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Asahi Songwon Colors Ltd.

BSE: 532853 Sector: Industrials
NSE: ASAHISONG ISIN Code: INE228I01012
BSE 14:45 | 30 Jul 417.50 44.80
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NSE 14:39 | 30 Jul 417.90 45.60
(12.25%)
OPEN

371.00

HIGH

425.00

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OPEN 372.00
PREVIOUS CLOSE 372.70
VOLUME 27031
52-Week high 423.70
52-Week low 170.00
P/E 16.93
Mkt Cap.(Rs cr) 502
Buy Price 415.80
Buy Qty 4.00
Sell Price 416.65
Sell Qty 1.00
OPEN 372.00
CLOSE 372.70
VOLUME 27031
52-Week high 423.70
52-Week low 170.00
P/E 16.93
Mkt Cap.(Rs cr) 502
Buy Price 415.80
Buy Qty 4.00
Sell Price 416.65
Sell Qty 1.00

Asahi Songwon Colors Ltd. (ASAHISONG) - Auditors Report

Company auditors report

To the Members of

Asahi Songwon Colors Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying standalone financial statements of Asahi SongwonColors Limited (the ‘Company') which comprise the Balance Sheet as at March 31 2019the Statement of Profit and Loss (including other comprehensive income) Statement ofChanges in Equity and Statement of Cash Flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as “standalone financialstatements”).

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 true andfair view in conformity with the Indian Accounting Standards prescribed under Section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended(‘Ind AS') and other accounting principles generally accepted in India of the stateof affairs of the Company as at March 31 2019 its profit total comprehensive incomechanges in equity and its cash flows for the year then ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) as specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with the‘Code of Ethics' issued by Institute of Chartered Accountants of India (ICAI)together with the ethical requirements that are relevant to our audit of the financialstatements under the provisions of the Act and the Rules there under and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

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 financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

KEY AUDIT MATTER RESPONSE TO KEY AUDIT MATTER
Property Plant & Equipment
The value of property plant & equipment and capital work-in-progress amounted to Rs 15152.66 Lakhs (i.e. 49.03% of total assets) at the Balance Sheet Date March 31 2019. We tested controls in place over the property plant & equipment cycle evaluated the appropriateness of capitalization policies performed tests of details on costs capitalized and assessed the timeliness of capitalization from capital work-in-progress. We also reviewed the appropriateness of estimated useful lives applied in the calculation of depreciation.
There are a number of areas where management judgement impacts the carrying value of property plant and equipment and capital work-in- progress and their respective depreciation profiles. These include :
– the decision to capitalize or expense costs;
– review of estimated useful lives of assets;
– the timeliness of transfers to property plant & equipment from capital work-in-progress.
Investment
The company carries its investments in its listed and unlisted company at fair value. As at March 31 2019 total investments amounted to Rs 1417.48 Lakhs and represent 4.59% of total assets. Further disclosures on the investments are given in Note No. 5. Our audit procedures included updating our understanding of the processes employed by the company for accounting for and valuing their investment portfolio.
The fair value exercise involves the use of estimates and judgements specifically in respect of unquoted Equity Shares which are carried at amortized cost for startup company as well as at fair value through Other Comprehensive Income (FVOCI). Other investments in equity shares of company carried at fair value through Other Comprehensive Income (FVOCI) were listed on stock exchanges and hence quoted market prices were readily available for fair valuation. We reviewed the valuation methods used and discussed with the management regarding the reasonableness of the basis and assumptions used in respect of valuation of unquoted investments. We cross-checked valuation of quoted investments with market rates at the year end.

INFORMATION OTHER THAN FINANCIAL STATEMENTS & AUDITORS REPORT THEREON

The Company's Board of Directors is responsible for the Other Information.

The Other Information comprises the information included in the Board's Reportincluding Annexure to Board's Report and Management Discussion & Analysis (but doesnot include the standalone financial statements and our auditor's report thereon). TheOther Information is expected to be made available to us after the date of this auditorsreport.

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 identified above and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the other information if we conclude that there is a materialmisstatement therein we are required to communicate the matter to those charged withgovernance as required under SA 720 ‘The Auditor's responsibilities Relating to OtherInformation'.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIAL 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 includingother comprehensive income changes in equity and cash flows of the Company in accordancewith the Ind AS and accounting principles generally accepted in India. The responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgement and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively or ensuring accuracy and completeness of the accounting recordsrelevant to the preparation and presentation of the standalone financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

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 also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone 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 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 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 standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override 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.

Evaluate the appropriateness of accounting polices used and the reasonableness ofaccounting estimates and related disclosures made by the management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 exists we are required to draw attention inour auditor's report to the related disclosures in the standalone financial statements orif such disclosures are inadequate to modify our opinion. Our conclusions are based onthe audit evidence obtained up to the date of our auditor's report. However future eventsor conditions may cause the Company to cease to continue as a going concern.

Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone 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 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

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 thematters specified in paragraphs 3 and 4 of the Order to the extent applicable .

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 bestof our knowledge and belief are necessary for the purpose 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 books of account.

(d) In our opinion the aforesaid Standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312019 from being appointed as a director in terms of Section 164(2) of theAct.

(f ) With respect to the adequacy of internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to orseparate report in “Annexure B” to this Report .

