To the members of
M/s. Balaxi Pharmaceuticals Limited
Report on the Audit of the Standalone IND AS Financial Statements
Opinion
We have audited the accompanying Ind AS Standalone financial statements of Balaxi
Pharmaceuticals Limited, which comprise the balance sheet as at 31st March
2023, the statement of Profit and Loss (including Other Comprehensive income), Statement
of Changes in Equity and Statement of Cash flows for the year then ended and notes to the
financial statements, including a summary of significant accounting policies and other
explanatory information.
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid standalone 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 March 31, 2023, and Profit for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified
under section 143(10) of the Companies Act, 2013. Our responsibilities under those
Standards are further described in the Auditors Responsibilities for the Audit of the
Standalone Financial Statements section of our report. We are independent of the Company
in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of
India together with the ethical requirements that are relevant to our audit of the
standalone financial statements under the provisions of the Companies Act, 2013 and the
Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance
with these requirements and the Code of Ethics. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the Standalone financial statements of the current period.
These matters were addressed in the context of our audit of the financial statements as a
whole, and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
Depending on the facts and circumstances of the entity and the Audit, we have
determined the matters described below to be the key audit matters to be communicated in
our report.
Key Audit Matter |
How the Key Audit Matter was addressed in our audit |
| The Company has obtained leasehold land by entering into lease agreement
with Telangana State Industrial Infrastructure Corporation Limited attracting the adoption
of Ind AS 116 "Leases". |
Our audit procedures included the following: |
| Significant judgement is required in the assumptions and estimates used
in order to apply the definition of lease, application of discount rate, and lease term
for computation of ROU asset and lease liability |
• Obtained an understanding of the Companys adoption of Ind AS 116
and identified the internal controls including entity level control adopted by the Company
for accounting, processes and systems under the accounting standard; |
| . We considered this a key audit matter due to the inherently judgmental
nature to determine the lease liabilities. |
• Assessed the discount rates applied in determining lease
liabilities; |
|
• We assessed and evaluated the reasonableness of lease terms used
for computation lease liabilities and right-of -use assets; |
|
• We obtained the companys quantification of ROU assets and lease
liabilities. We agreed the inputs used in the quantification to the lease agreements and
performed re-computation of lease liabilities and ROU asset in accordance with the lease
registration documents; |
|
• We assessed whether the related presentations and disclosures
within the financial statements are appropriate in compliance with the requirements of Ind
AS 116 "Leases". |
Managements Responsibility for the Standalone Financial Statements
The Companys Board of Directors 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 Ind AS standalone financial statements that give a true and fair
view of the financial position, financial performance (including the other comprehensive
income), cash flows and Statement of Changes in Equity of the Company in accordance with
the accounting principles generally accepted in India, including the Indian Accounting
Standards specified under Section 133 of the Act, read with Relevant Rules issued
thereunder. 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 judgments 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 Standalone Ind AS financial statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, management is responsible for
assessing the Companys ability to continue as a goingconcern, disclosing, as applicable,
matters related to going concern and using the going concern basis of accounting unless
managementeither intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
The Board of Directors are also responsible for overseeing the Companys financial
reporting process.
Auditors Responsibility
Our objectives are to obtain reasonable assurance about whether the Standalone
financial statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditors report that includes our opinion. Reasonable assurance
is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with SAs will always detect a material misstatement when it exists. Misstatements can
arise from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of these Standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone
financial statements, whether due to fraud or error, design and perform audit procedures
responsive to those risks, and obtain audit evidence that is sufficient and appropriate to
provide a basis for our opinion. The risk of not detecting a material misstatement
resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
• Obtain an understanding of internal financial controls relevant to the audit in
order to design audit Procedures that is appropriate in the circumstances. Under section
143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the
Company has adequate internal financial controls system in place and the operating
effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness
of accounting estimates and related disclosures made by management.
• Conclude on the appropriateness of managements use of the going concern basis
of accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If we conclude that a material uncertainty exists;
we are required to draw attention in our auditors report to the related disclosures in
the Standalone financial statements or, if such disclosures are inadequate, to modify our
opinion.
