
(vii) (a) According to the records of the Company and the information
and explanations given to us, the Company has generally been regularly
depositing with the appropriate authorities undisputed statutory dues
including Provident Fund, Employees'' State Insurance, Income tax,
Sales-Tax, Service tax, Duty of Customs, Duty of Excise, Value added
Tax, Cess and any other statutory dues applicable to it. There are no
undisputed statutory dues as referred to above as at 31st March, 2016
outstanding for a period of more than six months from the date they
become payable.
(b) According to the information and explanations given to us, the dues
in respect of Income Tax, Sales Tax, Duty of Customs, Excise Duty and
Service Tax that have not been deposited with the appropriate
authorities on account of dispute and the forum where the disputes are
pending are given below :-
Name of Statute Nature of Amount
Dues (Rs.)
Income Tax Act Income Tax 2,06,93,000
96,96,524
Sales Tax Act Sales Tax (Including
Interest and 2,91,35,121
Penalty) 16,35,76,622
2,58,000
Customs Act Custom Duty (Including
Interest) 38,32,88,504
3,00,12,300
Central Excise Excise Duty/ Service tax 11,56,50,945
And Service Tax (Including Interest
and Penalty) 44,98,15,667
Act
1,20,27,176
71,10,872
1,23,72,531
Name of Statute Period to which the Forum where dispute
Amount Relates is pending
Income Tax Act 2004-05 Supreme Court
Sales Tax Act 2006-07 ITAT
1999-2002 Tribunal
1996-97,1998-99 Commissioner (Appeals)
2002-2006,
2008-09_
Customs Act 2004-05 High Court
2012-2014 High Court
2012-2013 CESTAT
Central Excise 2003-2016 High Court
And Service Tax 2005-2015 Tribunal
Act 2007-2009 Commissioner (Appeals)
2010-2014
1994-1996 Assessing Authority
2012-2014 Joint Secretary
(viii) Based on our audit procedures and according to the information
and explanations given by the management, the Company has not defaulted
in repayment of loans from bank.
Further as per the records of the Company, during the year there were
no loans or borrowings from any financial institution, government or
debenture holders.
(ix) In our opinion and according to the information and the
explanations given to us, the term loans have been applied for the
purposes for which they were obtained. Further as per the records, the
Company did not raise any money by way of initial public offer or
further public offer (including debt instruments).
(x) Based upon the audit procedures performed and to the best of our
knowledge and belief and according to the information and explanations
given to us no fraud by the company or any fraud on the Company by its
officers or employees has been noticed or reported during the year.
(xi) According to the information and explanations give 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, paragraph
3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and
based on our examination of the records of the Company, transactions
with the related parties are in compliance with sections 177 and 188 of
the Act where applicable and details of such transactions have been
disclosed in the financial statements as required by the applicable
accounting standards.
(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 JAYANTILAL THAKKAR & CO.
Chartered Accountants
(Firm Reg. No. 104133W)
VIRAL A. MERCHANT
Mumbai Partner
Dated : 18th May, 2016 Membership No.116279
Mar 31, 2015
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of
Balkrishna Industries Limited ("the Company") which comprise the
Balance Sheet as at 31 March, 2015, 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 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 of 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; 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.
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
thereunder.
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 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 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, 2015, and its profit and its cash flows for the year
ended on that date.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor''s Report) Order, 2015 ("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.
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, and the Cash
flow statement dealt with by this Report are in agreement with the
books of account.
(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 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164(2) of the
Act.
(f) The company has adequate internal financial control and in our
opinion the same is operating effectively.
(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 of pending litigations on its
financial position in its financial statements - Refer Note No.32 (i)
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 TO INDEPENDENT AUDITORS'' REPORT
(Annexure referred to in paragraph 1 under the heading of ''Report on
Other Legal and Regulatory Requirements'' of our report of even
date.)
(i) (a) In our opinion, the Company has maintained proper records
showing full particulars including quantitative details and
situation of fixed assets.
(b) As explained to us, physical verification of these fixed assets is
being conducted in a phased programme by the management designed to
cover all the assets over a period of three to four years, which in our
opinion is reasonable having regard to the size of the Company and the
nature of assets. According to the information and explanations given
to us no material discrepancies were noticed on such verification.
(ii) (a) As explained to us, the inventories were physically verified
during the year by the management. 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 were 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 stocks and book records were not material considering
the operations of the Company and the same have been properly dealt
with in the books of account.
(iii) In our opinion and according to the information and explanations
given to us, the Company has not granted any loans, secured or
unsecured, to any companies, firms or other parties as covered in the
register maintained under Section 189 of the Act. Accordingly, the
provisions of clause 3(iii) (a) and (b) of the order are not
applicable.
(iv) In our opinion and according to the information and explanation
given to us, there are adequate internal control systems commensurate
with the size of the Company and the nature of its business with regard
to purchases of inventory and 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
systems.
(v) In our opinion and according to the information and explanations
given to us, the Company has not accepted any deposit within the
meaning of Section 73 to 76 of the Act, and the rules framed
thereunder.
(vi) We have broadly reviewed the books of account maintained by the
Company in respect of products where, pursuant to the Rules made by the
Central Government, the maintenance of cost records have been
prescribed under Section 148 (1) 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
the records with a view to determining whether they are accurate or
complete.
