TO THE MEMBERS OF ALEMBIC LIMITED
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Financial Statements of Alembic Limited("the Company") which comprise the Balance Sheet as at 31st March2020 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year then ended andnotes to the Standalone Financial Statements including a summary of significantaccounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (the "Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31st March 2020 the profit andtotal comprehensive income changes in equity and its cash flows for the year ended onthat date.
Basis for Opinion
We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Companies Act 2013.Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India together with the independencerequirements that are relevant to our audit of the Standalone Financial Statements underthe provisions of the Companies Act 2013 and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the Standalone Financial Statements.
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. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Key Audit Matter ||Auditor's Response |
|1. Litigations Provisions and contingent liabilities ||Principal Audit Procedures |
|The Company has several litigations which also include matters under dispute which involves significant management judgement and estimates on the possible outcome of the litigations and consequent provisioning thereof or disclosure as contingent liabilities. ||As part of the audit process we obtained from the management details of matters under disputes including ongoing and completed tax assessments demands and other litigations. |
|Refer Note 23 32(B) and 32(M) to the Standalone Financial Statements. ||Our audit approach for the above consists of the following audit procedures: |
| || Evaluation and testing of the design of internal controls followed by the Company relating to litigations and open tax positions for direct and indirect taxes and process followed to decide provisioning or disclosure as Contingent Liabilities; |
| || Discussed with Company's legal team and taxation team for sufficient understanding of on-going and potential legal matters impacting the Company. |
| || We involved our internal expert to evaluate the management's underlying judgements in making their estimates with regard to such matters. |
Information other than the Standalone Financial Statement and Auditor's Report thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in Board's Reportincluding Annexures to that Board's Report Corporate Governance and Shareholder'sInformation but does not include the Standalone Financial Statements and our auditor'sreport 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 in 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. We havenothing to report 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 ofthese Standalone Financial Statements that give a true and fair view of the financialposition financial performance total comprehensive income changes in equity and cashflows of the Company in accordance with the Ind AS and other accounting principlesgenerally accepted in India including the accounting Standards specified under Section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Financial Statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error; In preparing the StandaloneFinancial Statements management is responsible for assessing the Company's ability tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless management either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso;
The Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities for the Audit of Standalone 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 scepticism 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 control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act 2013 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 management's 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 Company's ability to continue as a going concern. If we conclude that a material uncertainty exists we are required to draw attention in our auditor's 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 auditor's report. However future events or conditions may cause the Company to cease to continue as a going concern; |
| 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 financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards; From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the Standalone Financial Statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor's report unlesslaw or regulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest 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 by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act we report that:
|(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 the Statement of Profit and Loss (including other comprehensive income) the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account; |
|(d) In our opinion the aforesaid Standalone Financial Statements comply with the Accounting Standards specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014; |
|(e) On the basis of the written representations received from the directors as on 31st March 2020 taken on record by the Board of Directors none of the directors is disqualified as on 31st March 2020 from being appointed as a director in terms of Section 164(2) of the Act; |
|(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls refer to our separate Report in "Annexure B"; |
|(g) With respect to the other matters to be included in the Auditor's 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 the Act; and |
|(h) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of our information and according to the explanations given to us: |
|i. The Company has disclosed the impact of pending litigations on its financial position in its standalone financial statements |
| Refer Note 32 (B) to the Standalone Financial Statements; |
|ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses; |
|iii. There has been no delay in transferring amounts required to be transferred to the Investor Education and Protection Fund by the Company. |
For CNK & Associates LLP Chartered Accountants
Firm Registration No. 101961W/W-100036
Membership No.037391 Place: Mumbai Date: 25th May 2020 UDIN: 20037391AAAACF2506
Annexure "A" to the Independent Auditor's Report
Referred to in Para 1 Report on Other Legal and Regulatory Requirements' in ourIndependent Auditor's Report to the members of the Company on the Standalone FinancialStatements for the year ended 31st March 2020.
