We have audited the accompanying financial statements of Baba Arts
Limited (''the Company''), which comprise the Balance Sheet as at March
31,2015, the Profit and Loss Statement 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
The Company''s Management is responsible for the matters stated in
Section 134(5) of the Companies Act,2013 (the Act) with respect to
the preparation and presentation 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 notified 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 the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgements
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.
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and the
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 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, but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial
controls system over financial reporting and the operating
effectiveness of such controls. 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 financial
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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 31 March 2015, and its loss and its cash flows for the year ended on
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor''s Report) Order, 2015
(Order) issued by Central Government of India in terms of sub-section
(11) of section 143 of the Companies Act, 2013, we give in the annexure
a statement of 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
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
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 aforesaid financial statement 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 March 31, 2015 and taken on record by the Board of
Directors, none of the directors is disqualified as on March 31, 2015
from being appointed as a director in terms of section 164(2) of the
Companies Act 2013; and
f. 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 21.
ii. The Company does not foresee any material loss on long term
contracts including derivative contracts.
iii. There has been no delay in transferring amount required to be
transferred to the Investor Education and Protection Fund by the
ANNEXURE TO THE AUDITOR''S REPORT
(Referred to in paragraph 1 under the heading Report on Other Legal
and Regulatory Requirements of our report of even date)
i. (a) The Company has maintained proper records to show full
particulars including quantitative details and situation of
its fixed assets.
(b) The fixed assets of the Company have been physically verified by
the Management during the year and no material discrepancies between
the book records and the physical inventory have been noticed.
ii. Since, the Company is having only intellectual property rights as
its inventory therefore the para 3(ii) of the Order relating to
physical verification of inventories is not applicable.
iii. The Company has not granted any loans, secured or unsecured, to
companies, firms or other parties covered in the register maintained
under Section 189 of the Companies Act.Hence, the requirements of sub
clause (a)&(b) to clause (iii) of paragraph 3 of the said Order are not
applicable to the Company.
iv 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 purchase of fixed assets and sale of services. Further, on
the basis of our examination of the books and records of the Company,
and according to the information and explanations given to us, we have
neither come across nor have been informed of any continuing failure to
correct major weaknesses in the aforesaid internal control procedures.
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 the nature of its business with regard to
purchase of inventories and fixed assets and with regard to sale of
services. The activities of the Company do not involve sale of goods.
We have not observed any major weakness in the internal control system
during the course of the audit.
v The Company has not accepted any deposits from the public under the
provisions of Sections 73 to 76 or any relevant provisions of the
Companies Act and the rules framed there under.
vi. The Central Government has not prescribed the maintenance of cost
records under sub-section (1) of section 148 of the Companies Act for
any of the products of the Company.
vii. (a) According to the information and explanation given to us and on
the basis of our examination of the records of the Company, amounts
deducted/ accrued in the books of account in respect of undisputed
statutory dues including provident fund, income tax, sales tax, wealth
tax, service tax, duty of customs, value added tax, cess and other
material statutory dues have been regularly deposited during the year by
the Company with the appropriate authorities. As explained to us, the
Company did not have any dues on account of employees'' state insurance,
customs duty, wealth tax and duty of excise.
According to the information and explanations given to us, and the
records of the Company examined by us, there are no dues in respect of
income-tax, sales tax, wealth tax, service tax, customs duty, excise
duty, value added tax and cess as at March 31, 2015 which have not been
deposited on account of any dispute.
(b) According to the information and explanations given to us, there
are no material dues of wealth tax, service tax, duty of customs and
cess which have not been deposited with the appropriate authorities on
account of any dispute. However, according to information and
explanations given to us, the following dues of income tax, sales tax
and value added tax have not been deposited by the Company on account
Sr. No. Financial Year/Period Nature of Demand Amount Rs.
1 2010-2011 VAT 16,781,560
2 2010-2011 CST 61,256
Sr. No. Pending Before
1 Joint Commissioner sales tax
Sr. No. Financial Year/Period Nature of Demand Amount Rs.
1 2008-09 Tax and Interest 1,754,329
2 2010-11 Penalty 542,840
Sr. No. Pending Before
2 Dy. Commissioner I.T.
(c) According to the information and explanations given to us and on
the basis of our examination of the records of the Company, 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
viii. The Company does not have any accumulated losses at the end of
financial year.The Company has incurred cash loss of Rs.242.34 Lac
during the financial year covered by our audit.
ix. The Company did not have any outstanding dues to financial
institutions, banks or debenture holders during the year.
x In our opinion, and according to the information and explanation
given to us, the Company has not given any guarantee for loans taken by
others from bank or financial institutions during the year.
xi. The Company did not have any term loans outstanding during the
xii. According to the information and explanations given to us, no
material fraud on or by the Company has been noticed or reported during
the course of our audit.
For Prakkash Muni & Associates
Firm Registration No.:111792W
Membership No. 030544
Date: 13th May, 2015