To The Members of Amal Ltd
Report on the audit of the Financial Statements
We have audited the accompanying Financial Statements of Amal Ltd (the Company) whichcomprise the Balance Sheet as at March 31 2020 and the Statement of Profit and Loss(including other comprehensive income) the Statement of Cash Flows and the Statement ofchanges in equity for the year then ended and a summary of significant policies and otherexplanatory information.
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 theCompanies Act 2013 (the Act) in the manner so required and give a true and fair view inconformity with the Indian Accounting Standards prescribed under Section 133 of the Actread with the Companies (Indian Accounting Standards) Rules 2015 as amended (Ind AS)and other accounting principles generally accepted in India of the state of affairs ofthe Company as at March 31 2020 and its profit total comprehensive income its cashflows and the changes in equity for the year ended on that date.
Basis for opinion
We conducted our audit of the Financial Statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibility for the audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of theFinancial Statements under the provisions of the Act and the Rules made thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence obtained by us issufficient and appropriate to provide a basis for our audit opinion on the FinancialStatements.
Key audit matter
Key audit matter is a matter that in our professional judgement was of mostsignificance in our audit of the Financial Statements of the current period. This matterwas addressed in the context of our audit of the Financial Statements as a whole and informing our opinion thereon and we do not provide a separate opinion on this matter. Wehave determined the matter described below to be the key audit matter to be communicatedin our report.
|Key audit matter ||Auditor's response |
|Revenue from sale of goods to holding company ||Our procedures included but were not limited to: |
|Significant Company is generated through sale of goods to its holding company. Occurrence of such transactions and their pricing on an arm's length basis were significant ||- Obtaining a detailed understanding of the processes controls and policies of the Management with respect to related party transactions. |
| ||- Evaluation of the design of controls including approvals and related compliances. |
| ||- Testing implementation and operating effectiveness of the controls that address risks relating to the occurrence and the pricing. |
| ||- Performing following procedures on the samples selected: |
| || Reading and verificationof the terms of the purchase orders. Performing corroborative inquiries for the business rational on pricing and relevant terms and conditions including sighting evidences of transaction of similar products on identical terms with unrelated parties. |
| || Verifying necessary approvals as per the authorisation matrices. |
| || Verifying documentary evidences around deliveries and subsequent realisation and obtaining balance confirmations |
| || Performing analytical procedures and trend analysis. |
| ||- Assessing adequacy and appropriateness of the disclosures in the Financial Statements. |
Information other than the Financial Statements and Auditor's Report thereon
The Board of Directors of the Company is responsible for the other information. Theother information comprises the information included in the letter to shareholdersCorporate profile Directors' Report and its annexure Management Discussion and AnalysisCorporate Governance
Report and Performance trend but does not include the Financial Statements and ourAuditor's Report thereon.
Our opinion on the Financial Statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the Financial Statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the Financial Statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on the workwe have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Management's responsibility for the Financial Statements
The Board of Directors of the Company is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Financial Statements that givea true and fair view of the financial position financial performance including for andother comprehensive income cash changes in equity of the Company in accordance with theInd AS and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements 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.
In preparing the Financial Statements the Management is responsible for assessing theability of the Company to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless theManagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the financial reportingprocess of the Company.
Auditor's responsibility for the audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the FinancialStatements as a whole are free from material misstatement whether due to fraud or errorand to issue an Auditor's Report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these 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 Financial Statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override We of internal control.
Obtain an understanding of internal financial control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls. deficiencies Evaluate the appropriateness of accounting policies used andthe reasonableness of accounting estimates and related disclosures made by the Management.
Conclude on the appropriateness of use of the going concern basis of accounting by theManagement and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant the Company to continueas a going concern. If we conclude that a material uncertainty exists we are required todraw attention in our Auditor's Rport to the related disclosures in the FinancialStatements or if such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our Auditor's Report. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the Financial Statementsincluding the disclosures and whether the Financial Statements represent the underlyingtransactions 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. 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 in internal control that we identify during our audit. We also provide thosecharged with governance with a statement that we have complied with relevant ethicalrequirements regarding independence and to communicate with them all relationships andother matters that may reasonably be thought to bear on our independence and whereapplicable related safeguards. From the matters communicated with those charged withgovernance we determine those matters that were of most significance in the audit of theFinancial Statements of the current period and is therefore the key audit matter. Wedescribe these matters in our Auditor's Report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on other legal and regulatory requirements
1. As required by Section 143(3) of the Act based on our audit we report to theextent applicable that:
a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion 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 the Statement of Cash Flow and the Statement of changes in equity dealt with bythis Report are in agreement with the relevant books of account.
d) In our opinion the aforesaid Financial Statements comply with the Ind AS specifiedunder Section 133 of the Act.
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 A. Our report expresses an unmodified opinion on the adequacyand operating effectiveness of the Company's internal financial controls over financialreporting.
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 opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its Directors during the year is in accordance withthe 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;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016 (the Order) issued bythe Central Government in terms of Section 143(11) of the Act we give in Annexure B astatement on the matters specified in paragraphs 3 and 4 of the Order. Annexure A to theIndependent Auditor's Report (Referred to in paragraph 1(f) under Report on otherlegal and regulatory requirements' section of our report of even date.)
Report on the internal financial controls over financial reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the Act)
We have audited the internal financial controls over financial reporting of Amal Ltd(the Company) as of March 31 2020 in conjunction with our audit of the FinancialStatements of the Company for the year ended on that date.
