Report on the financial statements
We have audited the accompanying financial statements of M/s BAL PHARMA
LIMITED, which comprise the balance sheet as at 31 March 2013, and the
statement of profit and loss and cash flow statement for the year then
ended, and a summary of significant accounting policies and other
Management''s responsibility for the financial statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flows of the company in accordance with
the accounting principles generally accepted in India, including
Accounting standards referred to in sub-section (3C) of section 21 I of
the Companies Act, 1956 (the Act). This responsibility includes the
design, implementation and maintenance of internal control relevant to
the preparation and presentation of the financial statements that ge a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the standards on auditing issued by the Institute of Chartered
Accountants of India. Those standards require that we comply with
ethical requirements and plan and perform the audit to obtain
reasonable assurance whether the financial statements are free from
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor''s judgement, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the company''s preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the company''s
internal control. An audit also includes evaluating the appropriateness
of accounting policies used and reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
In our opinion and to the best of our information and according to the
explanation gK,en to us, the financial statements ge the information
required by the Act in the manner so required and give a true and fair
view in conformity with the accounting principles generally accepted in
(a) in the case of the balance sheet, of the state of affairs of the
company as at 3 I March 2013;
(b) in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
(c) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditor''s Report) Order, 2003 (the
Order) issued by the Central Government of India in terms of
sub-section (4A) of section 227 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 4 and 5 of the Order.
2. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
(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
(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 21 I of the Companies Act, 1956.
(e) On the basis of written representation received from the directors,
as on 31 March 2013 and taken on record by Board of Directors, we
report that none of the directors is disqualified as on 3 I March 2013
from being appointed as a director in terms of clause (g) of
sub-section (I) of section 274 of the Companies Act, 1956.
ANNEXURE TO THE AUDITOR''S REPORT
The Annexure referred to in paragraph I under the heading
Report on other legal and regulatory requirements of the auditor''s
report of Bal Pharma Limited for the year ended 31 March 2013
1. The Company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets. These
fixed assets were physically verified by management according to a
phased programme designed to cover all items over a period of three
years. Pursuant to the programme, physical verification of certain
assets was carried out during the year and we have been informed that
no material discrepancies were noticed on such physical verification.
Substantial part of fixed assets have not been disposed off during the
year, which will affect its status as going concern.
2. The stock of inventory has been physically verified during the year
by the management at reasonable intervals. In our opinion, the
procedures of physical verification of inventory, followed by the
management is reasonable and adequate in relation to the size of the
Company and the nature of its business. The Company is maintaining
proper records of inventory. The discrepancies noticed during the
physical verification of stocks as compared to book records were not
material; however, the same has been properly dealt with in the books
3. (a) According to the information and explanations given to us, the
company has not granted any loans to companies, firms or other parties
covered in the register maintained under Section 301 of the Companies
Act, 1956. According, the provisions of Clause 4(iii)(a) to (d) of the
order are not applicable to the Company and hence not commented upon.
(b) The Company has taken interest free unsecured loans, from
companies, firms or other parties covered in the register maintained
under section 301 of the Companies Act, 1956. The Company has taken
interest free unsecured loan from its Managing Director. The maximum
balance outstanding during the year was Rs. 46,24,020/- and the yearend
balance of the loan was Rs. 21,24,020/-. This loan is repayable on
(c) In our opinion and according to the explanations given to us, the
rate of interest wherever applicable, and other terms and conditions on
which such loans have been taken from the companies, firms or other
parties listed in the register maintained under section 301 of the
Companies Act, 1956 are not prima facie prejudicial to the interest of
(d) The Company is regular in repayment of demand loans.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and the nature of its
business, for the purchase of inventory and fixed assets and for the
sale of goods and services. During the course of our audit, we have not
observed any major weaknesses in internal control systems.
5. (a) According to the information and explanations provided by
the management, we are of the opinion that the particulars
of contracts or arrangements referred to in section 301 of the
Companies Act, 1956 that need to be entered into the register
maintained under section 301 have been so entered.