(Vii) (a) According to the records of the Company and the information
and explanations given to us, the Company has generally been regularly
depositing with the appropriate authorities undisputed statutory dues
including Provident Fund, Employees'' State Insurance, Income tax, Sales
Tax, Wealth tax, Service tax, Customs Duty, Excise Duty, Value added
Tax, Cess and any other statutory dues applicable to it. There are no
undisputed statutory dues as referred to above as at 31st March, 2015
outstanding for a period of more than six months from the date they
become payable.
(b) According to the information and explanations given to us, the dues
in respect of Sales Tax, Income Tax, Customs Duty, Excise Duty and
Service Tax that have not been deposited with the appropriate
authorities on account of dispute and the forum where the disputes are
pending are given below :-
Name of Statute Nature of Amount Period to Forum where
Dues ( Rs. ) which dispute
the is pending
Amount
Relates
Sales Tax Act Sales Tax 2,77,65,976 1999-2002 Tribunal
(Including
Interest 15,20,23,971 1996-97, Commissioner
and 1998-99
Penalty) 2002-2006, (Appeals)
2008-09
2,58,000 2004-05 High Court
Income Tax Act Income Tax 96,96,524 2006-07 ITAT
Customs Act Custom Duty 33,91,32,532 2012-2014 High Court
(Including
Interest)
Service Tax Service 4,30,761 2004-2006 High Court
Tax
(Including 16,27,645 2005-2007 Tribunal
Interest
and 25,33,196 2007-2009 Commissioner
Penalty) 2010-2012 (Appeals)
Central Excise Excise Duty 8,97,98,650 2003-2013 High Court
Act (Including 41,41,41,631 1994-2013 Tribunal
Interest
and
Penalty) 23,82,406 1999-2001 Commissioner
2010-2012 (Appeals)
67,52,793 1994-1996 Assessing
Authority
(c) The amount required to be transferred to Investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made thereunder has been
transferred to such fund within time.
(Viii) The Company neither has any accumulated losses at the end of the
financial year nor has incurred any cash losses during the financial
year covered by our audit and in the immediately preceding financial
year.
(ix) Based on our audit procedures and according to the information and
explanations given by the management, we are of the opinion that the
Company has not defaulted in repayment of dues to banks.
(x) In our opinion and according to the information and the
explanations given to us, the Company has not given any guarantee for
loans taken by others from banks or financial institutions.
(xi) In our opinion and according to the information and the
explanations given to us, the term loans have been applied for the
purposes for which they were obtained.
(xii) Based upon the audit procedures performed and to the best of our
knowledge and belief and according to the information and explanations
given to us no fraud on or by the Company has been noticed or reported
during the year.
FOR JAYANTILAL THAKKAR & CO.
Chartered Accountants
(Firm Reg. No. 104133W)
VIRAL A. MERCHANT
Mumbai Partner
Dated : 14th May, 2015 Membership No.116279
Mar 31, 2014
We have audited the accompanying financial statements of Balkrishna
Industries Limited ("the Company"), which comprise the Balance Sheet as
at March 31, 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 Standards referred to in sub-section (3C) of section 211
of the Companies Act, 1956 ("the Act") read with the General Circular
15/2013 dated 13th September 2013 of the Ministry of Corporate Affairs
in respect of section 133 of the Companies Act, 2013. 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 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 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 entity''s internal control. An audit also includes
evaluating the appropriateness of accounting policies used and the
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
explanations given to us, the 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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 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 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 subsection (3C) of section 211 of the Companies Act, 1956 read
with the General Circular 15/2013 dated 13th September 2013 of the
Ministry of Corporate Affairs in respect of section 133 of the
Companies Act, 2013;
e. on the basis of written representations received from the directors
as on March 31, 2014, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 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 INDEPENDENT AUDITORS'' REPORT
Referred to in paragraph 1 under the heading of "Report on Other Legal
and Regulatory Requirements" of our Report of even date
i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) As explained to us, physical verification of these fixed assets is
being conducted in a phased programme by the management designed to
cover all the assets over a period of three to four years, which in our
opinion is reasonable having regard to the size of the Company and the
nature of assets. According to the information and explanations given
to us no material discrepancies were noticed on such verification.
c) The fixed assets disposed off during the year, in our opinion, do
not constitute substantial part of the fixed assets of the Company and
such disposal has, in our opinion, not affected the going concern
status of the Company.
ii) a) As explained to us, the inventories were physically verified
during the year by the management. 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 were 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 stocks and book records were not material considering
the operations of the Company and the same have been properly dealt
with in the books of account.
iii) a) As per the information and explanations given to us, the
Company has granted unsecured loan to two of its subsidiaries, covered
in the register maintained under Section 301 of the Act, out of which
one of the company has refunded the loan in full. The maximum amount
involved during the year was Rs.11,82,92,690 and the year-end balance
of the loans granted was Rs. 5,59,25,000.
b) According to the information and explanations given to us, the rate
of interest and other terms and conditions of the loans, in our opinion
and having regard to the holding and subsidiary company relationship,
are not, prima facie, prejudicial to the interest of the Company.
c) In our opinion and as per the information and explanations given to
us, the Company was regular in receipt of the principal amounts
whenever demanded. The receipt of interest is regular.
d) As per the information and explanations given to us, the outstanding
amount of the loan given was not overdue.
