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Associated Alcohols & Breweries Ltd.

BSE: 507526 Sector: Consumer
NSE: ASALCBR ISIN Code: INE073G01016
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OPEN 456.95
PREVIOUS CLOSE 453.80
VOLUME 5525
52-Week high 556.95
52-Week low 380.05
P/E 14.07
Mkt Cap.(Rs cr) 807
Buy Price 0.00
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Sell Price 0.00
Sell Qty 0.00
OPEN 456.95
CLOSE 453.80
VOLUME 5525
52-Week high 556.95
52-Week low 380.05
P/E 14.07
Mkt Cap.(Rs cr) 807
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Associated Alcohols & Breweries Ltd. (ASALCBR) - Auditors Report

Company auditors report

To the Members of

Associated Alcohols & Breweries Limited

Report on the Audit of the Financial Statements Opinion

We have audited the accompanying financial statements of AssociatedAlcohols & Breweries Limited ("the Company") which comprise the BalanceSheet as at March 31 2022 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the financial statements including a summary ofsignificant accounting policies and other explanatory information (hereinafter referred toas the "Financial Statement").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid 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 2022 its profit including othercomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the financial statements in accordance withthe Standards on Auditing (SAs) as 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 bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI?s Code of Ethics.We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Financial Statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the Financial Statements for the financial yearended March 31 2022. These matters were addressed in the context of our audit of thefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below as Keyaudit matters and for each matter our description of how our audit addressed the matteris provided in that context.

Key audit matters How our audit addressed the key audit matter
Inventory verification and existence
The company deals with various types of bulk material & Finished goods such as Spirit Liquor Grains etc. The company has inventory of Finished Goods & Raw materials at various locations amounting to Rs. 4593.55 Lakhs as at March 31 2022 as detailed in Notes 13 to the financial statements. Our procedures included the following:
Obtained a detailed understanding and evaluated the design and implementation of controls that the Company has established in relation to inventory valuation and existence.
We have observed the physical verification of significant inventories count for certain locations by management at year end. The company has also involved an independent Firm of Chartered Accountants for physical verification of significant inventories count for certain locations before the year end and we have applied the forward procedure as an alternative procedure and thus assessed the adequacy of controls over the existence of inventories.
Inventories valuation and existence has been determined to be a key audit matter as inventories may be held for long periods of time at various locations before being sold and thus makes it vulnerable to obsolescence. This could result in an overstatement of the value of the inventories if the cost is higher than the net realisable value. Further the measurement of these inventories involved certain estimations/assumption and also involved volumetric measurements.
Obtained statutory certificates confirming the stock lying at various locations.
We have reviewed the report submitted by external agency and obtained reasons/explanation for such differences and also confirmed the adjustment made by the company in accordance with the policy confirmed by the board of directors.
Evaluated management judgment with regards to the application of provisions for obsolescence to the inventories.
Disclosure of Contingency litigation & Taxation
The Company is exposed to different laws regulations and interpretations thereof. The company is also subject to number of significant claims litigations regulatory including Income tax {refer note no.45.1} and various matters require legal interpretation that arise from time to time in the ordinary course of business. The assessment of the likelihood and quantum of any liability in respect of these matters can be judgmental due to the uncertainty inherent in their nature. The Company is required to assesses the need to make provision or disclose a contingency on a case-to-case basis considering the underlying facts of each litigation. Our audit procedures included among others:
Understanding and assessing the internal control environment relating to the identification recognition and measurement of provisions for disputes potential claims and litigation and contingent liabilities;
Analysed significant changes/update from previous periods and obtained a detailed understanding of such items. Assessed recent judgments passed by the court authorities affecting such change;
Discussed the status of significant known actual and potential litigations with the management & noted that information placed before the board for such cases and
We have considered this to be a key audit matter since the accounting and disclosure of claims and litigations is complex and judgmental and the amounts involved are or can be material to the financial statements.
Assessment of the management?s assumptions and estimates related to the recognized provisions for disputes and disclosures of contingent liabilities in the financial statements.

Information other than the Financial Statements and Auditor?sReport thereon

The Company?s Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board?s Report includingAnnexures to Board?s Report Business Responsibility Report Corporate Governance andShareholder?s Information but does not include the financial statements and ourauditor?s report thereon. Our opinion on the Financial Statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the Financial Statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained 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 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 forthe Financial Statements

The Company?s Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these FinancialStatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation 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 financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the Financial Statements management is responsible forassessing the Company?s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Those Board of Directors arealso responsible for overseeing the Company?s financial reporting process.

