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Alicon Castalloy Ltd.

BSE: 531147 Sector: Auto
NSE: ALICON ISIN Code: INE062D01024
BSE LIVE 15:40 | 09 Dec 378.25 -9.75
(-2.51%)
OPEN

385.00

HIGH

385.00

LOW

372.05

NSE LIVE 15:46 | 09 Dec 378.20 -6.10
(-1.59%)
OPEN

388.00

HIGH

390.00

LOW

375.25

OPEN 385.00
PREVIOUS CLOSE 388.00
VOLUME 64
52-Week high 491.00
52-Week low 242.20
P/E 18.42
Mkt Cap.(Rs cr) 463.73
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 385.00
CLOSE 388.00
VOLUME 64
52-Week high 491.00
52-Week low 242.20
P/E 18.42
Mkt Cap.(Rs cr) 463.73
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Alicon Castalloy Ltd. (ALICON) - Auditors Report

Company auditors report

To the Members

Alicon Castalloy Limited.

Report on the Financial Statements

1. We have audited the accompanying standalone financial statements of Alicon CastalloyLimited (‘the Company') which comprise the Balance Sheet as at March 31 2016 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements.

2. The Company's Board of Directors and its Management are responsible for the mattersstated in section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation of these financial statements that give a true and fair view of thefinancial position financial performance and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules2014 ("the Rules").

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other regularities; selection and applicationof appropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on these financial statements based onour audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

4. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements.

The procedures selected depend on the auditor's judgment including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlsrelevant to the Company's preparation of the financial statements that give true and fairview in order to design audit procedures that are appropriate in the circumstances. Anaudit also includes evaluating the appropriateness of accounting policies used and thereasonableness of the accounting estimates made by the Company's Board of Directors andits Management as well as evaluating the overall presentation of the financial statements.

5. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the financial statements.

Opinion

6. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March312016 and its profit and its cash flows for the year ended on that date.

7. Emphasis of Matter

(a) We draw attention to para (a) (b) & (c) of note 2.8 of the attached summary ofsignificant accounting policies in respect of ‘Depreciation and Amortisation':"The useful lives of some of its fixed assets & components followed by theCompany are different than the lives specified under part C of schedule II to theCompanies Act 2013. The useful lives of some of its assets particularly in case ofplant & machineries are as per its management estimate which considers the estimatedusage of assets for 24 hours a day and 365 days a year. The Company's management thereforebelieves and is of the view that the useful lives estimated by them best represent theperiod over which it expects to use these assets based on technical evaluation and thuswould not result in any additional amount of provision either on account of depreciationimpairment or otherwise."

In the absence of technical evaluation and impairment workings we have relied uponmanagement representations for the same.

(b) We draw attention to footnote**under Note15-‘Trade Receivables' of theattached financial statements: "The Company's management has confirmed that all tradereceivables are good and realisable in the ordinary course of the Company's business andno further provision is required over and above the amount already provided for in thebooks of account.''

We have relied upon management confirmation for recoverability or otherwise of debts incase of some account balances as customer reconciliations were not made available to us.

(c) We draw attention to footnote under Note 8-‘Trade Payables' of the attachedfinancial statements: ‘'The Company has no dues to suppliers covered under‘MSMED Act 2006.''

We have relied upon management confirmation for the list of suppliers covered under theAct dues payable to them etc.

(d) The provisions of the Company's Act 2013 as amended require the Company to complywith the various requirements under the Acts and the rules made and notifications issuedthere under from time to time. We are informed by the Company's management that theprovisions of the Acts have been complied with by the Company.

We are also informed that the secretarial auditor has been appointed by the Company toaudit the secretarial records and compliances made by the Company. We therefore have notextensively reviewed the secretarial & related compliances which the secretarialauditor would have covered in his report.

Our opinion is not modified respect of these matters.

8. Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of subsection (11) of Section 143 of the Act weenclose in "Annexure A" a statement on the matters specified in paragraphs 3and 4 of the Order.

As required by Section 143(3) of the Act we report that:

(a) Except for the matters described hereinafter and in annexures enclosed hereto andfor the reasons stated therein we have sought and obtained all the information andexplanations which to the best of our knowledge and belief were necessary for the purposesof our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

(c) The balance sheet the statement of profit and loss and the cash flow statementdealt with by this report are in agreement with the books of account.

(d) In our opinion the aforesaid financial statements comply in all materialrespects with the Accounting Standards specified under section 133 of the Act read withRule 7 Companies (Accounts) Rules 2014 as applicable.

(e) On the basis of written representations received from the Directors as on March312016 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2016 from being appointed as a Director in terms of section164 (2) of the Act.

