To the Members of Alicon Castalloy Limited
REPORT ON THE AUDIT OF STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Alicon CastalloyLimited ("the Company") which comprise the Balance Sheet as at March 31 2020the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements").
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 March 31 2020 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
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 Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. Weare independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the independencerequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit 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 we do not provide a separateopinion on these matters. We have determined the matters described below to be the keyaudit matters to be communicated in our report.
|Sr. No. ||Key Audit Matter ||Auditor's Response |
|1 ||Property Plant & Equipment || |
| ||Valuation and existence of property plant and equipment including assessment of useful lives and residual values Property plant and equipment represents a significant proportion of the Company's asset base. The estimates and assumptions made to determine the carrying amounts including whether and when to capitalise or expense certain costs and the determination of depreciation charges are material to the Company's financial position and performance. The charges in respect of periodic depreciation are derived after estimating an asset's expected useful life and the expected residual value. Changes to asset's carrying amounts expected useful lives or residual value could result in a material impact on the financial statements and hence considered as key audit matter. ||Our audit approach consisted evaluation of design and implementation of controls and testing the operating effectiveness of the internal controls over valuation of property plant and equipment and review of useful lives; Periodic physical verification of property plant and equipment: |
| || || Review of CAPEX business process flow of documents/ information and their control's effectiveness |
| || || Substantive Tests on random sampling for all the major additions deletions to the assets by applying all the characteristics of capital expenditure proper classification of the same with reference to the company's policy and accounting standards |
| || || We performed substantive testing for the determination of assets' useful lives and residual values with reference to management's judgments including the appropriateness of past / existing asset lives and residual values applied in the calculation of depreciation. We also obtain certificates relating to useful lives of assets where required. |
| || || We have reviewed the policy and the procedure of physical verification of PPE. |
| || || As a result of the above procedures we did not identify any exceptions in relation to the Valuation and existence of property plant and equipment including assessment of useful lives and residual values which will affect our opinion. |
|2 ||Contingent Liability ||Our procedures included but were not limited to the following: |
| ||The Company is involved in indirect tax and other civil court litigations that are pending with various tax authorities. Whether a liability is recognized or disclosed as a contingent liability in the financial statements is inherently judgmental and dependent on assumptions and assessments. We placed specific focus on the judgements in respect to these demands against the Company. Determining the amount if any to be recognized or disclosed in the financial statements is inherently subjective. || Obtained an understanding from the management with respect to process and controls followed by the Company for identification and monitoring of significant developments in relation to the litigations including completeness thereof. |
| ||Therefore these litigations amount is considered to be a key audit matter. || Obtained the list of litigations from the management and reviewed their assessment of the likelihood of outflow of economic resources being probable possible or remote in respect of the litigations. |
| || || Assessed management's discussions held with their legal consultants and understanding precedents in similar cases; |
| || || Obtained and evaluated the managements representation from the company's internal dedicated team and consultant opinion wherever required representing the Company before the various authorities. Assessed and validated the adequacy and appropriateness of the disclosures made by the management in the financial statements. |
INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITOR'S REPORT THEREON
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report Corporate Governance andShareholder's Information but does not include the 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 during the course of our audit or otherwise appears to be materiallymisstated.
If based on the work we have performed we conclude that there is materialmisstatement of this other information we are required to report the 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 Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue 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 to cease operations or has norealistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE 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 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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness 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 standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
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 by the Central Government in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
2. As required by Section 143(3) of the Act based on our audit we report that: a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge 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 theCompany so far as it appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.
d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified 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 March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct.
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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
g) 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 remuneration paid by the Company to its directors during the year is inaccordance with the provisions of section 197 of the Act.
h) 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 as amended inour opinion and to the best of our information and according to the explanations given tous: i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements Refer Note 44 to the standalone financialstatements
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For Kirtane & Pandit LLP
Firm Registration No.105215W/W100057
Membership No.: 117309
Pune June 26 2020
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 ALICON CASTALLOY LIMITED of evendate)
i. In respect of the Company's property plant and equipment:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
(b) As explain to us considering the nature of the Fixed Asset the same have beenphysically verified by the management at reasonable intervals during the year as perverification plan adopted by the Company which in our opinion is reasonable havingregards to size of the Company and the nature of the its assets. According to informationand explanation give to us and the records produced to us for our verification there wereno discrepancies noticed during such physical verification;
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds comprising all the immovableproperties of land and buildings which are freehold are held in the name of the Company.