e) The Company has not taken any loan, secured or unsecured, from any
party covered in the register maintained under Section 301 of the Act.
iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and nature of its business for the
purchase of inventory and fixed assets and for sale of goods. During
the course of audit, we have not observed any continuing failure to
correct major weaknesses in internal control system.
v) a) Based on the audit procedures applied by us and according to the
information and explanations given to us, we are of the opinion that
the particulars of contracts or arrangements referred to in Section 301
of the Act have been entered in the register required to be maintained
under that Section.
b) In our opinion and as per the information and explanations given to
us, the transactions made in pursuance of contracts or arrangements
entered in the register maintained under Section 301 of the Act and
exceeding the value of rupees five lakhs in respect of any party during
the year have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time.
vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted deposits in terms of the
provisions of Section 58A, 58AA and any other relevant provisions of
the Act and the rules framed there under.
vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
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 the records with a view to determine whether
they are accurate or complete.
ix) a) According to the information and explanations given to us and on
the basis of our examination of the 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, Service Tax, Custom
Duty, Excise Duty, Cess and other material statutory dues, to the
extent applicable, during the year with the appropriate authorities.
However, as at 31st March, 2014 there were no material undisputed dues
outstanding for a period of more than six months from the date they
became payable. During the year, the Company was not required to
deposit any dues in respect of Wealth Tax.
b) According to the information and explanations given to us, the dues
in respect of Sales Tax, Income Tax, Customs Duty,Excise Duty and
Service Tax that have not been deposited with the appropriate
authorities on account of dispute and the forum where the disputes are
pending are given below :-
Name of Statute Nature of Dues Amount Period to Forum where
( Rs. ) which the dispute is
Amount pending
Relates
Sales Tax Act Sales Tax
(Including
Interest and
Penalty) 2,63,96,831 1999-2002 Tribunal
14,04,71,320 1996-1997, Commissioner
1998-1999 (Appeals)
2002-2006
2008-2009
2,58,000 2004-2005 High Court
Income Tax Act Income Tax
(Including
Interest and
Penalty) 22,45,010 2007-2008 Assessing
Authority
Customs Act Custom Duty
(Including
Interest) 29,50,97,207 2012-2014 High Court
Central
Excise Act Excise Duty
and Service
Tax (Including 9,32,92,102 2002-2013 High Court
Interest and
Penalty)
86,11,11,765 2004-2013 Tribunal
36,29,994 1999-2001 Commissioner
2005-2007 (Appeals)
2010-2012
3,46,89,477 1994-2004 Assessing
Authority
As per the information given to us, there are no dues of Cess which
have not been deposited on account of any dispute. The Company is not
liable to pay Wealth Tax.
x) The Company does not have any accumulated losses at the end of the
current financial year and has not incurred cash losses during current
financial year and in the immediately preceding financial year.
xi) Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to banks.
xii) According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
xiii) In our opinion, the Company is not a chit fund/nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4 (xiii) of
the Order are not applicable to the Company.
xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments. Accordingly, the provisions of clause 4 (xiv) of the
Order are not applicable to the Company.
xv) In our opinion, and according to the information and explanations
given to us, the terms and conditions of the guarantee given by the
Company for a loan taken by another company covered in the register
maintained under Section 301 of the Act , from a bank during the year
is not prejudicial to the interest of the Company.
xvi) As per the information and explanations given to us, in our
opinion, the term loan has been applied for the purpose for which it
was obtained.
xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, in our
opinion, no funds raised on short-term basis have been used for
long-term investment.
xviii) 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.
xix) The Company has not issued any debentures during the year.
xx) During the year the Company has not raised funds by public issue.
Therefore, the provisions of clause 4 (xx) of the Order are not
applicable to the Company.
xxi) Based upon the audit procedures performed and to the best of our
knowledge and belief and according to the information and explanations
given to us, no fraud by the Company and no material fraud on the
Company has been noticed or reported during the year.
FOR JAYANTILAL THAKKAR & CO.
Chartered Accountants
( Firm Reg. No. 104133W )
VIRAL A.MERCHANT
Partner
Membership No. 116279
Mumbai,
Dated : 15th May, 2014
Mar 31, 2013
Report on the Financial Statements
We have audited the accompanying financial statements of BALKRISHNA
INDUSTRIES LIMITED ("the Company"), which comprise the Balance Sheet as
at March 31, 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 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 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 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. An audit also includes evaluating the appropriateness of
accounting policies used and the 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
explanations given to us, the 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:
(a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
(b) in the case of the Profit and Loss Account, 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 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 subsection (3C) of section 211 of the Companies Act, 1956;
e. on the basis of written representations received from the directors
as on March 31, 2013, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2013, 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 AUDITORS'' REPORT
Referred to in paragraph 1 under the heading of "Report on Other Legal
and Regulatory Requirements" of our Report of even date
i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) As explained to us, physical verification of these fixed assets is
being conducted in a phased programme by the management designed to
cover all the assets over a period of three to four years, which in our
opinion is reasonable having regard to the size of the Company and the
nature of assets. According to the information and explanations given
to us no material discrepancies were noticed on such verification.
c) The fixed assets disposed off during the year, in our opinion, do
not constitute substantial part of the fixed assets of the Company and
such disposal has, in our opinion, not affected the going concern
status of the Company.
