You are here » Home » Companies » Company Overview » Ballarpur Industries Ltd

Ballarpur Industries Ltd.

BSE: 500102 Sector: Industrials
NSE: BALLARPUR ISIN Code: INE294A01037
BSE 00:00 | 24 Apr 2020 Ballarpur Industries Ltd
NSE 05:30 | 01 Jan 1970 Ballarpur Industries Ltd

Notice: Undefined property: stdClass::$market_capital_for_nse in /usr2/unibs/application/modules/live-market/views/scripts/company/bs-new-bse-nse-block.php on line 17
OPEN 0.43
PREVIOUS CLOSE 0.42
VOLUME 995698
52-Week high 2.75
52-Week low 0.31
P/E
Mkt Cap.(Rs cr) 57
Buy Price 0.44
Buy Qty 25000.00
Sell Price 0.44
Sell Qty 13905.00
OPEN 0.43
CLOSE 0.42
VOLUME 995698
52-Week high 2.75
52-Week low 0.31
P/E
Mkt Cap.(Rs cr) 57
Buy Price 0.44
Buy Qty 25000.00
Sell Price 0.44
Sell Qty 13905.00

Ballarpur Industries Ltd. (BALLARPUR) - Auditors Report


Notice: Undefined variable: pattern in /usr2/unibs/application/modules/live-market/views/scripts/company/annual-report.php on line 72

Company auditors report

TO THE MEMBERS OF BALLARPUR INDUSTRIES LIMITED

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the standalone financial statements of Ballarpur Industries Limited

(the 'Company') which comprise the Balance Sheet as at 31 March 2019 the Statement ofProfit and Loss the Statement of Changes in Equity and the Statement of Cash Flows forthe year then ended and notes to the financial statements including a summary of thesignificant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effect of the matters described in Basis forQualified Opinion section of our report the aforesaid standalone financial statementsgive the information required by the Act in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2019 and its loss (including othercomprehensive income) changes in equity and its cash flows for the year ended on thatdate.

Basis for Qualified Opinion

1. We draw reference to Note 45 accompanying the standalone financial statementswherein the Company has not accrued the liability towards outstanding Put Options whichforms the basis for our qualified opinion. As explained in the note the management isunable to quantify the liability with respect to the outstanding Put Options. Accordinglywe are unable to quantify the impact.

2. (a) As of the year end the Company while comparing the balances of borrowings withthe confirmations received from the lenders identified differences in interest expenseaccrued to the tune of ' 583 Lakhs. The interest expense accrued in the books of accountswere lower when compared with the interest confirmed by the lenders.

(b) In respect of borrowings not confirmed by banks the interest accrued by theCompany in the books as compared to the interest payable by the Company in terms of theloan agreement with the lenders is lower by ' 12401 Lakhs which includes penal interestof ' 6270 Lakhs.

(c) We have not received direct confirmation from certain lenders for the balanceoutstanding in borrowings aggregating to ' 82031 Lakhs.

These form the basis for our qualified opinion. Had the Company accrued the differencesin the books the finance cost and loss for the year would have increased by ' 12984Lakhs total comprehensive income and shareholders' fund would have reduced by ' 12984Lakhs. The impact on borrowings and finance cost if any on account of nonreceipt ofdirect confirmation from lenders could not be quantified.

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Material Uncertainty relating to Going Concern

We draw attention to Note 43 accompanying the standalone financial statements whichcontains conditions along with other matters which indicate that a material uncertaintyexists that may cast significant doubt on the Company's ability to continue as a goingconcern. The ability of the Company to continue as a going concern is dependent on theoutcome of the debt restructuring steps taken by the Company and the optimal utilizationof the operational units. Our opinion is not modified in respect of this matter.

Key audit matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

1. Impairment of assets

Refer Note 4(f) on impairment of assets and Note 2.9 accounting policy on impairment ofassets. We have considered impairment of assets as a Key Audit Matter due to the followingreasons

a. The impairment loss assessed by the management is ' 34697 Lakhs which is asignificant item of cost accounted in Statement of Profit and Loss.

b. The impairment loss is computed based on management's estimates and assumptionsregarding future operating cash flows weighted average cost of capital to be used fordiscounting future cash flows and / net realisable value of assets for the Cash GeneratingUnits identified.