(g) With respect to the other matters to be included in the Auditors Report inaccordance with requirements of Section 197(16) of the Act as amended in our opinion andto the best of our information and according to the explanations given to us theremuneration paid/provided by the Company to its Directors during the year is inaccordance with the provisions of Section 197.

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditor's) Rule 2014 in our opinionand 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 the financialposition of its financial statements – Refer Note 38 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 the amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For Mahendra N. Shah & Co.
Chartered Accountants
ICAI Firm Registration Number: 105775W
Chirag M. Shah
Date: May 14 2019 Partner
Place: Ahmedabad Membership Number : 045706

“ANNEXURE A” TO THE INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 1 under the heading ‘Report on Other Legal &Regulatory Requirements' of our report of even date to the financial statements of theCompany for the year ended March 31 2019:

1. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has regular programme of physical verification of by which all FixedAssets are verified in phased manner over period of three years. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and nature of its assets. According to information and explanation given to us nomaterial discrepancies were noticed on such verification

(c) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable propertiesincluded in property plant and equipment are held in the name of company.

2. According to information and explanation given to us the physical verification ofinventory has been conducted at reasonable intervals during the year. No materialdiscrepancies were noticed on such physical verification.

3. According to information and explanation given to us the Company has not grantedany loans secured or unsecured to companies firms Limited Liability partnerships orother parties covered in the Register maintained under section 189 of the Act.Accordingly the provisions of clause 3 (iii) (a) (b) and (c) of the Order are notapplicable to the Company and hence not commented upon.

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Companies Act2013in respect of Investment. The Company has not granted loan given guarantee or providedsecurity as provided in the section 185 and 186 of the Companies Act 2013.

5. According to information and explanation given to us the Company has not acceptedany deposits from the public in accordance with the provisions of Sections 73 to 76 or anyother relevant provisions of the Act and the rules framed thereunder. Accordingly theprovisions of clause 3 (v) of the Order are not applicable to the Company and hence notcommented upon.

6. The Central Government has prescribed maintenance of Cost Records under section148(1) of the Companies Act 2013 in respect of manufacturing activities of the Company.We have broadly reviewed the accounts and records of the Company in this connection andare of the opinion that prima facie the prescribed accounts and records have been madeand maintained. We have however not made a detailed examination of the said records witha view to determine whether they are accurate or complete.

7. According to information and explanations given to us in respect of statutory duesand on the basis of our examination of the books of account and records :

(a) the Company has been generally regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance Income Tax Goods & Service TaxDuty of Customs Cess and any other statutory dues with the appropriate authorities.According to the information and explanations given to us no undisputed amounts payablein respect of the above statutory dues were in arrears as at March 31 2019 for a periodof more than six months from the date on when they become payable.

(b) According to the information and explanations given to us there are no materialdues of Income Tax Sales Tax Service Tax Goods & Service Tax and Customs Duty whichhave not been deposited with the appropriate authorities on account of any dispute.

8. According to the information and explanations given by the management the Companyhas not defaulted in repayment of loan or borrowing to financial institution bankgovernment or dues to debenture holders.

9. According to the information and explanations given by the management the Companyhas not raised moneys by way of initial public offer or further public offer includingdebt instruments during the year and the term loans were applied for the purpose for whichthey are raised.

10. According to the information and explanations given by the management we reportthat no fraud by the Company or no fraud on the Company by its officers or employees ofthe Company has been noticed or reported during the year.

11. According to the information and explanations given to us the managerialremuneration has been paid or provided in accordance with the requisite approvals mandatedby the provisions of Section 197 read with Schedule V to the Companies Act.

12. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3 (xii) of the Order are not applicable to the Company.

13. In our opinion all transactions with the related parties are in compliance withsection 177 and 188 of Companies Act 2013 and the details have been disclosed in theStandalone Financial Statements as required by the applicable Indian accounting standards.

14. According to the information and explanations given by the management the Companyhas not made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review. Accordingly the provisions of clause3 (xiv) of the Order are not applicable to the Company and hence not commented upon.

15. According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim. Accordingly the provisions of clause 3 (xv) of the Order are not applicable to theCompany and hence not commented upon.

16. In our opinion the Company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company and hence not commented upon.

For Mahendra N. Shah & Co.
Chartered Accountants
ICAI Firm Registration Number: 105775W
Chirag M. Shah
Date: May 14 2019 Partner
Place: Ahmedabad Membership Number : 045706

Annexure ‘B'

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (1) OF SUB-SECTION 3 OF SEC.143OF THE COMPANIES ACT 2013(“THE ACT”)

We have audited the internal financial controls over financial reporting of AsahiSongwon Colors Limited (“the Company”) as of March 31 2019 in conjunction withour audit of the financial statements of the Company for the year ended 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

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 Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the “Guidance Note”) and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofinternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls systems 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 purpose 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 authorizations ofmanagement and directors of the Company and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

I NHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLSO VER 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 of procedures may deteriorate.

OPINION

In our opinion to the best of our information and according to explanations given tous the Company has in all material respects an adequate internal financial controlsystem over financial reporting and such internal financial controls over financialreporting were operating effectively as on March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal controls stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reports issued by the Institute of Chartered Accountants of India.

For Mahendra N. Shah & Co.
Chartered Accountants
ICAI Firm Registration Number: 105775W
Chirag M. Shah
Date: May 14 2019 Partner
Place: Ahmedabad Membership Number : 045706

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