ii) a) As explained to us, the inventories were physically verified
during the year by the management. 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 were 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 stocks and book records were not material considering
the operations of the Company and the same have been properly dealt
with in the books of account.
iii) a) As per the information and explanations given to us, the
Company has granted unsecured loan to four parties, covered in the
register maintained under Section 301 of the Act. The maximum amount
involved during the year was Rs.8,73,67,690 and the year-end balance of
the loans granted was Rs. 5,32,92,690.
b) According to the information and explanations given to us, the rate
of interest and other terms and conditions of the loans, including that
of not charging the interest to one of the subsidiaries for part of the
year, in our opinion and having regard to the holding and subsidiary
company relationship, are not, prima facie, prejudicial to the interest
of the Company.
c) In our opinion and as per the information and explanations given to
us, the Company was regular in receipt of the principal amounts
whenever demanded. However, no such demand has been made during the
year. The receipt of interest is regular wherever applicable.
d) As per the information and explanations given to us, the outstanding
amount of the loan given was not overdue.
e) The Company has not taken any loan, secured or unsecured, from any
party covered in the register maintained under Section 301 of the Act.
iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and nature of its business for the
purchase of inventory and fixed assets and for sale of goods. During
the course of audit, we have not observed any continuing failure to
correct major weaknesses in internal control system.
v) a) Based on the audit procedures applied by us and according to the
information and explanations given to us, we are of the opinion that
the particulars of contracts or arrangements referred to in Section 301
of the Act have been entered in the register required to be maintained
under that Section.
b) In our opinion and as per the information and explanations given to
us, the transactions made in pursuance of contracts or arrangements
entered in the register maintained under Section 301 of the Act and
exceeding the value of rupees five lakhs in respect of any party during
the year have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time.
vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted deposits in terms of the
provisions of Section 58A, 58AA and any other relevant provisions of
the Act and the rules framed there under.
vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
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 the records with a view to determine whether
they are accurate or complete.
ix) a) According to the information and explanations given to us and on
the basis of our examination of the 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, Service Tax, Custom
Duty, Excise Duty, Cess and other material statutory dues, to the
extent applicable, during the year with the appropriate authorities.
However, as at 31st March, 2013 there were no undisputed dues
outstanding for a period of more than six months from the date they
became payable. During the year, the Company was not required to
deposit any dues in respect of Wealth Tax.
b) According to the information and explanations given to us, the dues
in respect of Income Tax, Sales Tax, Excise Duty and Service Tax that
have not been deposited with the appropriate authorities on account of
dispute and the forum where the disputes are pending are given below :-
Name of Statute Nature of Dues Amount
(Rs.)
Income Tax Act Income Tax 1,00,25,596
(Including Interest and Penalty)
22,45,010
Sales Tax Act Sales Tax 2,58,000
(Including Interest and Penalty)
2,50,27,686
1,85,23,573
11,33,34,025
Central Excise Act Excise Duty and Service Tax 1,96,97,355
(Including Interest and Penalty)
1,19,98,196
26,21,878
3,05,83,276
Name of Statute Period to which the Forum where dispute
Amount Relates is pending
Income Tax Act 2004-2005 Commissioner (Appeals)
2007-2008 Assessing Authority
Sales Tax Act 2004-2005 High Court
1999-2002 Tribunal
1996-1999, Commissioner
2002-2006 (Appeals)
2008-2009 Assessing Authority
Central Excise Act 2002-2006 High Court
2004-2010 Tribunal
1999-2001, Commissioner
2005-2007, (Appeals)
2010-2013
1994-2004 Assessing Authority
As per the information given to us, there are no dues of Custom Duty or
Cess which have not been deposited on account of any dispute. The
Company is not liable to pay Wealth Tax.
x) The Company does not have any accumulated losses at the end of the
current financial year and has not incurred cash losses during current
financial year and in the immediately preceding financial year.
xi) Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to banks.
xii) According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
xiii) In our opinion, the Company is not a chit fund/nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4 (xiii) of
the Order are not applicable to the Company.
xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments. Accordingly, the provisions of clause 4 (xiv) of the
Order are not applicable to the Company.
xv) In our opinion, and according to the information and explanations
given to us, the terms and conditions of the guarantee given by the
Company for a loan taken by another company covered in the register
maintained under Section 301 of the Act, from a bank during the year is
not prejudicial to the interest of the Company.
xvi) As per the information and explanations given to us, in our
opinion, the term loan has been applied for the purpose for which it
was obtained.
xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, in our
opinion, no funds raised on short-term basis have been used for
long-term investment.
xviii) 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.
xix) The Company has not issued any debentures during the year.
xx) During the year the Company has not raised funds by public issue.
Therefore, the provisions of clause 4 (xx) of the Order are not
applicable to the Company.
xxi) Based upon the audit procedures performed and to the best of our
knowledge and belief and according to the information and explanations
given to us, no fraud on or by the Company has been noticed or reported
during the year.
FOR JAYANTILAL THAKKAR & CO.
Chartered Accountants
(Firm Reg. No. 104133W)
VIRAL A.MERCHANT
Partner
Membership No. 116279
Mumbai,
Dated : 30th May, 2013
Mar 31, 2012
1. We have audited the attached Balance Sheet of BALKRISHNA INDUSTRIES
LIMITED, as at 31st March, 2012 and also the Statement of Profit and
Loss and the Cash Flow Statement for the year ended on that date
annexed thereto. 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.