Our procedures included the following

• Compared the performance of operating units with budgets and considered therecent trends to identify impairment indicators

• Assessed the methodology adopted by the management in identifying CashGenerating Units (CGU) to be tested for impairment taking into consideration the operatingstructure and applicable Accounting Standard.

• Verified the assumptions and estimates used by the management in arriving at thevalue in use for the respective CGUs.

• Independently checked the underlying calculation of net present value.

• Discussed the audit observations with the management and discussed significantdetails with respect to the approach assumptions & estimates by management and ourobservations with the Audit Committee.

2. Valuation of assets held for sale

Refer Note 40 on assets held for sale - land located at Choudwar Odisha. We haveconsidered assets held for sale as a Key Audit Matter due to the following reasons

a. The value of assets held for sale constitutes 11 % of the total assets of theCompany which is a significant item in the Balance Sheet.

b. Assets held for sale are measured at the lower of carrying amount or fair value lesscosts to sell.

The fair value of the assets held for sale has been estimated using valuationtechniques (including income and market approach) which includes unobservable inputs.

Our procedures included the following

• Checked the minutes of the Board meetings held during 2018-19 to evaluate thestatus of the assets held for sale and the proposed steps taken by the management inrealising those assets.

• Examined the external valuation report provided by the Company supporting thecarrying amount of assets held for sale.

• Discussed with the management and assessed the appropriateness of themethodology adopted for the valuation.

• Evaluated the objectivity independence and competency of the experts used bythe management by reference to their qualification and experience.

3. License Agreement for right to use BILT logo and trademark.

Refer to Note 47(d)(xxiii) on license fees towards transfer of right to use BILT Logoand other trademarks. We have considered the supplemental agreement entered into by theCompany for granting the right to use BILT Logo and other trademarks to Bilt Graphic PaperProducts Limited (BGPPL) a step-down subsidiary as a Key Audit Matter due to thefollowing reasons

a. The license fees of ' 26400 Lakhs towards transfer of right to use BILT Logo andother trademarks for the period of 25 years is a significant related party transactionduring the year.

b. The valuation of the consideration involves estimates and judgements which maysignificantly affect the valuation. Accordingly this is considered as a Key Audit Matter.

Our procedures included the following

• Examined the Company's external expert's reports supporting the valuation ofright to use BILT logo.

• Assessed the appropriateness of the valuation methodologies adopted.

• Discussed with the management on the assumptions and the reasonableness of suchassumptions considered in valuation such as discount rate weighted average cost ofcapital etc.

• Checked on a sample basis the accuracy of the input data given to management'sexpert for determining the fair value of the right to use of BILT Logo and othertrademarks.

• Evaluated the objectivity independence and competency of the experts used bythe management.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises Board's Report including its annexures but does not include thestandalone financial statements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. Except forthe mattter started in the Basis for Qualified Opinon section above we have nothing toreport in this regard.

Responsibilities of management and those charged with Governance for the standalonefinancial statements.

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 (the 'Act') with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsprescribed under Section 133 of the Act read with Companies (Indian Accounting Standards)Rules 2015 as amended. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or cease operations or has norealistic alternative but to do so.

The Board of Directors of the Company is also responsible for overseeing the Company'sfinancial reporting process.

Auditor's responsibility for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order

to design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinionon whether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and

(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on other Legal and Regulatory requirements

1) As required by the Companies (Auditor's Report) Order 2016 (the 'Order') issued bythe Central Government of India in terms of sub-section (11) of the Act we give inAnnexure 'A' to this Report a statement on the matters specified in paragraph 3 and 4 ofthe said 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 bestof our knowledge and belief were necessary for the purposes of our audit;

(b) in our opinion exceptfor the possible effects of matters described in Basis forQualified Opinion section of our report proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books;

(c) in our opinion proper returns adequate for the purposes of our audit have beenreceived from Unit Kamalapuram which has not been visited by us;

(d) the Balance Sheet the Statement of Profit and Loss the Statement of Changes inEquity and the Statement

of Cash Flows dealt with by this Report are in agreement with the books of account;

(e) in our opinion except for the possible effects of matters described in Basis forQualified Opinion section of our report the aforesaid financial statements comply withthe Indian Accounting Standards notified under Section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended;

(f) in our opinion the matter described in the Basis for Qualified Opinion paragraphabove may have an adverse effect on the functioning of the Company.