Auditors? Responsibility for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether theFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditors? report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these Financial Statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the 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 control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3) (i) of the Companies Act 2013 we are also responsible for expressing our opinionon whether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls;

Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management;

Conclude on the appropriateness of management?s use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany?s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor?s report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor?s report. However future events or conditions may cause theCompany to cease to continue as a going concern; and

Evaluate the overall presentation structure and content of theFinancial Statements including the disclosures and whether the Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the FinancialStatements of the current period and are therefore the key audit matters. We describethese 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 the Companies (Auditor?s Report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of Section 143 of the Companies Act 2013 we give in the "Annexure A" astatement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.

2. Further to our comments in the annexure referred to in the paragraphabove as required by Section 143(3) of the Act we report that:

a. We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

b. In our opinion proper books of account as required by law have beenkept 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 OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the relevant books of account;

d. In our opinion the aforesaid financial statements comply with theIndian Accounting Standards prescribed under section 133 of the Act read with Companies(Indian Accounting Standards) Rules 2015 as amended;

e. On the basis of the written representations received from thedirectors as on 31st March 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2022 from being appointed as a director interms of Section 164(2) of the Act;

f. With respect to the adequacy of the internal financial controls withreference to financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B". Our report expresses anunmodified opinion on the adequacy and operating effectiveness of the Company?sinternal financial controls with reference to financial statements;

g. With respect to the other matters to be included in theAuditor?s Report in accordance with the requirements of the section 197(16) of theAct as amended in our opinion and to the best of our information and according to theexplanation given to us the remuneration paid / provided by the company to its directorsfor the year ended March 31 2022 is in accordance with the provisions of section 197 ofthe Act read with Schedule V of the Act.

h. With respect to the other matters to be included in theAuditor?s Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and accordingto the explanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements as stated in Note 45 to the financialstatement;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

iv. (a). The Management has represented that to the best of itsknowledge and belief as disclosed in Note 65 to the financial statements no funds havebeen advanced or loaned or invested (either from borrowed funds or share premium or anyother sources or kind of funds) by the Company to or in any other person(s) orentity(ies) including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the Intermediary shalldirectly or indirectly lend or invest in other persons or entities identified in anymanner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") orprovide any guarantee security or the like on behalf of the Ultimate Beneficiaries.

(b). The Management has represented that to the best of its knowledgeand belief as disclosed in Note 65 to the financial statements no funds have beenreceived by the Company from any person(s) or entity(ies) including foreign entities("Funding Parties") with the understanding whether recorded in writing orotherwise that the Company shall directly or indirectly lend or invest in other personsor entities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries.

(c). Based on the audit procedures performed that have been consideredreasonable and appropriate in the circumstances nothing has come to our notice that hascaused us to believe that the representations under subclause (i) and (ii) of Rule 11(e)as provided under (a) and (b) above contain any material misstatement. v. The dividendproposed in the previous financial year declared and paid by the Company during the yearis in accordance with Section 123 of the Act as applicable. vi. As stated in Note 61 tothe financial statements the Board of Directors of the Company has proposed dividend forthe year which is subject to the approval of the members at the ensuing Annual GeneralMeeting. The dividend proposed is in accordance with section 123 of the Act asapplicable.

Annexure "A" to the Independent Auditor?s Report

(Referred to our report of even date to the members of AssociatedAlcohols & Breweries Limited as at and for the year ended March 31 2022)

In terms of the information and explanations sought by us and given bythe Company and the books of account and records examined by us in the normal course ofaudit and to the best of our knowledge and belief we state that: i. a. A. The Company hasmaintained proper records showing full particulars including quantitative details andsituation of Property plant and equipment.

B. The Company has maintained proper records showing full particularsof Intangible assets.

b. The Company has a program of physical verification of its propertyplant and equipment in a phased manner over a period of 3 years which in our opinion isreasonable having regard to the size of the Company and the nature of its property plantand equipment. Pursuant to the program certain property plant and equipment werephysically verified by the Management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.

c. According to the information and explanations given to us and on thebasis of our examination of the records of the Company the title deeds of immovableproperties at the balance sheet date are held in the name of the Company.

d. The Company has not revalued its Property plant and equipment(including Right-of-use assets) and Intangible assets during the year.

e. According to the information and explanations given to us and on thebasis of our examination of the records of the Company there are no proceedings initiatedor pending against the Company for holding any benami property under the BenamiTransactions (Prohibition) Act 1988 (45 of 1988) and rules made thereunder.

ii. a. The inventories of the Company except for materials in transitand finished goods lying with third parties have been physically verified by themanagement and/or by an independent agency. For stocks lying with third parties at theyear-end written confirmations have been obtained and in respect of goods-in-transitsubsequent goods receipts have been verified or confirmations have been obtained from theparties. In our opinion the frequency of such verification is reasonable and procedureand coverage as followed by the management was appropriate. No discrepancies were noticedon verification between the physical stocks and the book records that were 10% or more inthe aggregate for each class of inventory.