2. We 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.
3. 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 Companies Act, 1956, ('the
Act'), we enclose in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the said Order.
4. 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 purposes of our
audit;
ii) In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination ofthose
books;
iii) 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;
iv) In our opinion, the Balance Sheet, Statement of Profit and Loss and
Cash Flow Statement dealt with by this report comply with the
accounting standards referred to in sub-section (3C) of Section 211of
the Act;
v) On the basis of written representations received from the directors,
as on 31st March, 2012 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2012 from being appointed as a director in terms ofclause (g) of
sub-section (1) ofSection 274 oftheAct;
vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, read together with the
Accounting Policies and Notes to Accounts, 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 :
a. in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st 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 Cash Flow Statement, of the cash flows for the year
ended on that date.
Referred to in paragraph 3 ofour Report of even date on the accounts of
Balkrishna Industries Limited for the year ended 31st March, 2012.
i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) As explained to us, physical verification of these fixed assets is
being conducted in a phased programme by the management designed to
cover all the assets over a period of three years, which in our opinion
is reasonable having regard to the size of the Company and the nature
of assets. According to the information and explanations given to us no
material discrepancies were noticed on such verification.
c) The fixed assets disposed off during the year, in our opinion, do
not constitute substantial part of the fixed assets of the Company and
such disposal has, in our opinion, not affected the going concern
status of the Company.
ii) a) As explained to us, the inventories were physically verified
during the year by the management. 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 were 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 stocks and book records were not material considering
the operations of the Company and the same have been properly dealt
with in the books ofaccount.
iii) a) As per the information and explanations given to us, the
Company has granted unsecured loan to two parties, which are wholly
owned subsidiaries, covered in the register maintained under Section
301 of the Act. The maximum amount involved during the year was
Rs.5,73,67,690 and the year-end balance of the loans granted was Rs.
5,73,67,690.
b) According to the information and explanations given to us, the rate
of interest and other terms and conditions of the loans, including that
of not charging the interest to one of the subsidiaries, in our opinion
and having regard to the holding and subsidiary company relationship,
are not, prima facie, prejudicial to the interest ofthe Company.
c) In our opinion and as per the information and explanations given to
us, the Company was regular in receipt of the principal amounts
whenever demanded. However, no such demand has been made during the
year. The receipt of interest is regular wherever applicable.
d) As per the information and explanations given to us, the outstanding
amount ofthe loan given was not overdue.
e) The Company has not taken any loan, secured or unsecured, from any
party covered in the register maintained under Section 301 of the Act.
iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and nature of its business for the
purchase of inventory and fixed assets and for sale of goods. During
the course of audit, we have not observed any continuing failure to
correct major weaknesses in internal control system.
v) a) Based on the audit procedures applied by us and according to the
information and explanations given to us, we are of the opinion that
the particulars of contracts or arrangements referred to in Section 301
of the Act have been entered in the register required to be maintained
under that Section.
b) In our opinion and as per the information and explanations given to
us, the transactions made in pursuance of contracts or arrangements
entered in the register maintained under Section 301 of the Act and
exceeding the value of rupees five lakhs in respect of any party during
the year have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time.
vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted deposits in terms of the
provisions of Section 58A, 58AA and any other relevant provisions ofthe
Act and the rules framed there under.
vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
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 the records with a view to determine whether
they are accurate or complete.
ix) a) According to the information and explanations given to us and on
the basis of our examination of the books of account, the Company has
been generally regular in depositing undisputed statutorydues including
Provident Fund, Investor Education and Protection Fund, Employees'
State Insurance, Income Tax, Sales Tax, Service Tax, Custom Duty,
Excise Duty, Cess and other material statutory dues, to the extent
applicable, during the year with the appropriate authorities. However,
as at 31st March, 2012 there were no undisputed dues outstanding for a
period of more than six months from the date they became payable.
During the year, the Companywas not required to deposit any dues in
respect ofWealth Tax.
b) According to the information and explanations given to us, the dues
in respect of Income Tax, Sales Tax and Excise Duty that have not been
deposited with the appropriate authorities on account of dispute and
the forum where the disputes are pending are given below
Name of
Statute Nature of Amount Period to
which Forum where
dispute is
Dues (Rs.) the Amount pending
Relates
Income
Tax Act Income Tax
(Including 1,89,96,605 2004-2005, Commissioner
Interest and
Penalty) 2006-2007 (Appeals)
22,45,010 2007-2008 Assessing
Authority
Sales Tax
Acts Sales Tax
(Including 2,58,000 2004-2005 High Court
Interest and
Penalty) 2,49,27,822 1997-1998, Tribunal
1999-2002
1,87,85,609 1996-1999, Commissioner
2002-2006 (Appeals)
Central
Excise Act Excise Duty
(Including 19,55,781 2002-2006 High Court
Interest and
Penalty)
4,22,58,567 2003-2011 Tribunal
61,72,318 1999-2001 Commissioner
2005-2011 (Appeals)
2,90,37,036 1994-2004 Assessing
Authority
As per the information given to us, there are no dues of Service Tax,
Custom Duty or Cess, which have not been deposited on account of any
dispute. The Company is not liable to pay Wealth Tax.
x) The Company does not have any accumulated losses at the end of the
current financial year and has not incurred cash losses during current
financial year and in the immediately preceding financial year.
