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Bal Pharma
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« Mar 12
Auditor's Report (Bal Pharma) Year End : Mar '13
Report on the financial statements
 
 We have audited the accompanying financial statements of M/s BAL PHARMA
 LIMITED, which comprise the balance sheet as at 31 March 2013, and the
 statement of profit and loss and cash flow statement for the year then
 ended, and a summary of significant accounting policies and other
 explanatory information.
 
 Management''s responsibility for the financial statements
 
 Management is responsible for the preparation of these financial
 statements that give a true and fair view of the financial position,
 financial performance and cash flows of the company in accordance with
 the accounting principles generally accepted in India, including
 Accounting standards referred to in sub-section (3C) of section 21 I of
 the Companies Act, 1956 (the Act). This responsibility includes the
 design, implementation and maintenance of internal control relevant to
 the preparation and presentation of the financial statements that ge a
 true and fair view and are free from material misstatement, whether due
 to fraud or error.
 
 Auditor''s responsibility
 
 Our responsibility is to express an opinion on these financial
 statements based on our audit. We conducted our audit in accordance
 with the standards on auditing issued by the Institute of Chartered
 Accountants of India. Those standards require that we comply with
 ethical requirements and plan and perform the audit to obtain
 reasonable assurance whether the financial statements are free from
 material misstatement.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and disclosures in the financial statements. The procedures
 selected depend on the auditor''s judgement, including the assessment of
 the risks of material misstatement of the financial statements, whether
 due to fraud or error. In making those risk assessments, the auditor
 considers internal control relevant to the company''s preparation and
 fair presentation of the financial statements in order to design audit
 procedures that are appropriate in the circumstances, but not for the
 purpose of expressing an opinion on the effectiveness of the company''s
 internal control. An audit also includes evaluating the appropriateness
 of accounting policies used and reasonableness of the accounting
 estimates made by management, as well as evaluating the overall
 presentation of the financial statements.
 
 We believe that the audit evidence we have obtained is sufficient and
 appropriate to provide a basis for our audit opinion.
 
 Opinion
 
 In our opinion and to the best of our information and according to the
 explanation gK,en to us, the financial statements ge the information
 required by the Act in the manner so required and give a true and fair
 view in conformity with the accounting principles generally accepted in
 India:
 
 (a) in the case of the balance sheet, of the state of affairs of the
 company as at 3 I March 2013;
 
 (b) in the case of the statement of profit and loss, of the profit for
 the year ended on that date; and
 
 (c) in the case of the cash flow statement, of the cash flows for the
 year ended on that date.
 
 Report on other legal and regulatory requirements
 
 1.  As required by the Companies (Auditor''s Report) Order, 2003 (the
 Order) issued by the Central Government of India in terms of
 sub-section (4A) of section 227 of the Act, we give in the Annexure a
 statement on the matters specified in paragraphs 4 and 5 of the Order.
 
 2.  As required by section 227(3) of the Act, we report that:
 
 (a) We have obtained all the information and explanations which to the
 best of our knowledge and belief were necessary for the purpose of our
 audit.
 
 (b) In our opinion proper books of account as required by law have been
 kept by the company so far as it appears from our examination of those
 books.
 
 (c) The balance sheet, statement of profit and loss and cash flow
 statement dealt with by this report are in agreement with the books of
 account.
 
 (d) In our opinion, the balance Sheet, statement of profit and loss and
 cash flow statement comply with the accounting standards referred to in
 sub-section (3C) of section 21 I of the Companies Act, 1956.
 
 (e) On the basis of written representation received from the directors,
 as on 31 March 2013 and taken on record by Board of Directors, we
 report that none of the directors is disqualified as on 3 I March 2013
 from being appointed as a director in terms of clause (g) of
 sub-section (I) of section 274 of the Companies Act, 1956.
 