(b) In our opinion and according to the information and explanations
given to us, the transactions made in pursuance of such contracts or
arrangements and exceeding the value of Rs.500,000 have been entered into
during the financial year at prices which are reasonable having regard
to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public and
consequently, the directives issued by the Reserve Bank of India and
the provisions of Section 58A, 58AA or any other relevant provisions of
the Act and the rules framed there under are not applicable to the
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of accounts maintained by the
company pursuant to the rules prescribed by the Central Government for
maintenance of cost records under section 209(1) (d) of the Companies
Act, 1956; and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have however
not, made a detailed examination of these records with a view to
determine whether they are accurate and complete.
9. (a) According to the information and explanations given to us and
on the basis of our examination of books of account, the Company has
been generally regular in depositing undisputed statutory dues
including Provident Fund, Investor Education and Protection Fund,
Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs
duty, Excise duty, Cess and any other material statutory dues during
the year with the appropriate authorities. However, there have been
delays in remitting undisputed statutory dues with these authorities
(b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees''
State Insurance, Sales Tax, Income Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, Cess and other material statutory dues were
in arrears as at 3 I March 2013 for a period of more than six months
from the date they became payable.
(c) According to the information and explanations given to us, there
are no amounts in respect of Provident Fund, Income Tax, Sales Tax,
Wealth Tax, Service Tax, Customs Duty, Excise duty and Cess that have
not been deposited with appropriate authorities on account of any
dispute other than those mentioned in Annexure I to this report.
10. The Company has no accumulated losses. The Company has not
incurred cash losses in the financial year under report and in the
immediately preceding financial year.
11. The Company has not defaulted in repayment of dues to its bankers
or to any financial institution. The Company did not have any
outstanding debentures during the year.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Accordingly, clause 4(xii) of the Order is not applicable.
13. The Company is not a chit fund, nidhi or mutual benefit
fund/society. Accordingly, clause 4(xiii) of the Order is not
14. According to the information and explanations given to us, the
Company is not dealing or trading in shares, securities, debentures and
other securities. Accordingly, clause 4(xiv) of the Order is not
15. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from bank
or financial institutions. Accordingly, clause 4(xv) of the Order is
16. In our opinion and according to information and explanations given
to us and on the basis of examination of books of accounts, the term
loans obtained by the Company were applied for the purpose for which
such loans were obtained.
17. According to the information and explanations given to us, and on
an overall examination of the Balance Sheet and Cash Flow statement of
the Company, funds raised by the Company on short- term basis have not
been used to finance long term investment.
18. The Company has not made any preferential allotment of shares to
parties and companies covered in the register maintained under section
301 of the Act during the year. Accordingly, clause (xviii) of the
Order is not applicable.
19. The Company has not issued any debentures. Hence the requirements
of clause (xix) of paragraph 4 of the Order are not applicable to the
20. The Company has not raised any money by way of public issue during
21. During the course of our examination of the books of account
carried out in accordance with the generally accepted auditing
practices in India and according to the information and explanations
given to us, we have neither come across any instance of fraud on or by
the Company, noticed or reported during the year, nor have we been
informed of such case by the Management.
Anncxurc I as referred to in para 9(c) of annexure to the auditor''s
Name of the Statute Nature of dues Amount in
Service Tax under Finance
Act, 1994 Service Tax and equivalent 1,08,36,228
The Central Excise Act,
1944 Central Excise Duty and
The Central Excise Act,
1944 Central Excise Penalty 25,02,256
The Central Excise Act,
1944 Central Excise Duty and
The Kerala General Sales
Tax Act, Local Sales Tax 7,49,720
Period to which Forum where dispute is pending
Nov 2007 to Customs Excise Service Tax Appellate Tribunal,
July 201 Bangalore
FY 2008 - 09 Customs Excise Service Tax Appellate Tribunal,
Apr 2005 to Customs Excise Service Tax Appellate Tribunal,
Nov 2009 Bangalore
May 2000 to Customs Excise Service Tax Appellate Tribunal,
Nov 2001 Mumbai
FY 2002 - 03 The Deputy Commissioner (Appeals), Ernakulam
For TDJAINAND DISAKARIA
Firm registration no: 00249IS
27th May, 2013 M. No, 012034