Our conclusions are based on the audit evidence obtained up to the date of our
auditors report.
However, future events or conditions may cause the Company to cease to continue as a
going concern. 101
• Evaluate the overall presentation, structure and content of the standalone
financial statements, including the disclosures, and whether the standalone financial
statements represent the underlying transactions and events in a manner that achieves fair
presentation.
• Materiality is the magnitude of misstatements in the standalone financial
statements that, individually or in aggregate, makes it probable that the economic
decisions of a reasonably knowledgeable user of the financial statements may be
influenced. We consider quantitative materiality and qualitative factors in (i) planning
the scope of our audit work and in evaluating the results of our work; and (ii) to
evaluate the effect of any identified misstatements in the financial statements.
• We communicate with those charged with governance regarding, among other
matters, the planned scope and timing of the audit and significant audit findings,
including any significant deficiencies in internal control that we identify during our
audit.
• We also provide those charged with governance with a statement that we have
complied with relevant ethical requirements regarding independence, and to communicate
with them all relationships and other matters that may reasonably be thought to bear on
our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those
matters that were of most significance in the audit of the standalone financial statements
of the current period and are therefore the key audit matters. We describe these matters
in our auditors report unless law or regulation precludes public disclosure about the
matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the companies (Auditors Report) Order, 2020 (‘the order)
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Act, we give in the "Annexure A", a statement on the matters specified in
the paragraph 3 and 4 of the order.
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 purposes 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(including Other Comprehensive
Income), the Cash Flow Statement and the Statement of changes in Equity dealt with by this
Report are in agreement with the books of account;
(d) In our opinion, the aforesaid standalone financial statements comply with the
Indian Accounting Standards specified under Section 133 of the Act, read with Relevant
Rules issued there under.
(e) On the basis of the written representations received from the directors as on 31st
March, 2023 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2023 from being appointed as a director in terms of Section
164 (2) of the Act.
(f) With respect to the adequacy of internal financial controls over financial
reporting of the company and the operating effectiveness of such controls, refer to our
separate report in "Annexure B"; and
(g) With respect to the other matters to be included in the Auditors Report in
accordance 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 explanations given to us, the
remuneration paid by the company to its directors during the year is in accordance with
the provisions of section 197 of Act.
(h) With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014 as amended, in
our opinion and to the best of our information and according to the explanations given to
us:
i. The Company does not have any pending litigations which would impact its financial
position.
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts which were required to be
transferred to the Investor Education and Protection Fund by the company during the year.
iv. The Management has represented that, to the best of its knowledge and belief, no
funds have been advanced or loaned or invested (either from borrowed funds or share
premium or any other sources or kind of funds) by the Company to or in any other persons
or entities, including foreign entities ("Intermediaries"), with the
understanding, whether recorded in writing or otherwise, that the Intermediary shall,
directly or indirectly lend or invest in other persons or entities identified in any
manner whatsoever ("Ultimate Beneficiaries") by or on behalf of the Company or
provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
v. The Management has represented that, to the best of its knowledge and belief, no
funds have been received by the Company from any persons or entities, including foreign
entities ("Funding Parties"), with the understanding, whether recorded in
writing or otherwise, that the Company shall directly or indirectly, lend or invest in
other persons or entities identified in any manner whatsoever ("Ultimate
Beneficiaries") by or on behalf of the Funding Parties or provide any guarantee,
security or the like on behalf of the Ultimate Beneficiaries.
vi. Based on the audit procedures performed that have been considered reasonable and
appropriate in the circumstances, nothing has come to our notice that has caused us to
believe that the representations under sub-clause (i) and (ii) of Rule 11(e) contain any
material misstatement.
vii. The final dividend paid by the company during the year in respect of the same
declared for the previous year is in accordance with the section 123 of the Act to the
extent it applies to the payment of dividend.
For P Murali& Co.,
Chartered Accountants
Firm Regn No. 007257S
A Krishna Rao
Partner
Membership No. 020085
UDIN: 23020085BGQXIO8903
Place: Hyderabad
Date: 29-05-2023
Annexure A
To the Auditors Report
Annexure referred to in paragraph 1 of Our Report of even date to the members of M/s.