Management's responsibility for internal financial controls
The Management of the Company 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 Reporting (theGuidance Note) 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 policies of the Company the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting based on our audit. We conducted our audit in accordance with theGuidance Note issued by the Institute of Chartered Accountants of India and the Standardson Auditing prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively 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 judgment of the Auditors 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 internal financial control systems overfinancial reporting of the Company.
Meaning of internal financial controls over financial reporting
Internal financial controls over financial reporting of a company 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. Internal financial control over financial reportingincludes those policies and procedures that
i) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
ii) 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 authorisations of Management and Directors of the Company; and
iii) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the assets of the Company that could havea 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 controlsover 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 adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2020 based on the criteria forinternal financial controls over financial reporting 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.
|Firm registration number: 117366W W-100018 ||For Deloitte Haskins & Sells LLP |
| ||Chartered Accountants |
| ||Samir R. Shah |
| ||Partner |
|Mumbai ||Membership number: 101708 |
|April 23 2020 ||UDIN: 20101708AAAABF6262 |
Annexure B to the Independent Auditor's Report (Referred to in paragraph 2 underReport on other legal and regulatory requirements' Section of our report of evendate)
i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) Fixed assets were physically verified during the year by the Management inaccordance with a regular program of verification for physical verification assets atreasonable intervals. According to the information and explanation given to us nomaterial discrepancies were noticed on such verification
c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed transfer deed conveyancedeed provided to us we report that the title deeds comprising all the immovableproperties are held in the name of the Company as at the Balance Sheet date except forthe following land and buildings:
|Particulars of the land and building ||Gross Block as at March 31 2020 ||Net Block as at March 31 2020 ||Remarks |
| ||(Rs. in lakh) ||(Rs. in lakh) || |
|Freehold land at Ankleshwar ||3.33 ||3.33 ||The title deeds are in the name of Amal Products Limited former name of the Company. |
|Building (residential flat) at Atul ||2.32 ||2.06 || |
|Building (residential flats) at Ankleshwar ||8.38 ||7.43 ||The title deeds are in the name of Amal Rasayan Limited former name of the Company. |
In respect of immovable properties of land and buildings that have been taken on leaseand disclosed as fixed asset in the Financial Statements the lease agreements are in thename of the Company where the Company is the lessee in the agreement.
ii) As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals and no material discrepancies were noticed on physicalverification
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 2013 (the Act).
iv) The Company has not granted any loans made investments other than in mutual fundsand fixed deposits or provided guarantees and hence reporting under Clause (iv) of theOrder is not applicable.
v) According to the information and explanations given to us the Company has notaccepted any deposit during the year hence reporting under Clause
(v) of the Order is not applicable. vi) The maintenance of cost records has not beenspecified by the Central Government under Section 148(1) of the Company's Act 2013.
vii) According to the information and explanations given to us in respect of statutorydues:
a) The Company has generally been regular in depositing undisputed statutory dues ofthe year including provident fund (other than provident fund on certain allowances basedon order of the Honourable Supreme Court of India dated February 28 2019 in response tovarious civil appeals of other organisations and according to information andexplanations given to us which is under evaluation by the Management) employees' stateinsurance income tax customs duty cess goods and service tax
b) There were no undisputed amounts payable in respect of provident fund payable (otherthan provident fund on certain allowances mentioned above) employees' state insuranceincome tax customs duty cess goods and service tax and other material statutory dues inarrears as at March 31 2020 for a period of more than six months from the date theybecame.
c) There are no disputed dues of income tax and goods and services tax which have notbeen deposited as on March 31 2020. Details of dues of sales tax which have not beendeposited as on March 31 2020 on account of disputes are given below:
|Name of statute ||Nature of dues ||Forum where dispute is pending ||Period to which the amount relates ||Amount (Rs. in lakh) |
|The Gujarat Sales Tax Act 1969 ||Sales tax (including interest and penalty) ||High Court of Gujarat ||1999-00 ||10.39 |
|The Gujarat Sales Tax Act 1969 ||Sales tax (including interest and penalty) ||Joint Commissioner Surat ||2001-02 to 2003-04 ||52.47 |
|CST Act 1956 ||Sales tax (including interest and penalty) ||Gujarat Value Added Tax Tribunal Ahmedabad ||2003-04 ||3.31* |
|Gujarat Value Added Tax 2003 ||Value Added Tax ||Gujarat Value Added Tax Commissioner Surat ||2015-16 ||0.75 |
*net of Rs. 50000 paid under protest
viii) The Company has not taken any loans or borrowings from financial institutionsbanks and government or has not issued any debentures. Hence reporting under Clause
(viii) of the Order is not applicable to the Company.
ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under Clause (ix) ofthe Order is not applicable to the Company.
x) To the best of our knowledge and according to the information and explanations givento us no fraud by the Company and no material fraud on the Company by its officers oremployees has been noticed or reported during the year.
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.
ii) The Company is not a Nidhi Company and hence reporting under Clause (xii) of theOrder is 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 Act where applicable for alltransactions with the related parties and the details of related party transactions havebeen disclosed in the Financial Statements etc as required by the applicable accountingstandards.
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 underClause (xiv) of\ CARO 2016 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 Directors of the holding subsidiary or associate company or personsconnected with them and hence provisions of Section 192 of the Act are not applicable.
xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
|Firm Registration number: 117366W W-100018 ||For Deloitte Haskins & Sells LLP |
| ||Chartered Accountants |
| ||Samir R. Shah |
| ||Partner |
|Mumbai ||Membership number: 101708 |
|April 23 2020 ||UDIN: 20101708AAAABF6262 |