(g) on the basis of the written representations received from the Directors of theCompany as on 31 March 2019 taken on record by the Board of Directors none of theDirectors is disqualified as on 31 March 2019 from being appointed as a Director in termsof Section 164(2) of the Act; however we observed that the Company has defaulted inpayment of interest to the debenture holders and such default continues

for more than a year as at 31 March 2019;

(h) with respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure 'B';

(i) with respect to the other matters to be included in the auditor's report inaccordance with the requirements of Section 197(16) of the Act (as amended);

In our opinion and to the best of our information and according to the explanationsgiven to us the Company has not paid any remuneration to its directors during the year;and

(j) with respect to the other matters to be included in the auditor's report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. the Company has disclosed the impact of pending litigation on its financial position- Refer Note 44 to the financial statement.;

ii. the Company did not have any longterm contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. there has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company during the year except unclaimeddividend of ' 3 Lakhs pertaining to financial year 2009-10 which has not been transferredto Investor Education and Protection Fund by the Company as at 31 March 2019 (Refer Note16).

for SHARP & TANNAN
Chartered Accountants
Firm's Registration No. 003792S
V. Viswanathan
Partner
Membership No. 215565
Place: Gurugram
Date: 16 May 2019

"ANNEXURE A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements" section of our report to the members of Ballarpur Industries Limited("the Company") of even date)

(i) (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of property plant and equipment.

(b) As informed to us property plant and equipment have been physically verified bythe Management during the year. According to the

information and explanations given to us no discrepancies were noticed on suchverification.

(c) According to the information and explanation given to us and the records examinedby us and based on the examination of the scanned copies of the title deeds of all theimmovable properties pledged

with the bankers as security against borrowings we report that the title deeds of allthe immovable properties that have been pledged as security against borrowings and otherfacilities availed by the Company are held in the name of the Company as at the balancesheet date except the following:

Type of asset Total no. of instances Cost as at 31 March 2019 (' in Lakhs) Book value as at 31 march 2019 (' in Lakhs) Remarks
Leasehold Land 1 9 6 Refer Note below

Note: In respect of immovable property of land that have been taken on lease anddisclosed as property plant and equipment in the financial statements the leasearrangement is yet to be registered in the name of the Company.

(ii) Inventories have been physically verified by the Management at reasonableintervals during the year. In our opinion the frequency of such verification isreasonable. As explained to us the discrepancies noticed on verification between thephysical stock and the book records were not material.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under Section 189 of theCompanies Act 2013. Accordingly reporting under paragraph 3(iii) of the Order does notarise.

(iv) In our opinion and according to the information and explanations given to us theCompany has not advanced any loan made any investment given any guarantee or providedany security to

which the provisions of Section 185 and 186 of the Companies Act 2013 are applicable.Accordingly reporting under paragraph 3(iv) of the Order does not arise.

(v) According to the information and explanations given to us the Company has notaccepted any deposits during the year and does not have any unclaimed deposits as at 31March 2019. Accordingly reporting under paragraph 3(v) of the Order does not arise.

(vi) The Central Government has specified maintenance of cost records under Section148(1) of the Companies Act 2013 read with the Companies (Cost Records and Audit) Rules2014 (as amended) for the operations of the Company. We have broadly reviewed the costrecords maintained by the Company in respect of manufacture of paper and are of theopinion that prima facie the prescribed cost records have been made

and maintained. However we have not made a detailed examination of the cost recordswith a view to determine whether they are accurate or complete.