xi) Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment ofdues to banks.
xii) According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
xiii) In our opinion, the Company is not a chit fund/nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4 (xiii) of
the Order are not applicable to the Company.
xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments. Accordingly, the provisions of clause 4 (xiv) of the
Order are not applicable to the Company.
xv) In our opinion, and according to the information and explanations
given to us, the terms and conditions of the guarantee given by the
Company for a loan taken by another company covered in the register
maintained under Section 301 of the Act, from a bank during the year is
not prejudicial to the interest of the Company.
xvi) As per the information and explanations given to us, in our
opinion, the term loan has been applied for the purpose for which it
was obtained.
xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, in our
opinion, no funds raised on short-term basis have been used for
long-term investment.
xviii) 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.
xix) The Company has not issued any debentures during the year.
xx) During the year the Company has not raised funds by public issue.
Therefore, the provisions of clause 4 (xx) of the Order are not
applicable to the Company.
xxi) Based upon the audit procedures performed and to the best of our
knowledge and belief and according to the information and explanations
given to us, no fraud on or by the Company has been noticed or reported
during the year.
FOR JAYANTILAL THAKKAR & CO.
Chartered Accountants
(Firm Reg. No. 104133W)
VIRAL A. MERCHANT
Partner
Membership No. 116279
Mumbai,
Dated : 30thMay,2012
Mar 31, 2011
1. We have audited the attached Balance Sheet of BALKRISHNA INDUSTRIES
LIMITED, as at 31st March, 2011 and also the Profit and Loss Account
and the Cash Flow Statement for the year ended on that date annexed
thereto. 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.
2. We 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.
3. As required by the Companies ( Auditors Report ) Order, 2003 (
the Order ) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, ( the Act
), we enclose in the Annexure a statement on the matters specified in
paragraphs 4 and 5 of the said Order.
4. 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 purposes of our
audit;
ii) 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;
iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Act;
v) On the basis of written representations received from the directors,
as on 31 st March, 2011 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31 st March,
2011 from being appointed as a director in terms of clause (g) of sub-
section (1) of Section 274 of the Act;
vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, read together with the
Accounting Policies and Notes to Accounts, appearing in Schedule R to
the accounts, 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 :
a. in the case of the Balance Sheet, of the state of affairs of the
Company as at 31st March, 2011;
b. in the case of the Profit and Loss Account, of the PROFIT for the
year ended on that date; and
c. in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
Annexure to the Auditors Report
Referred to in paragraph 3 of our Report of even date on the accounts
of Balkrishna Industries Limited for the year ended 31st March, 2011.
i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) As explained to us, physical verification of these fixed assets is
being conducted in a phased programme by the management designed to
cover all the assets over a period of three years, which in our opinion
is reasonable having regard to the size of the Company and the nature
of assets. According to the information and explanations given to us no
material discrepancies were noticed on such verification.
c) The fixed assets disposed off during the year, in our opinion, do
not constitute substantial part of the fixed assets of the Company and
such disposal has, in our opinion, not affected the going concern
status of the Company.
ii) a) As explained to us, the inventories were physically verified
during the year at intervals by the management. The goods in the
possession of third parties as on 31st March, 2011 have been verified
by the management with
reference to the confirmation obtained from the third parties. 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 were 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 stocks and book records were not material considering
the operations of the Company and the same have been properly dealt
with in the books of account.
iii) a) As per the information and explanations given to us, the
Company in earlier year had granted unsecured loan to one party, a
wholly owned subsidiary, covered in the register maintained under
Section 301 of the Act. The maximum amount involved during the year was
Rs.1,23,67,690 and the year-end balance of the loan granted was Rs.
1,23,67,690.
b) According to the information and explanations given to us, the terms
and conditions of the loans, including that of not charging the
interest to the subsidiary, in our opinion and having regard to the
holding and subsidiary company relationship, are not, prima facie,
prejudicial to the interest of the Company.
c) In our opinion and as per the information and explanations given to
us, the Company was regular in receipt of the principal amounts
whenever demanded. However ,no such demand has been made during the
year. Since the loan was interest free the question of receipt of
interest does not arise.
d) As per the information and explanations given to us, the outstanding
amount of the loan given was not overdue.
e) The Company has not taken any loan, secured or unsecured, from any
party covered in the register maintained under Section 301 of the Act.
iv) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and nature of its business for the
purchase of inventory and fixed assets and for sale of goods. During
the course of audit, we have not observed any continuing failure to
correct major weaknesses in internal control system.
v) a) Based on the audit procedures applied by us and according to the
information and explanations given to us, we are of the opinion that
the particulars of contracts or arrangements referred to in Section 301
of the Act have been entered in the register required to be maintained
under that Section.
b) In our opinion and as per the information and explanations given to
us, the transactions made in pursuance of contracts or arrangements
entered in the register maintained under Section 301 of the Act and
exceeding the value of rupees five lakhs in respect of any party during
the year have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time.
vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted deposits in terms of the
provisions of Section 58A, 58AA and any other relevant provisions of
the Act and the rules framed there under.
vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
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 the records with a view to determine whether
they are accurate or complete.
ix) a) According to the information and explanations given to us and on
the basis of our examination of the 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, Service Tax, Custom
Duty, Excise Duty, Cess and other material statutory dues, to the
extent applicable, during the year with the appropriate authorities
though there have been delays in few cases. However, as at 31st March,
2011 there were no undisputed dues outstanding for a period of more
than six months from the date they became payable. During the year, the
Company was not required to deposit any dues in respect of Wealth Tax.
b) According to the information and explanations given to us, the dues
in respect of Income Tax, Sales Tax and Excise Duty that have not been
deposited with the appropriate authorities on account of dispute and
the forum where the disputes are pending are given below:- i
Name of Statute Nature ofDues Amount( Rs.)