|I. (a) The Company has maintained proper records showing full particulars including quantitative details and situation of Fixed Assets; |
|(b) As informed to us the company has a phased programme of physical verification of its fixed assets so as to cover all assets once in three years. In accordance with this programme certain fixed assets were verified during the year and no material discrepancies were noticed on such verification. In our opinion this periodicity of physical verification is reasonable having regard to the size of the Company and the nature of its assets; |
|(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company the title deeds of immovable properties are held in the name of the Company; |
|II. As per the information and explanations given to us physical verification of inventory has been conducted at reasonable intervals by the management and no material discrepancies were noticed on physical verification; |
|III. According to the information and explanations given to us the Company has granted unsecured loan to one company covered in the register maintained under section 189 of the Companies Act 2013 in respect of which; |
|a) The terms and conditions of the grant of such loans are in our opinion prima facie not prejudicial to the Company's interest. |
|b) The schedule of repayment of principal and payment of interest has been stipulated and repayments or receipts of principal amounts and interest have been regular as per stipulations. |
|c) There is no overdue amount remaining outstanding as at the year-end. |
|IV. In our opinion and according to the information and explanations given to us the Company has complied with the provisions of Sections 185 and 186 of the Act in respect of grant of loans making investments and providing guarantees and securities as applicable; |
|V. In our opinion and as explained to us the Company has not accepted any deposits during the year and therefore the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed thereunder are not applicable to the Company; |
|VI. We have broadly reviewed the cost records maintained by the Company as prescribed by the Central Government under sub section |
|(1) of Section 148 of the Companies Act 2013 and are of the opinion that prima facie the prescribed cost records have been made and maintained by the Company. We have however not made a detailed examination of the cost records with a view to determine whether they are accurate or complete; |
|VII. According to the information and explanations given to us in respect of statutory dues: |
|(a) According to the information and explanations given to us and the records examined by us the Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund employees' state insurance income-tax Goods and Service Tax (GST) custom duty cess and other statutory dues and there are no undisputed statutory dues outstanding as at 31st March 2020 for a period of more than six months from the date they became payable; |
|(b) According to the information and explanations given to us and the records examined by us there are no dues of income tax sales tax wealth-tax service tax duty of customs duty of excise value added tax or cess that has not been deposited on account of disputes except the following: |
|Name of the statute ||Nature of dues ||Amounts (` ) ||Period to which the amounts relates ||Forum where dispute is pending |
|Central Sales Tax Act ||Central Sales Tax (Including interest and penalty thereon) ||8016782 ||2000-01 ||Joint commissioner Appeals |
|Central Sales Tax Act ||Central Sales Tax( Including interest and penalty thereon) ||1442264 ||2011-12 ||Joint commissioner Appeals |
|Central Sales Tax Act ||Central Sales Tax (Including interest and penalty thereon) ||1730797 ||2012-13 ||Joint commissioner Appeals |
|Central Excise Act 1944 ||Excise duty (Including interest and penalty thereon) ||4599749 ||2001-02 2005-09 2012-15 ||CESTAT |
VIII. Based on our audit procedure and according to the information and explanationgiven by the management we are of the opinion that the Company has not defaulted inrepayment of dues to financial institutions or banks Government or dues to debentureholders;
IX. According to the information and explanations given to us no moneys were raised byway of initial public offer or further public offer (including debt instruments) and theterm loans were applied for the purpose for which the loan were obtained during the year;
X. During the course of our examination of the books of account and records of theCompany carried out in accordance with the generally accepted auditing practices in Indiaand according to the information and explanations given to us we have neither came acrossany incidence of fraud on or by the Company noticed or reported during the year nor wehave been informed of any such case by the management;
XI. In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act;
XII. In our opinion and according to the information and explanation given to us theprovisions related to Nidhi Company are not applicable;
XIII. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the Standalone Financial Statements as required by theapplicable accounting standards;
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 under review;
XV. According to the information and explanation given to us and based on ourexamination of the records the Company has not entered into non-cash transactions withthe directors or persons connected with them. Hence the provisions of Section 192 of theAct are not applicable;
XVI. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
|For CNK & Associates LLP |
|Chartered Accountants |
|Firm Registration No. 101961W/W-100036 |
|Himanshu Kishnadwala |
|Membership No.037391 |
|Place: Mumbai |
|Date: 25th May 2020 |
|UDIN: 20037391AAAACF2506 |
Annexure "B" to the Independent Auditor's Report
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of ALEMBICLIMITED ("the Company") as of 31st March 2020 in conjunctionwith our audit of the Standalone Financial Statements of the Company for the year ended onthat 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 issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls with reference to financial statements of the Company that wereoperating effectively for ensuring the orderly and efficient conduct of its business 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 Companies Act 2013.
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 on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing prescribed under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls with reference to financial statements of thecompany were established and maintained and if such controls operated effectively in allmaterial respects.
Our audit involves performing procedures to obtain audit evidence about the internalfinancial controls with reference to financial statements of the company and theiroperating 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 judgment including the assessment of therisks of material misstatement of the Standalone Financial Statements whether due tofraud 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 controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an internal financial controls withreference to financial statements of the Company and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2020 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
|For CNK & Associates LLP |
|Chartered Accountants |
|Firm Registration No. 101961W/W-100036 |
|Himanshu Kishnadwala |
|Membership No.037391 |
|Place: Mumbai |
|Date: 25th May 2020 |
|UDIN: 20037391AAAACF2506 |