(vii)(a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion except for dues in respect of employees' stateinsurance goods and service tax the Company is generally not regular in depositingundisputed statutory dues of provident fund income-tax sales tax value added tax cessand professional tax during the year with appropriate authorities and there have beenserious delays in a large number of cases. According to the information and explanationsgiven to us statutory dues outstanding as at 31 March 2019 for a period of more than sixmonths from the date they became payable is given below:

Nature of disputed dues Period to which the amount relates Amount in ' Lakhs
Provident fund May 2017 to August 2018 1101
Income-tax deducted at source March 2017 to August 2018 13
Professional tax June 2016 to August 2018 29
Grama panchayath tax 2015-16 to 2018-19 109
Pension fund May 2016 to August 2018 242
Value added tax 2002-03 to 2007-08 1424
Central sales tax 2016-18 39

(b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of income tax sales tax service tax duty ofcustoms duty of excise value added tax as at 31 March 2019 which have not been depositedwith statutory authorities on account of a dispute pending are given in Appendix 1 to thisreport.

(viii) In our opinion and according to the explanations and information given to us andrecords of the Company examined by us the Company has defaulted in repayment of loans orborrowing to banks financial institutions and debenture-holders for which the lender-wise details are as follows. The Company did not have any loans or borrowing fromgovernment.

Lender

Repayment of principal

payment of interest

Period of default (days) Amount of default (' in Lakhs) period of default (Days) Amount of default (' in Lakhs)
EXIM Bank 60-517 days 3966 1-609 days 1183
Finquest Financial Solutions Private Limited 9-920 days 1562 1-943 days 1768
IDBI Bank 1-731 days 1875 182-790 days 2128
Phoenix Arc Pvt. Ltd. 6-93 days 912 1-609 days 1573
Life Insurance Corporation of India - - 63-793 days 3178
8315 9830

(ix) In our opinion and according to the information and explanations given to us theCompany has neither taken any term loans during the year nor has raised any money by wayof initial public offer or further public offer (including debt instruments). Accordinglyreporting on paragraph 3(ix) of the Order does not arise.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no material fraud by the Company and no material frauds on the Company byits officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has not paid or provided for managerial remuneration during the year.Accordingly reporting under paragraph 3(xi) of the Order does not arise.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company.

Accordingly reporting under paragraph 3(xii) of the Order does not arise.

(xiii) In our opinion and according to the information and explanations given to us andthe records of the Company examined by us all transactions with the related parties arein compliance with Section 177 of Companies Act 2013 where applicable and the detailshave been disclosed in the Ind AS financial statements as required by the applicableIndian Accounting Standards.

We are informed by the Management that the transactions entered into by the Companywith the related parties are in its ordinary course of business and are on arm's lengthbasis. Accordingly reporting on compliance of Section 188 of Companies Act 2013 does notarise.

(xiv) According to the information and explanations given to us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year. Accordingly reporting under paragraph 3(xiv) ofthe Order does not

arise.

(xv) In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith them during the year. Accordingly reporting under paragraph 3(xv) of the Order doesnot arise.

(xvi) The Company is not engaged in the business of non-banking financial institutionand is not required to be registered under Section 45-IA of the Reserve Bank of India Act1934. Accordingly reporting under paragraph 3(xvi) of the Order does not arise.

for SHARp & TANNAN
Chartered Accountants
(Firm's Registration No. 003792S)
V. Viswanathan
Partner
Membership No. 215565
Place: Gurugram
Date: 16 May 2019

Appendix 1 to Annexure A: The particulars of income tax sales tax duty of customsduty of excise value added tax as at 31 March 2019 which have not been deposited withstatutory authorities on account of a dispute