Income Tax Act Income Tax 20,95,155
(Including Interest 3,85,06,349
and Penalty)
52,24,035
Sales Tax Act Sales Tax 2,58,000
(Including Interest 2,36,24,899
and Penalty) 1,49,63,925
Central Excise Act Excise Duty 14,02,970
(Including Interest 79,88,062
and Penalty) 3,46,67,873
1,11,03,180
2,21,70,315
Name of Statute Period to which the Forum where dispute
Amount Relates is pending
Income Tax Act 2002-03 Tribunal
2004-05 Commissioner
2007-08 (Appeals)
2003-04 Assessing Authority
2007-08
Sales Tax Act 2004-05 High Court
1996-1998 Tribunal
1999-2002
1997-1999 Commissioner (Appeals)
2002-2005
Central Excise Act 2002-06 High Court
2006-07 Govt. of India,
Ministry of Finance,
Department of
Revenue (Revision)
2003-2009 Tribunal
1994-1996 Commissioner
1999-2001 (Appeals)
2005-2010
1994-2004 Assessing Authority
As per the information given to us, there are no dues of Service Tax,
Custom Duty or Cess, which have not been deposited on account of any
dispute. The Company is not liable to pay Wealth Tax.
x) The Company does not have any accumulated losses at the end of the
current financial year and has not incurred cash losses during current
financial year and in the immediately preceding financial year.
xi) Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to banks or bond holders.
xii) According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
xiii) In our opinion, the Company is not a chit fund/nidhi/mutual
benefit fund/society. Therefore, the provisions of clause 4 (xiii) of
the Order are not applicable to the Company.
xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments. Accordingly, the provisions of clause 4 (xiv) of the
Order are not applicable to the Company.
xv) As per the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from bank or
financial institutions.
xvi) As per the information and explanations given to us, in our
opinion, the term loan has been applied for the purpose for which it
was obtained.
xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, in our
opinion, no funds raised on short-term basis have been used for
long-term investment.
xviii) 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.
xix) The Company has not issued any debentures during the year.
xx) During the year the Company has not raised funds by public issue.
Therefore, the provisions of clause 4 (xx) of the Order are not
applicable to the Company.
xxi) Based upon the audit procedures performed and to the best of our
knowledge and belief and according to the information and explanations
given to us, no fraud on or by the Company has been noticed or reported
during the year.
For Jayantilal Thakkar & Co.
Chartered Accountants
( Firm Reg. No. 104133W )
ASHOK J. THAKKAR
Mumbai, Partner
Dated : 20th May, 2011 Membership No. 007860
Mar 31, 2010
1. We have audited the attached Balance Sheet of BALKRISHNA INDUSTRIES
LIMITED, as at 31st March, 2010 and also the Profit and Loss Account
and the Cash Flow Statement for the year ended on that date annexed
thereto. These financial statements are the responsibility of the
CompanyÃs management. Our responsibility is to express an opinion on
these financial statements based on our audit.
2. We 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.
3. As required by the Companies (AuditorÃs Report) Order, 2003 (Ãthe
OrderÃ) issued by the Central Government of India in terms of
sub-section (4A) of Section 227 of the Companies Act, 1956, (Ãthe
ActÃ), we enclose in the Annexure a statement on the matters specified
in paragraphs 4 and 5 of the said Order.
4. 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 purposes of our
audit;
ii) 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;
iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement
dealt with by this report are in agreement with the books of account;
iv) In our opinion, the Balance Sheet, Profit and Loss Account and Cash
Flow Statement dealt with by this report comply with the accounting
standards referred to in sub-section (3C) of Section 211 of the Act;
v) On the basis of written representations received from the directors,
as on 31st March, 2010 and taken on record by the Board of Directors,
we report that none of the directors is disqualified as on 31st March,
2010 from being appointed as a director in terms of clause (g) of
sub-section (1) of Section 274 of the Act;
vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, read together with the
Accounting Policies and Notes to Accounts, appearing in Schedule ÃRÃ to
the accounts, 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:
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 PROFIT for the
year ended on that date; and
c. in the case of Cash Flow Statement, of the cash flows for the year
ended on that date.