 ANNEXURE TO THE AUDITOR''S REPORT
 
 The Annexure referred to in paragraph I under the heading
 
 Report on other legal and regulatory requirements of the auditor''s
 report of Bal Pharma Limited for the year ended 31 March 2013
 
 1.  The Company has maintained proper records showing full particulars
 including quantitative details and situation of its fixed assets. These
 fixed assets were physically verified by management according to a
 phased programme designed to cover all items over a period of three
 years. Pursuant to the programme, physical verification of certain
 assets was carried out during the year and we have been informed that
 no material discrepancies were noticed on such physical verification.
 Substantial part of fixed assets have not been disposed off during the
 year, which will affect its status as going concern.
 
 2.  The stock of inventory has been physically verified during the year
 by the management at reasonable intervals. In our opinion, the
 procedures of physical verification of inventory, followed by the
 management is reasonable and adequate in relation to the size of the
 Company and the nature of its business. The Company is maintaining
 proper records of inventory. The discrepancies noticed during the
 physical verification of stocks as compared to book records were not
 material; however, the same has been properly dealt with in the books
 of account.
 
 3.  (a) According to the information and explanations given to us, the
 
 company has not granted any loans to companies, firms or other parties
 covered in the register maintained under Section 301 of the Companies
 Act, 1956. According, the provisions of Clause 4(iii)(a) to (d) of the
 order are not applicable to the Company and hence not commented upon.
 
 (b) The Company has taken interest free unsecured loans, from
 companies, firms or other parties covered in the register maintained
 under section 301 of the Companies Act, 1956.  The Company has taken
 interest free unsecured loan from its Managing Director. The maximum
 balance outstanding during the year was Rs. 46,24,020/- and the yearend
 balance of the loan was Rs. 21,24,020/-. This loan is repayable on
 demand.
 
 (c) In our opinion and according to the explanations given to us, the
 rate of interest wherever applicable, and other terms and conditions on
 which such loans have been taken from the companies, firms or other
 parties listed in the register maintained under section 301 of the
 Companies Act, 1956 are not prima facie prejudicial to the interest of
 the Company.
 
 (d) The Company is regular in repayment of demand loans.
 
 4.  In our opinion and according to the information and explanations
 given to us, there are adequate internal control procedures
 commensurate with the size of the Company and the nature of its
 business, for the purchase of inventory and fixed assets and for the
 sale of goods and services. During the course of our audit, we have not
 observed any major weaknesses in internal control systems.
 
 5.  (a) According to the information and explanations provided by
 the management, we are of the opinion that the particulars
 of contracts or arrangements referred to in section 301 of the
 Companies Act, 1956 that need to be entered into the register
 maintained under section 301 have been so entered.
 
 (b) In our opinion and according to the information and explanations
 given to us, the transactions made in pursuance of such contracts or
 arrangements and exceeding the value of Rs.500,000 have been entered into
 during the financial year at prices which are reasonable having regard
 to the prevailing market prices at the relevant time.
 
 6.  The Company has not accepted any deposits from the public and
 consequently, the directives issued by the Reserve Bank of India and
 the provisions of Section 58A, 58AA or any other relevant provisions of
 the Act and the rules framed there under are not applicable to the
 Company.
 
 7.  In our opinion, the Company has an internal audit system
 commensurate with the size and nature of its business.
 
 8.  We have broadly reviewed the books of accounts maintained by the
 company pursuant to the rules prescribed by the Central Government for
 maintenance of cost records under section 209(1) (d) of the Companies
 Act, 1956; and are of the opinion that prima facie the prescribed
 accounts and records have been made and maintained. We have however
 not, made a detailed examination of these records with a view to
 determine whether they are accurate and complete.
 
 9.  (a) According to the information and explanations given to us and
 on the basis of our examination of books of account, the Company has
 been generally regular in depositing undisputed statutory dues
 including Provident Fund, Investor Education and Protection Fund,
 Employees'' State Insurance, Income Tax, Sales Tax, Wealth Tax, Customs
 duty, Excise duty, Cess and any other material statutory dues during
 the year with the appropriate authorities. However, there have been
 delays in remitting undisputed statutory dues with these authorities
 
 (b) According to the information and explanations given to us, no
 undisputed amounts payable in respect of Provident Fund, Employees''
 State Insurance, Sales Tax, Income Tax, Wealth Tax, Service Tax,
 Customs Duty, Excise Duty, Cess and other material statutory dues were
 in arrears as at 3 I March 2013 for a period of more than six months
 from the date they became payable.
 
