We have audited the attached balance sheet of Bal Pharma Limited as at
3I March 2012, the statement of profit and loss for the year ended on
that date annexed thereto and the cash flow statement for the year
ended on that date, which we have signed under reference to this
report. These financial statements are the responsibility of the
company''s management. Our responsibility is to express an opinion on
these financial statements based on our audit.
We have conducted our audit in accordance with auditing standards
generally accepted in India. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit
includes, examining, on a test basis, evidence supporting the amounts
and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by Management, as well as evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable basis for
As required by the Companies (Auditor''s Report) Order, 2003 as amended
by the Companies (Auditor''s Report)(Amendment) order, 2004 issued by
the Central Government of India in terms of section 227 (4A) of the
Companies Act, I956 and on the basis of such checks as we considered
appropriate and according to the information and explanations given to
us, we set out in the annexure a statement on the matters specified in
paragraphs 4 and 5 of the said order.
Further to our comments in the Annexure referred to in paragraph 3
above, we report that:
(i) We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purpose of our
(ii) In our opinion, proper books of accounts as required by law, have
been kept by the company so far as appears from our examination of
(iii) The balance sheet, the statement of profit and loss and the cash
flow statement dealt with by this report are in agreement with the
books of account;
(iv) In our opinion, the balance sheet, the statement of profit and
loss and the cash flow statement dealt with by this report comply with
the accounting standards referred to in sub-section (3C) of Section 2II
of the Companies Act, I956 to the extent applicable;
(v) On the basis of the written representations received from the
directors, as on 3I March 2012 and taken on record by the Board of
Directors, we report that none of the directors is disqualified as on
3I March 2012 from being appointed as a Director in terms of clause (g)
of sub-section (I) of section 274 of the Companies Act, I956 ; and
(vi) In our opinion and to the best of our information and according to
the explanations given to us, the said accounts, together with the
notes thereon and attached thereto and subject to Note no.43 regarding
non-confirmation of balances in parties accounts and pending review of
old balances, give in the prescribed manner the information required by
the Act and give a true and fair view in conformity with the accounting
principles generally accepted in India:
(a) in the case of the balance Sheet, of the state of affairs of the
company, as at 3I March 2012;
(b) in the case of the statement of profit and loss, of the profit for
the year ended on that date; and
(c) in the case of the cash flow statement, of the cash flows for the
year ended on that date.
ANNEXURE TO THE AUDITOR''S REPORT
Annexure referred to in Paragraph 3 of the report of the Auditors to
the members of Bal Pharma Limited for the year ended 3I March 2012:
1. The company has maintained proper records showing full particulars
including quantitative details and situation of its fixed assets. These
fixed assets were physically verified by management according to a
phased programme designed to cover all the items over a period of three
years. Pursuant to the programme, physical verification of certain
assets was carried out during the year and we have been informed that
no material discrepancies were noticed on such physical verification.
Substantial part of fixed assets have not been disposed off during the
year, which will affect its status as going concern.
2. The stock of inventory has been physically verified during the year
by the management at reasonable intervals. In our opinion, the
procedures of physical verification of inventory, followed by the
management is reasonable and adequate in relation to the size of the
Company and the nature of its business. The Company is maintaining
proper records of inventory. The discrepancies noticed during the
physical verification of stocks as compared to book records were not
material; however, the same has been properly dealt with in the books
3. (a) According to the information and explanations given to us, the
company has not granted any loans to companies, firms or other parties
covered in the register maintained under Section 30I of the Companies
Act, I956. Accordingly, the provisions of clause 4(iii)(a) to (d) of
the order are not applicable to the company and hence not commented
(b) The company has taken interest free unsecured loans, from
companies, firms or other parties covered in the register maintained
under Section 30I of the Companies Act, I956. The company has taken
interest free unsecured loan from its Managing director. The maximum
balance outstanding during the year was Rs. 63,95,700/- and the yearend
balance of the loan was Rs. 33,80,700/-. This loan is repayable on
(c) In our opinion and according to the explanations given to us, the
rate of interest, wherever applicable, and other terms and conditions
on which such loans have been taken from the companies, firms or other
parties listed in the register maintained under section 30I of the
Companies Act, I956 are not prima facie prejudicial to the interest of
(d) The company is regular in repayment of demand loans.
