We have audited the accompanying financial statements of Balmer Lawrie
& Co 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, in which are
incorporated the accounts of the Regions audited by Branch Auditors in
accordance with the letter of appointment issued by the Comptroller and
Auditor General of India.
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 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.
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.
Emphasis of Matter
We draw attention to:
1. Note No. 26.31 : Change in depreciation rates on items given under
furniture equipment scheme of employees and the effect of such revision
resulted in reduction of current year profit by Rs 13,84,868/-
2. Note No. 26.29 : Change in Inventory valuation of semi finished
goods and finished goods in respect of Industrial Packing Division
consequent to implementation of SAP and impact of such change on the
profit is not ascertainable.
Our opinion is not qualified in respect of above matters.
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
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) as amended 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
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
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
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
d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
sub section (3C) of section 211 of the
Companies Act, 1956 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) Since the Company is a Government Company, the provIsions of the
Section 274(1)(g) of the Act relating to disqualifications of directors
are not applicable, vide Government of India, Department of Company
Affairs Notification No. GSR 829(E) dated 21st October, 2003.
f) Since the Central Government has not issued any notification as to
the rate at which the cess is to be paid under section 441A of the
Companies Act, 1956 nor has it issued any Rules under the said section,
prescribing the manner in which such cess is to be paid, no cess is due
and payable by the Company.
The Annexure referred to in our report to the members of Balmer Lawrie
& Co Ltd (the Company) on the accounts of the Company for the year
ended 31 March, 2014. We report that:
(i) a. The company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
b. The company has a regular programme of physical verification of its
fixed assets by which Plant and Machinery are verified every year and
other fixed assets are verified in a phased manner over a period of
three years which, in our opinion, is reasonable having regard to the
size of the company and nature of its assets. As explained to us, in
accordance with its programme plant and machinery and certain other
fixed assets were verified during the year and no material
discrepancies were noticed on such verification.
c. In our opinion and according to the information and explanations
given to us, the Company has not disposed off a substantial part of the
fixed assets during the year, and therefore, does not affect the going
(ii) a. The inventory of the Company has been physically verified
during the year by the management. In our opinion, having regard to the
nature and location of inventory, the frequency of verification is
b. In our opinion, the procedures of physical verification of
inventories followed by the management are reasonable and adequate in
relation to the size of the company and the nature of its business.
c. On the basis of our examination of records of inventory, in our
opinion, the company is maintaining proper records of inventory and no
material discrepancies were noticed on physical verification.
(iii) As represented to us, there are no companies, firms, or other
parties to be listed in the register maintained under Section 301 of
the Companies Act, 1956. Consequently, requirement of clauses (iii)(a)
to (iii)(g) of paragraph 4 of the Order are not applicable.
(iv) In our opinion and according to the information and explanations
given to us, having regard to the explanations that certain items
purchased are of special nature and for which suitable alternative
sources are not readily available for obtaining comparative quotations,
there are adequate internal control system commensurate with the size
of the company and the nature of its business with regard to purchase
of inventories, fixed assets and for the sales of goods and services.
Further on the basis of our examination and according to the
information and explanations given to us, we have neither come across
nor have been informed of any instance of major weaknesses in such
internal control. The company has taken steps to strengthen the
internal control system regarding management of debtors and is in the
process of further strengthening the same. During the year the Company
has implemented SAP system in phase wise manner for accounting and
(v) In view of our comment in paragraph (iii) above, clauses (v)(a) and
(v)(b) of paragraph 4 of the Order in respect of contracts or
arrangements referred to in Section 301 of the Companies Act, 1956, and
transactions made in pursuance of such contracts or arrangements
exceeding the value of Rs 5 lacs in respect of any party, are not
applicable to the company.
(vi) The Company has not accepted any deposits from the public within
the meaning of the Sections 58A and 58AA the Companies Act, 1956 and
the Rules framed there under.
(vii) In our opinion, the Company''s present internal audit system as
conducted in phased manner, by a firm of Chartered Accountants, is
commensurate with its size and nature of its business.
(viii) We have broadly reviewed the books of account maintained by the
Company in respect of the products of Grease and Lubricants, Industrial
Packaging & Performance Chemical where, pursuant to the Rules made by
the Central Government of India, the maintenance of cost records has
been prescribed under Section 209(1) (d) of the Companies Act, 1956,
and are of the opinion that prima facie, the prescribed accounts and
records have been made and
maintained. We have, however, not made a detailed examination of such
records with a view to determine whether they are accurate or complete.
To the best of our knowledge and according to the information and
explanations given to us, the Central Government under the aforesaid
Act has not prescribed the maintenance of cost records for any other
products or services of the Company.
(ix) According to the information and explanations given to us and the
records of the Company examined by us:
a) The Company is generally regular in depositing with the appropriate
authorities undisputed statutory dues including Provident Fund
Employees State Insurance, Income Tax, Sales Tax, Wealth Tax, Service
Tax, Customs Duty and Excise Duty, Cess and any other material
statutory dues applicable to the Company.
b) There were no undisputed amounts payable in respect of Provident
Fund, Investor Education and Protection Fund, Income Tax, Sales Tax,
Wealth Tax, Service Tax and other material statutory dues in arrears as
at 31st March, 2014 for a period of more than 6 months from the date
they became payable.
c) The particulars of dues of Income Tax, Sales Tax, Service Tax,
Excise Duty and Cess as at 31st March, 2014 aggregating to Rs 18972.80
Lacs which have not been deposited on account of a dispute, as
mentioned in Note no. 26.2(a) to the Accounts showing the amounts
involved and the forum where dispute is pending.
(x) The Company has no accumulated losses as at 31st March, 2014 and it
has not incurred cash losses during the financial year ending 31st
March, 2014 and immediately preceding financial year.
(xi) According to the records of the Company examined by us and the
information and explanations given to us, we are of the opinion that
the Company has not defaulted in repayment of dues to any financial
institutions, banks or debenture holders as at the Balance Sheet date.
(xii) According to the information and explanations given to us and
based on the documents and records produced to us, the Company has
maintained adequate documents and records in respect of loans and
advances granted to a
party on the basis of security by way of pledge of shares.
(xiii) In our opinion, the Company is not a chit fund or a nidhi mutual
benefit fund/society. Therefore, the provisions of clause (xiii) of
paragraph 4 of the Order are not applicable to the Company.
(xiv) In our opinion and according to the information and explanations
given to us, the Company is not dealing in or trading in shares,
securities, debentures and other investments. Accordingly, the
provisions of clause (xiv) of paragraph 4 of the Order are not
applicable to the Company.
(xv) In our opinion and according to the information and explanations
given to us, the Company has not given any guarantee for loans taken by
others from bank or financial institutions.
(xvi) According to the information and explanations given to us, the
Company has not taken any term loan during the year.
(xvii) On an overall examination of the Balance Sheet of the Company,
in our opinion and according to the information and explanations given
to us, there are no funds raised on short-term basis which have been
used for long term investment during the year.
(xviii) The Company has not made any preferential allotment of shares
to parties or companies covered in the register maintained under
Section 301 of the Companies Act, 1956.
(xix) The Company has not issued any debentures during the year and
therefore no amount is outstanding in respect of debentures as on the
Balance Sheet date.
(xx) The Company has not raised any money by public issues during the
(xxi) During the course of our audit, and according to the information
and explanations given to us, we have neither come across any instance
of fraud on or by the Company nor reported during the year, nor have we
been informed of such case by the management.
For VIDYA & co.
CA Sarad Jha
Membership No.: 050138
Place : Kolkata
Date: 29th May, 2014