 (c) According to the information and explanations given to us, there
 are no amounts in respect of Provident Fund, Income Tax, Sales Tax,
 Wealth Tax, Service Tax, Customs Duty, Excise duty and Cess that have
 not been deposited with appropriate authorities on account of any
 dispute other than those mentioned in Annexure I to this report.
 
 10.  The Company has no accumulated losses. The Company has not
 incurred cash losses in the financial year under report and in the
 immediately preceding financial year.
 
 11. The Company has not defaulted in repayment of dues to its bankers
 or to any financial institution. The Company did not have any
 outstanding debentures during the year.
 
 12.  The Company has not granted any loans and advances on the basis of
 security by way of pledge of shares, debentures and other securities.
 Accordingly, clause 4(xii) of the Order is not applicable.
 
 13.  The Company is not a chit fund, nidhi or mutual benefit
 fund/society. Accordingly, clause 4(xiii) of the Order is not
 applicable.
 
 14.  According to the information and explanations given to us, the
 Company is not dealing or trading in shares, securities, debentures and
 other securities. Accordingly, clause 4(xiv) of the Order is not
 applicable.
 
 15.  According to the information and explanations given to us, the
 Company has not given any guarantee for loans taken by others from bank
 or financial institutions. Accordingly, clause 4(xv) of the Order is
 not applicable.
 
 16.  In our opinion and according to information and explanations given
 to us and on the basis of examination of books of accounts, the term
 loans obtained by the Company were applied for the purpose for which
 such loans were obtained.
 
 17.  According to the information and explanations given to us, and on
 an overall examination of the Balance Sheet and Cash Flow statement of
 the Company, funds raised by the Company on short- term basis have not
 been used to finance long term investment.
 
 18.  The Company has not made any preferential allotment of shares to
 parties and companies covered in the register maintained under section
 301 of the Act during the year. Accordingly, clause (xviii) of the
 Order is not applicable.
 
 19.  The Company has not issued any debentures. Hence the requirements
 of clause (xix) of paragraph 4 of the Order are not applicable to the
 Company.
 
 20.  The Company has not raised any money by way of public issue during
 the year.
 
 21.  During the course of our examination of the books of account
 carried out in accordance with the generally accepted auditing
 practices in India and according to the information and explanations
 given to us, we have neither come across any instance of fraud on or by
 the Company, noticed or reported during the year, nor have we been
 informed of such case by the Management.
 
 Anncxurc I as referred to in para 9(c) of annexure to the auditor''s
 report
 
 Name of the Statute         Nature of dues                  Amount in
 
 Service Tax under Finance 
 Act, 1994                   Service Tax and equivalent    1,08,36,228
                             penalty
 
 The Central Excise Act, 
 1944                        Central Excise Duty and 
                             Penalty                          7,23,340
 
 The Central Excise Act, 
 1944                        Central Excise Penalty          25,02,256
 
 The Central Excise Act, 
 1944                        Central Excise Duty and 
                             Penalty                          8,68,598
 
 The Kerala General Sales 
 Tax Act,                    Local Sales Tax                  7,49,720
 1963
 
 Period to which        Forum where dispute is pending
 Amount relate
 
 Nov 2007 to            Customs Excise Service Tax Appellate Tribunal,
 July 201               Bangalore
 
 FY 2008 - 09           Customs Excise Service Tax Appellate Tribunal,
                        Bangalore
 
 Apr 2005 to            Customs Excise Service Tax Appellate Tribunal,
 Nov 2009               Bangalore
 
 May 2000 to            Customs Excise Service Tax Appellate Tribunal,
 Nov 2001               Mumbai
 
 FY 2002 - 03           The Deputy Commissioner (Appeals), Ernakulam
 
 
 
                                        For TDJAINAND DISAKARIA
 
                                          Chartered Accountants
 
                                  Firm registration no: 00249IS
 
                                                         TDJAIN
 
 Bangalore                                              Partner
 
 27th May, 2013                                   M. No, 012034
Source : Dion Global Solutions Limited
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