(f) 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' enclosed herewith and

(g) With respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us :

i. The Company has in accordance with the generally accepted accounting practicedisclosed the impact of pending litigations on its financial position in its standalonefinancial statements - Refer sub-note 8 of Note 27- Part A Other Disclosures to thefinancial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses under the applicable law or accountingstandards.

iii. There has been no delay in transferring the principal amounts of unpaid dividendrequired to be transferred to the Investor Education and Protection Fund by the Company.

For Asit Mehta & Associates

Chartered Accountants

Registration No. 100733W

Sanjay S. Rane

Partner

Membership No.100374

Pune May 02 2016

Annexure A to the Independent Auditors’ Report

(Referred to in Paragraph 7 under the heading ‘Report on Other Legal andRegulatory Requirements of our report of even date on the financial statements of AliconCastalloy Limited (‘the Company') for the year ended March 31 2016)

Report on Companies (Auditor’s Report) Order 2016 ("the Order") issuedby the Central Government in terms of Section 143 (11) of the Companies Act 2013(‘the Act)

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we state that:

(i) (a) The Company has maintained records showing particulars including quantitativedetails and situation of its fixed assets. However it needs to be further improved asinter alia determination of useful lives of asset(s) and its component(s) impairmentparticulars etc. have remained to be completed reviewed and recorded as the case may beby the Company.

(b) According to the information and explanations given to us some of its fixed assetshave been physically verified by the Company's management during the year. We are informedthat discrepancies noticed during physical verifications have been properly dealt with inthe books of account. We have relied upon management representation.

(c) According to the information and explanations given to us and as per records of theCompany the title deeds of immovable properties as appearing in "Note 11 - FixedAssets" of the financial statements are held in the name of the Company.

(ii) The inventories comprising semi-finished goods raw materials stores and sparesetc. have been physically verified by the Company's management during the year. In ouropinion the frequency of verification is reasonable. As informed to us the discrepanciesnoticed on physical verification of inventory as compared to book records maintained forraw materials and stores and spares were not material and have been properly dealt with inthe account. Rather the closing inventory is established only on physical verification bythe Company's management.

(iii) In our opinion and according to the information and explanations given to us theCompany has not granted any loan secured or unsecured to companies firms or otherparties covered in the register maintained under section 189 of the Companies Act 2013.Accordingly the provisions of clause (iii) (a) (b) & (c) of paragraph 3 of the Orderare not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany does not have any transactions to which the provisions of section 185 of the Actapply. There are investments by the Company in its wholly owned subsidiaries outsideIndia appropriately disclosed under note 12 of the attached standalone financialstatements which along with guarantees provided by the Company in connection with loans bythe subsidiaries are within the limits prescribed under section 186 of the Companies Act2013 and accordingly the provisions of section 186 of the Companies Act 2013 have beencomplied with by the Company.

(v) The Company has not accepted any deposits from the public and does not haveunclaimed deposits within the meaning of the provisions of section 73 to 76 of theCompanies Act 2013 Act and rules framed there under. Accordingly the provisions ofclause (v) of paragraph 3 of the Order are not applicable to the Company.

(vi) According to the information and explanations given to us and in our opinionmaintenance of cost records has not been specified by the Central Government under subsection (1) of section 148 (1) of the Companies Act 2013 and the Companies (Cost Recordsand Audit) Rules 2014. Accordingly the provisions of clause (vi) paragraph 3 of theOrder are not applicable to the Company.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company is generally regular indepositing the amounts deducted / accrued in its books of account in respect of undisputedstatutory dues including provident fund income- tax service tax duty of customs dutyof excise sales-tax value added tax cess and other material statutory dues asapplicable to it to the appropriate authorities. As informed to us there are no duespayables on account employees' state insurance and local body tax and thus have not beenaccured in its books of account.

According to the records of the Company and according to the information andexplanations given to us no undisputed amounts payable in respect of statutory duesreferred above were in arrears as at March 31 2016 for a period of more than six monthsfrom the date those became payable.

(b) According to the information and explanations given to us there are no dues ofincome-tax service tax duty of customs duty of excise sales-tax value added tax cesswhich have not been deposited on account of any dispute other than those mentioned below.