4. In our opinion, there is an adequate internal control procedure
commensurate with the size of the Company and nature of its business,
for the purchase of inventory and fixed assets and for the sale of
goods and services. We have not observed any major weakness in the
internal control system during the course of our audit.
5. In our opinion, and according to the information and explanations
given by the management, we are of the opinion that contracts and
arrangements referred to in section 301 of the Act have been entered in
the register required to be maintained under that section and such
transactions have been made at prices which are reasonable having
regard to the prevailing market prices at the relevant time.
6. The Company has not accepted any deposits from the public and
consequently, the directives issued by the Reserve Bank of India and
the provisions of Section 58A, 58AA or any other relevant provisions of
the Act and the rules framed there under are not applicable to the
7. In our opinion, the Company has an internal audit system
commensurate with the size and nature of its business.
8. We have broadly reviewed the books of accounts maintained by the
Company pursuant to the rules prescribed by the Central government for
maintenance of cost records under Section 209(1)
(d) of the Act and are of the opinion that prima facie the prescribed
accounts and records have been made and maintained. We have not however
made a detailed examination of records with a view to determining
whether they are accurate and complete.
9. a) According to the information and explanations given to us and on
the basis of our examination of books of account, the Company has been
generally regular in depositing undisputed statutory dues including
Provident Fund, Employees'' State Insurance, Income Tax, Sales Tax,
Wealth Tax, Customs duty, Excise duty, Cess and any other material
statutory dues during the year with the appropriate authorities.
However, there have been delays in remitting undisputed statutory dues
with these authorities. Further, an amount of Rs. 184,828/- required to
be deposited during the year in Investor Education and Protection fund
towards unclaimed dividend of financial year 2003-04 has not been
deposited as at 31 March 2012.
b) According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, Employees''
State Insurance, Sales Tax, Income Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty, Cess and other material statutory dues were
in arrears as at 31 March 2012 for a period of more than six months
from the date they became payable. However an amount of Rs. 184,828/-
required to be deposited in Investor Education and Protection fund
towards unclaimed dividend of financial year 2003-04 was in arrears as
at 31 March 2012 for a period of more than six months from the date it
c) According to the information and explanations given to us, there are
no amounts in respect of Provident Fund, Income Tax, Sales Tax, Wealth
Tax, Service Tax, Customs Duty, Excise duty and Cess that have not been
deposited with appropriate authorities on account of any dispute other
than those mentioned in Annexure I to this report.
10. The Company has no accumulated losses. The Company has not
incurred cash losses in the financial year under report and in the
immediately preceding financial year.
11. The Company has not defaulted in repayment of dues to its bankers
or to any financial institution. The Company did not have any
outstanding debentures during the year.
12. The Company has not granted any loans and advances on the basis of
security by way of pledge of Shares, debentures and other securities.
Accordingly, clause 4(xii) of the Order is not applicable.
13. The Company is not a chit fund, nidhi or mutual benefit fund/
society. Accordingly, clause 4(xiii) of the Order is not applicable.
14. Accordingly to the information and explanations given to us, the
Company is not dealing or trading in Shares, securities, debentures and
other investments. Accordingly clause 4(xiv) of the Order is not
15. Based on the information and explanations given to us, the Company
has not given any guarantee for loans taken by others from bank or
16. In our opinion and according to information and explanations given
to us and on the basis of examination of books of accounts, the term
loans obtained by the Company were applied for the purpose for which
such loans were obtained.
17. According to the information and explanations given to us, and on
an overall examination of balance sheet of the Company, we are of the
opinion that the funds raised on short-term basis have not been used
for long-term investments.
18. The Company has not made any preferential allotment of Shares to
parties and companies covered in the register maintained under section
30I of the Act during the year. Accordingly, clause (xviii) of the
Order is not applicable.
19. The Company has not issued any debentures. Hence the requirements
of clause (xix) of paragraph 4 of the Order are not applicable to the
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.
Annexure 1 as referred to para 9 of annexure to the Auditor''s Report
Name of the
of dues Amount in Period to
which Forum where
Act, I944 Central
and penalty 8,68,598 2000-01 Customs, Excise,
Sales Tax Local Sales
tax 7,49,720 2002-03 The Deputy
Act,1963 (Appeals), Ernakulam
For T D JAIN AND D I SAKARIA
Firm registration no: 00249IS
T D JAIN
10th August, 2012 M. No.: 12034