Annexure to the Auditorsà Report
Referred to in paragraph 3 of our Report of even date on the accounts
of Balkrishna Industries Limited for the year ended 31st March, 2010.
i) a) The Company has maintained proper records showing full
particulars, including quantitative details and situation of fixed
assets.
b) As explained to us, physical verification of these fixed assets is
being conducted in a phased programme by the management designed to
cover all the assets over a period of three years, which in our opinion
is reasonable having regard to the size of the Company and the nature
of assets. According to the information and explanations given to us
no material discrepancies were noticed on such verification.
c) The fixed assets disposed off during the year, in our opinion, do
not constitute substantial part of the fixed assets of the Company and
such disposal has, in our opinion, not affected the going concern
status of the Company.
ii) a) As explained to us, the inventories were physically verified
during the year at intervals by the management. The goods in the
possession of third parties as on 31st March, 2010 have been verified
by the management with reference to the confirmation obtained from the
third parties. 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 were 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 stocks and book records were not material considering
the operations of the Company and the same have been properly dealt
with in the books of account.
iii) a) As per the information and explanations given to us, the Company
has granted unsecured loan to one party, a wholly owned subsidiary,
covered in the register maintained under Section 301 of the Act. The
maximum amount involved during the year was Rs.1,68,67,690 and the
year-end balance of the loan granted was Rs. 1,23,67,690.
b) According to the information and explanations given to us, the terms
and conditions of the loans, including that of not charging the
interest to the subsidiary, in our opinion and having regard to the
holding and subsidiary company relationship, are not, prima facie,
prejudicial to the interest of the Company.
c) As per the information and explanations given to us and in our
opinion, the receipt of the principal amount was regular.
d) As per the information and explanations given to us, the outstanding
amount of the loan given was not overdue.
e) As per the information and explanations given to us, the Company has
taken unsecured loans from one party, a wholly owned subsidiary,
covered in the register maintained under Section 301 of the Act. The
maximum amount involved during the year was Rs. 8,50,00,000 and the
year-end balance of loans taken was Rs. NIL.
f) In our opinion and as per the information and explanations given to
us, the rate of interest and other terms and conditions of such loans
taken by the Company were not, prima facie, prejudicial to the interest
of the Company.
g) In our opinion and as per the information and explanations given to
us, the Company was regular in repaying the principal amount as
stipulated and was regular in payment of interest.
v) In our opinion and according to the information and explanations
given to us, there is an adequate internal control system commensurate
with the size of the Company and nature of its business for the
purchase of inventory and fixed assets and for sale of goods. During
the course of audit, we have not observed any
continuing failure to correct major weaknesses in internal control
system.
v) a) Based on the audit procedures applied by us and according to the
information and explanations given to us, we are of the opinion that
the particulars of contracts or arrangements referred to in Section 301
of the Act have been entered in the register required to be maintained
under that Section.
b) In our opinion and as per the information and explanations given to
us, the transactions made in pursuance of contracts or arrangements
entered in the register maintained under section 301 of the Act and
exceeding the value of rupees five lakhs in respect of any party during
the year have been made at prices which are reasonable having regard to
prevailing market prices at the relevant time except the interest free
loan granted by the Company to one of its subsidiaries.
vi) In our opinion and according to the information and explanations
given to us, the Company has not accepted deposits in terms of the
provisions of Section 58A, 58AA and any other relevant provisions of
the Act and the rules framed there under.
vii) In our opinion, the Company has an internal audit system
commensurate with its size and nature of its business.
viii) We have broadly reviewed the books of account maintained by the
Company pursuant to the Rules made by the Central Government for the
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 the records with a view to determine whether
they are accurate or complete.
ix) a) According to the information and explanations given to us and on
the basis of our examination of the books of account, the Company has
been generally regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employeesà State Insurance, Income Tax, Sales Tax, Service Tax, Custom
Duty, Excise Duty, Cess and other material statutory dues, to the
extent applicable, during the year with the appropriate authorities
though there have been delays in few cases. However, as at 31st March,
2010 there were no undisputed dues outstanding for a period of more
than six months from the date they became payable. During the year, the
Company was not required to deposit any dues in respect of Wealth Tax.
b) According to the information and explanations given to us, the dues
in respect of Income Tax,
As per the information given to us, there are no dues of Custom Duty or
Cess, which have not been deposited on account of any dispute. The
Company is not liable to pay Wealth Tax.
x) The Company does not have any accumulated losses at the end of the
current financial year and has not incurred cash losses during current
financial year and in the immediately preceding financial year.
xi) Based on our audit procedures and according to the information and
explanations given to us, we are of the opinion that the Company has
not defaulted in repayment of dues to banks.
xii) According to the information and explanations given to us, the
Company has not granted loans and advances on the basis of security by
way of pledge of shares, debentures and other securities.
xiii) In our opinion, the Company is not a chit fund/nidhi/ mutual
benefit fund/society. Therefore, the provisions of clause 4 (xiii) of
the Order are not applicable to the Company.
xiv) According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other investments. Accordingly, the provisions of clause 4 (xiv) of
the Order are not applicable to the Company.
xv) As per the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from bank or
financial institutions.
xvi) As per the information and explanations given to us, in our
opinion, the term loan has been applied for the purpose for which it
was obtained.
xvii) According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, in our
opinion, no funds raised on short-term basis have been used for
long-term investment.
xviii) 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.
xix) The Company has not issued any debentures during the year.
xx) During the year the Company has not raised funds by public issue.
Therefore, the provisions of clause 4 (xx) of the Order are not
applicable to the Company.
xxi) Based upon the audit procedures performed and to the best of our
knowledge and belief and according to the information and explanations
given to us, no fraud on or by the Company has been noticed or reported
during the year.
FOR JAYANTILAL THAKKAR & CO.
Chartered Accountants
(ICAI Reg. No. 104133W)
ASHOK J. THAKKAR
Mumbai,
Partner
Dated : 29th May, 2010
Membership No. 7860