Balaxi Pharmaceuticals Limited on the accounts of the company for the year ended 31st
March 2023 Under "Report on other Legal & Regulatory Requirements"
i. (a) (A) The Company has maintained proper records showing full particulars,
including quantitative details and situation of Property Plant & Equipment.
(B) The company has maintained proper records showing full particulars of intangible
assets.
(b) According to the information and explanations given to us and on the basis of our
examination of records of the Company, PPE have been physically verified by the management
at regular intervals; as informed to us no material discrepancies were noticed on such
verification. In our opinion, the frequency of verification is reasonable.
(c) According to the information and explanations given to us and on the basis of our
examination of records of the Company, the company doesnt possess any immovable property.
In respect of immovable properties taken on lease and disclosed as property, plant and
equipment in the standalone Ind AS financial statements, the lease agreements are duly
executed in the name of the Company.
(d) According to the information and explanations given to us and on the basis of our
examination of records, the company has not revalued the Property Plant and Equipment or
intangible assets during the period under review.
(e) No proceedings have been initiated or are pending against the company for holding
any benami property under the Benami Transactions (Prohibition) Act, 1988.
ii. (a) According to the information and explanations given to us and on the basis of
our examination of the records of the company inventories have been physically verified at
reasonable intervals of time and no material discrepancies have been found.
(b) During the year, the company was sanctioned funded working capital limits to the
extent of T 30 crores in the nature of cash credit on the basis of entire current assets.
The quarterly statement filed by the Company with the bank is in agreement with the books
of account of the Company.
iii. The company has not granted any loans, secured or unsecured, to companies, firms,
and Limited Liability partnerships or other parties covered in the register maintained
under section 189 of the Companies Act, 2013.
iv. In our opinion and according to the information and explanations given to us, the
Company has not given any loans, guarantees and securities as referred to in section 185
and 186 of the Act. The investments made are in compliance with section 186 of the Act
v. In our opinion and according to the information and explanations given to us, the
Company has not accepted any deposits within the meaning of section 73 to 76 or any other
relevant provisions of the Companies Act,2013 and the rules framed there under.
vi. The maintenance of cost records has not been specified by the Central Government
under section 148(1) of the Companies Act, 2013 for the business activities carried out by
the Company.
vii. (a) According to the information and explanations given to us and based on the
records of the company examined by us, the company is regular in depositing the undisputed
statutory dues, including Provident Fund, Employees State Insurance, Income-tax, Goods
and Services Tax, Customs Duty and other material statutory dues, as applicable.
(b) There are no undisputed amounts payable in respect of Provident Fund, , Employees
State Insurance and Income-tax and other material statutory dues in arrears as at 31st
March 2023 for a period of more than 6 months from the date they became payable.
(c) According to the information and explanation given to us and the records of the
Company examined by us, there are no dues of income tax, goods and service tax, customs
duty, cess and any other statutory dues, which have not been deposited on account of any
dispute.
viii. Based on our audit procedures and according to the information and explanations
given to us, we are of the opinion that the company does not have any transactions which
are not recorded in the books of account have been surrendered or disclosed as income
during the year in the tax assessments under the Income Tax Act.
ix. In our opinion and according to the information and explanations given to us, the
Company has not defaulted in repayment of loans or other borrowings or in the payment of
interest thereon to any lender during the year. The company has not issued any debentures.
x. According to the information and explanations given to us,
(A) The Company has not raised moneys by way of initial public offer or further public
offer including debt instruments and term loans.
(B) The Company has made preferential allotment of shares and share warrants during the
year under review.