Name of the statute Period to which the amount relates Forum where disputes are pending Amount involved (' In Lakhs) Amount disputed and not paid (' In Lakhs)
AP Revenue Recovery Act 1864 1986-1988 District Collector Warangal 476 476
AP Tax on Entry of goods 2001 2013-2015 Appellate Deputy Commissioner Secunderabad 134 120
Electricity Act 2003 Since 2002 Supreme Court of India 3004 2746
1991-92 Supreme Court of India 1063 1063
1993-94 Supreme Court of India 325 325
1994-95 ITAT 1364 1364
2008-09 Supreme Court of India 17453 17453
2009-10 ITAT 2833 2833
2011-12 ITAT 2269 2269
2012-13 ITAT 242 242
2013-14 ITAT 755 755
2005-2009 CESTAT Chandigarh 91 91
2012-13 CESTAT Hyderabad 724 724
2013-14 Commissioner Panchkula 6 6
The Central Excise Act 1944 2017-18 Assistant Commissioner Yamuna nagar 12 12
Apr-Dec 2009 Commissioner Panchkula 20 20
Apr-May 2011 Assistant Commissioner Yamuna nagar 5 5
Nov 2010 - Mar 2011 CESTAT Delhi 15 15
1996-97 Assistant Commissioner Yamuna nagar 17 17
The Central Excise Tariff Act 1996-97 Joint Commissioner Panchkula 11 11
2004-2010 CESTAT Chandigarh 70 62
1994-1995 High Court Nainital 12 12
1997-98 Trade Tax Tribunal Saharanpur 2 2
2001-02 Appellate Deputy Commissioner Secunderabad 29 15
2002-03 Trade Tax Tribunal Saharanpur 1 1
2014-15 CTO Samarangam Chowk Circle Vijayawada 80 80
The Central Sales Tax Act 1956 2014-15 DCCT Kerala Commercial Taxes Department 3 3
2014-15(*) DCCT Saharanpur 8 8
2014-15 Deputy Commissioner (ST) (Large Taxpayer Unit) Secunderabad 75 66
2015-16(*) DCCT Saharanpur 2 2
2015-16 Deputy Commissioner (CT) (Large Taxpayer Unit) Secunderabad 4 4
The Customs Act 1962 2012-13 Commissioner Custom (Appeals) Jam Nagar 33 29
2012-13 Commissioner Custom (Appeals) Kandla 38 31
UP VAT Act 2008 2001-02 Trade Tax Tribunal Saharanpur 2 2
2016-17 DCCT Saharanpur 5 5

Note 1: The above amounts do not include penalty and interest.

(*): With respect to the dues stated above the Company is in the process of filingappeal with Deputy Commissioner Commercial Tax.

for SHARp & TANNAN
Chartered Accountants
(Firm's Registration No. 003792S)
V. Viswanathan Partner
Membership No. 215565
Place: Gurugram
Date: 16 May 2019

ANNEXURE 'B'TO THE INDEPENDENT AUDITOR'S REPORT

[Referred to in paragraph 2(h) of our Report of even date]

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013

We have audited the internal financial controls over financial reporting of BallarpurIndustries Limited ("the Company") as at 31 March 2019 in conjunction with ouraudit of the standalone Ind AS financial statements of the Company as of and for the yearended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting ("the Guidance Note") issued by the Institute of Chartered Accountantsof India ("ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013("the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing prescribed under Section 143(10) ofthe Act to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operating

effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the

risk that the internal financial control over financial reporting may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Qualified Opinion

According to the information and explanations given to us and based on our audit thefollowing material weakness has been identified as at 31 March 2019:

a) The Company's internal financial control over periodic reconciliation of amount dueto lenders were not operating effectively which needs to be strengthened.

A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the company's annual or interim financial statements willnot be prevented or detected on a timely basis.

In our opinion except for the possible effects of the material weakness describedabove on the achievement of the objectives of the control criteria the Company hasmaintained in all material respects adequate internal financial controls over financialreporting and such internal financial controls over financial reporting were operatingeffectively as of 31 March 2019 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the 31 March 2019standalone financial statements of the Company and these material weaknesses haveaffected our opinion on the standalone financial statements of the Company and we haveissued a qualified opinion on the standalone financial statements.

for SHARp & TANNAN
Chartered Accountants
(Firm's Registration No. 003792S)
v. viswanathan
Partner
Membership No. 215565
Place: Gurugram
Date : 16 May 2019


Notice: Undefined variable: mediaAbsUrl in /usr2/unibs/application/modules/live-market/controllers/CompanyController.php on line 6048