In respect of immovable properties been taken on lease and disclosed as property plantand equipment in the standalone financial statements the lease agreements are in the nameof the Company.
ii. As informed to us the physical verification of inventory has been conducted by themanagement at reasonable intervals and the discrepancies noticed during such physicalverification were not material. The discrepancies noticed on physical verification ofInventory as compared to the book records have been properly dealt with the Books ofAccount.
iii. The Company has not granted any loans secured or unsecured to Companies FirmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Companies Act. Accordingly paragraph 3(iii) of the Order is notapplicable.
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. The Company has with the provision of Section 186 of the Companies Act 2013 inrespect of investments guarantees and security.
v. In our opinion and according to the information and explanations given to us thecompany has complied with the directives of the Reserve Bank of India and the provision ofSections 73 to 76 of the Companies Act 2013 and the rules framed there under whereverapplicable. As informed to us no order has been passed against the Company by theCompany Law Board the National Company Law Tribunal RBI or any court or any tribunal.
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 paragraph 3(vi) of the Order is not applicable.
vii. According to the information and explanations given to us in respect of statutorydues:
(a) The Company has been generally regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Goods and Service TaxCustoms Duty Cess and other material statutory dues applicable to it with the appropriateauthorities.
There were no undisputed amounts payable in respect of Employees' State InsuranceIncome Tax Goods and Service Tax Customs Duty Cess and other material statutory dues inarrears as at March 31 2020 for a period of more than six months from the date theybecame payable except additional liability of Provident Fund amounting to Rs 21.44 lacs onaccount of Supreme Court's Judgement dated February 28 2019.
(b) Details of dues of Income Tax Sales Tax Service Tax Excise Duty and Value AddedTax which have not been deposited as at March 31 2020 on account of dispute are givenbelow:
Period(s) to which the amount relate
|Sr. No. ||Name of the statute ||Nature of the dues ||Amount involved ||Amount Paid || ||Forum where such dispute is pending |
| || || ||(Rs in Lacs) ||(Rs in Lacs) || || |
|1 ||Central Excise Act ||Central Excise Duty ||55.40 ||8.30 ||2008-09 ||C. Ex. Commissioner Pune (Call Book) |
|2 ||Custom Act ||Custom Duty & Interest ||2909.91 ||1687.42 ||2006-08 ||Directorate General of Central Excise Intelligence Mumbai |
|3 ||MVAT Act ||MVAT ||22.51 ||5.00 ||2009-10 ||Joint. Commissioner of Sales Tax Pune |
|4 ||Central Sales Tax & MVAT Act ||C-Form Liability ||81.07 ||5.00 ||2011-12 ||Dy. Commissioner of Sales Tax Pune |
|5 ||Central Sales Tax & MVAT Act ||C-Form Liability ||46.43 ||2.07 ||2012-13 ||Dy. Commissioner of Sales Tax Pune |
|6 ||Central Sales Tax & MVAT Act ||C-Form Liability ||261.88 ||14.06 ||2013-14 ||Dy. Commissioner of Sales Tax Pune |
|7 ||Central Sales Tax & MVAT Act ||C-Form Liability ||86.43 ||4.45 ||2014-15 ||Dy. Commissioner of Sales Tax Pune |
|8 ||Income tax Act 1961 ||IncomeTax ||43.65 ||43.66 ||2016-17 ||Dy. Commissioner of Income Tax Pune |
viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to banks. The Companydid not have any outstanding loans or borrowings from financial institutions or governmentand there are no dues to debenture holders during the year.
ix. In our opinion and according to the information and explanations given to us theterm loans taken by the Company have been applied for the purpose for which they wereraised. The Company had not raised money by way of further public offer (including debtinstruments) during the year.
x. According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.
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 theAct.
xii. The Company is not a Nidhi Company and hence reporting under paragraph 3 (xii) ofthe Order is not applicable to the Company.
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. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underparagraph 3(xiv) of the Order is not applicable to the Company.
xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him. Accordingly paragraph 3(xv) of the Order is notapplicable.
xvi. The Company is not required to be registered under section 45-I of the ReserveBank of India Act 1934.
For Kirtane & Pandit LLP
Firm Registration No.105215W/W100057
Membership No.: 117309
Pune June 26 2020
Annexure A' to the Independent Auditor's Report
(Referred to in paragraph 1(f) under Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Alicon Castalloy Limited of evendate)
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 2020 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.
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 that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective 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 Companies Act 2013.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 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 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 judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial reporting of the Company.
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.
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 the Company has in all material respects maintained adequate internalfinancial controls over financial reporting as of March 31 2020 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India and the Company's internal financial controls over financialreporting were operating effectively as of March 31 2020.
For Kirtane & Pandit LLP
Firm Registration No.105215W/W100057
Membership No.: 117309
Pune June 26 2020