In respect of the above issue, we further report that:
a. the requirement of Section 42 of the Companies Act, 2013 as applicable, have been
complied with; and
b. the amounts raised have been applied by the Company during the year for the purposes
for which the funds were raised.
xi. During the course of examination of books of account and records of the company,
carried out in accordance with the generally accepted auditing practices in India and
according to information and explanations given to us, we have neither come across any
instance of material fraud on or by the company, noticed or reported during the year, nor
have been informed of such cases by the management.
xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable
to it.
xiii. The Company has entered into transactions with related parties in compliance with
the provisions of section 177 and 188 of the Act. The details of such related party
transactions have been disclosed in the financial statements as required under Indian
Accounting standard (Ind AS) 24, related party disclosures specified under section 133 of
the Act, read with relevant rules issued there under.
xiv. (a) In our opinion the company has an adequate internal audit system which
commensurate with the size and nature of its business.
(b) The reports of the Internal Auditors for the period under audit were duly
considered by us in determining the nature, timing and extent of our audit procedures.
xv. The Company has not entered into non-cash transactions with its directors or
persons connected with him.
xvi. The Company is not required to be registered under section 45-IA of The Reserve
Bank of India Act 1934.
xvii. The Company has not incurred cash losses in the current and in the immediately
preceding financial year.
xviii. There has been no resignation of the statutory auditors during the year.
xix. On the basis of the financial ratios, ageing and expected dates of realization of
financial assets and payment of financial liabilities, other information accompanying the
financial statements, based on our knowledge of the Board of Directors and management
plans, we are of the opinion that no material uncertainty exists as on the date of the
audit report and company is capable of meeting its liabilities existing at the date of
balance sheet.
xx. a) In respect of other than ongoing projects, there are no unspent amounts that are
required to be transferred to a fund specified in Schedule VII of the Act, in compliance
with second proviso to sub section 5 of section 135 of the Act. The same has been
disclosed in Note 33 to the Standalone Financial Statements.
b) All amounts that are unspent under section (5) of section 135 of Companies Act,
pursuant to an ongoing project, has been transferred to special account in compliance of
with provisions of sub section (6) of section 135 of the said Act. The same has been
disclosed in Note 33 to the Standalone Financial Statements.
For P Murali& Co.,
Chartered Accountants
Firm Regn No. 007257S
A Krishna Rao
Partner
Membership No. 020085
UDIN: 23020085BGQXIO8903
Place: Hyderabad
Date: 29-05-2023
Annexure B
To the Auditors Report
"Annexure B" referred to in paragraph 2(e) under "Report on other legal
and Regulatory Requirements" section of report on Standalone Ind AS financial
statements of even date to the members of M/s. Balaxi Pharmaceuticals Limited on the
Standalone Ind AS financial statement for the year ended 31st march 2023.
Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section
143 of the Companies Act, 2013 (the Act)
We have audited the internal financial controls over financial reporting of Balaxi
Pharmaceuticals Limited (‘the Company) as of 31st March 2023 in
conjunction with our audit of the Standalone Ind AS financial statements of the Company
for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
issued by the Institute of Chartered Accountants of India (‘ICAI). These
responsibilities include the design, implementation and maintenance of adequate internal
financial controls that were operating effectively for ensuring the orderly and efficient
conduct of its business, including adherence to the Companys policies, the safeguarding
of its assets, the prevention and detection of frauds and errors, the accuracy and
completeness of the accounting records, and the timely preparation of reliable financial
information, as required under the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
(the ‘Guidance Note) and the Standards on Auditing, issued by ICAI and deemed to be
prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to
an audit of internal financial controls, both applicable to an audit of Internal Financial
Controls and, both issued by the Institute of Chartered Accountants of India. Those
Standards and the Guidance Note require that we comply with ethical requirements and plan
and perform the audit to obtain reasonable assurance about whether adequate internal
financial controls over financial reporting were established and maintained and if such
controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditors judgment, including the assessment of the risks of
material misstatement of the Standalone Ind AS financial statements, whether due to fraud
or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles including Indian Accounting Standards. A companys internal
financial control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the Company are being made only in
accordance with authorizations of the Management and directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the Companys 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 financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at 31 March 2023, based on the
internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
For P Murali& Co.,
Chartered Accountants
Firm Regn No. 007257S
A Krishna Rao
Partner
Membership No. 020085
UDIN: 23020085BGQXIO8903
Place: Hyderabad
Date: 29-05-2023
+91-9892691696