Name of the statue / nature of dues Period to which the amount relates Amount involved (' in Lakhs) Forum where dispute is pending
Sales Tax/ MVAT 2007-08 80.95 The Joint Commissioner of Sales Tax (Appeals-F-002) Pune
Sales Tax/ MVAT 2007-08 818.84 The Joint Commissioner of Sales Tax (Appeals-F-002) Pune
Sales Tax/ MVAT 2008-09 8.22 Commissioner of Sales Tax (Appeals) Pune
Sales Tax/ MVAT 2009-10 57.65 Dy. Commissioner of Sales Tax Pune
Sales Tax/CST 2009-10 156.93 Dy. Commissioner of Sales Tax Pune
Central Excise Duty 2008-09 55.40 C.Ex. Commissioner Pune (Call Book)
Central Excise Duty 2002-03 6.88 C.Ex. Commissioner Pune (Call Book)
Income Tax 2009-10 18.74 Commissioner of Income Tax (Appeals) Mumbai.
Total 1203.61

(viii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the Company has not defaulted in repaymentof loans or borrowing to banks. There are no loans or borrowings from financialinstitutions or government and has not issued any debentures.

(ix) In our opinion and according to the information and explanations given to usmoneys raised by way of term loans by the Company have prima-facie been applied for thepurposes for which those were raised. The Company has not raised moneys raised by way ofinitial public offer or further public offer.

x) According to the information and explanations given to us and to the best of ourknowledge and belief no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the course of our audit.

(xi) According to the information and explanations given to us the managerialremuneration paid or provided in the Company's books is within the maximum ceilingprovided under Section 197 of the Act.

(xii) The Company is not the Nidhi Company and therefore the provisions of clause (xii)of paragraph 3 of the Order are not applicable to the Company.

(xiii) According to the information and explanations given to us and as per the recordsof the Company all transactions with the related parties are in compliance of withsection 177 and 188 of the Act where applicable and the details of which have beendisclosed in the financial statements etc as required by the applicable accountingstandards.

(xiv) In our opinion and according to the information and explanations given to us andas per the records of the Company the Company has not made preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review other than allotment of 1256222 shares issued to the shareholders of AtlasCastalloy Ltd. (the transferor Company) in the ratio of 121 fully paid equity shares of '5/-each for every 10 equity shares of ' 100/- each of the transferor Company videboard resolution dtd. 18.12.2015 in pursuance of the Scheme of Arrangement between AliconCastalloy Ltd.(the transferee Company) and Atlas Castalloy Ltd. (the transferor Company)as approved by the Bombay High Court vide its order dtd. 27.11.2015 and inter alia therequirements of section 42 the Companies Act have been complied with by the Company.

(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with the directors or persons connected with himand therefore the provisions of section 192 of the Companies Act 2013 are not applicableto the Company.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of clause (xvi) of paragraph 3 of theOrder are not applicable to the Company.

For Asit Mehta & Associates

Chartered Accountants

Registration No. 100733W

Sanjay S. Rane

(Partner)

Membership No.100374

Pune May 02 2016

Annexure B to the Independent Auditors’ Report

(Referred to in Paragraph 8 (f) of our report of even date on the financial statementsof Alicon Castalloy Limited (‘the Company') for the year ended March 31 2016)

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

We have audited the internal financial controls over financial reporting of AliconCastalloy Limited (‘the Company') as of March 31 2016 in conjunction with our auditof the financial statements of the Company for the year ended and as on that date.

Management’s Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘the Guidance Note'').

These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under 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 Standards on Auditing issued by ICAI and deemed to be prescribed under section143(10) of the Act and the Guidance Note to the extent applicable to an audit of internalfinancial controls over financial reporting. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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 controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

According to the information and explanations given to us and based on our audit thefollowing deficiencies & weaknesses have been identified in internal financialcontrols over financial reporting as at March 31 2016.

a) The existing rules policies and some of its business processes (includingsub-processes) of the Company have remained to be documented updated and strengthened tocover all components and facets of internal financial control reporting and all risks ofoperating the business.

b) Some of its processes (sub-processes) are manually driven and controlled barringsome which are automatically controlled with the use of system software. The scope existsfor an adequate and effective design of information technology (IT) general andapplication controls to provide the complete and accurate information consistent withfinancial reporting objectives and current needs of the organization.

c) The Company needs to improve upon the extent and frequency of physical verificationof its fixed assets and timely reconciliation with its book records so as to safeguard theCompany's assets from loss damage and misappropriation if any.

d) The Company needs to improve upon performing reconciliations of its significantaccounts like trade receivables on a frequent basis.

e) Segregation of duties needs to be further strengthen.

We are informed by the Company's management that the Company has taken effective stepsin improving its internal financial and operating controls by going for more sophisticatedand advanced ERP and related IT systems.

Opinion

In our opinion and to the best of our information and according to the explanationgiven to us the Company has except for the matters the stated above in all materialrespects an adequate internal financial controls system over financial reporting and suchinternal financial controls over financial reporting were operating effectively as atMarch 31 2016 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note.

For Asit Mehta & Associates

Chartered Accountants

Registration No. 100733W

Sanjay S. Rane

(Partner)

Membership No.100374

Pune May 02 2016

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