b. According to the information and explanations given to us and on thebasis of our examination of the records of the Company the Company has been sanctionedworking capital limits in excess of five crore rupees in aggregate from the banks on thebasis of security of current assets. In our opinion the quarterly returns or statementsfiled by the Company with such banks are in agreement with the books of account of theCompany for the respective quarters except for the following quarter (refer note no 27.4of the financial statements):

Quarter Ending Particulars Amount as per books of accounts Amount reported in quarterly statement Variance Reason for Variance
June 2021 Current Assets 19689.00 19887.00 (198.00) Because of provisional figures reported to banks earlier to finalisations of quarterly accounts.
Current Liabilities 5274.00 5863.00 (589.00)

iii. a. According to the information and explanations given to us andon the basis of our examination of the records of the Company the Company has not madeinvestment in granted any loans or advances in the nature of loans or stood guaranteeor provided any security secured or unsecured to any Companies firms limited liabilitypartnerships or any other parties during the year except for granting loans to twoparties during the year details of which are stated below.

Particulars Amount (Rs. in lakhs)
Aggregate amount during the year 400.00
Balance outstanding as at balance sheet date 400.00

b. In our opinion and based on the audit procedures conducted by usthe terms and conditions of the loans granted during the year are prima facie notprejudicial to the interest of the Company.

c. In respect of loans granted by the company during the year theschedule of repayment of principal and interest has been stipulated. The loans andinterest thereon were not due for repayment at the balance sheet date.

d. In respect of loans granted by the company there is no overdueamount remaining outstanding as at the balance sheet date.

e. No loans granted by the company has fallen due during the yearhence the reporting under this clause in not applicable.

f. According to the information and explanations given to us and on thebasis of our examination of the records of the Company the Company has not granted anyloans either repayable on demand or without specifying any terms or period of repaymentduring the year. Hence reporting under this clause is not applicable.

iv. In our opinion and according to the information and explanationsgiven to us the company has not given any loans or provided any guarantees or securitiesto parties covered under section 185 of the Companies Act 2013. Further the provision ofsection 186 of the Companies Act 2013 in respect of loans and advances given andinvestments made have been complied with by the Company.

v. The Company has not accepted any deposits or amounts which aredeemed to be deposits from the public within the meaning of Sections 73 to 76 of the Actand the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordingly theprovisions of clause 3(v) of the Order are not applicable to the Company.

vi. According to the information and explanations given to us theCentral Government has not prescribed the maintenance of cost records under Section 148(1)of the Companies Act 2013 in respect of company?s products. Accordingly clause3(vi) of the Order is not applicable.

vii. a. Undisputed statutory dues including provident fundemployees? state insurance income tax sales tax service tax duty of customs dutyof excise value added tax goods and service tax cess and other statutory dues havegenerally been regularly deposited with the appropriate authorities though there has beena slight delay in depositing the same in few cases.

b. According to information and explanations given to us no undisputedamounts payable in respect of provident fund employees? state insurance income taxservice tax sales tax duty of customs duty of excise value added tax goods andservices tax cess and other statutory dues were outstanding at the year end for a periodof more than six months from the date they become payable except non-payment of intereston delayed payment of VAT amounting to Rs. 132.50 Lakhs.

c. Details of Statutory dues referred to in sub clause (a) above whichhave not been deposited as on 31st March 2022 on account of any dispute are given below: -

Sr.No. Name of the Statute Nature of Case Amount (Rs. In Lakhs) Period to which Amount Relates Forum at which case is pending
1 Income tax Act 1 961 Income Tax Demand 7.63 AY 2011-12 Commissioner of Income Tax (Appeals)Bhopal
2 Entry tax Act 1976 Entry Tax Demand 6.76 2008-09 M.P Commercial Tax Appellate Board Indore Bench
40.00 2012-13 Hon'ble High Court at Madhya Pradesh
3 The Madhya Pradesh VAT Act 2002 VAT Demand 420.48 2013- 14 2014- 15 Hon'ble High Court at Madhya Pradesh
247.46 2015-16 Hon'ble Supreme Court of India Delhi
28.00 2016-17 M.P Commercial Tax Appellate Board Indore Bench
4 The Central sales tax Act 1956 Central Sales Tax Demand 9.90 2015- 16 2016- 17 M.P Commercial Tax Appellate Board Indore Bench
5 The Madhya Pradesh Excise Act 1915 Excise Duty Demand 1.68 2011-12 2012-13 Board of Revenue (department of M.R)
70.95 2011-12 2013-14 to 2015-16 State Excise Commissioner Gwalior
39.32 2009-10 to 2012-13 Hon'ble High Court at Madhya Pradesh
6 The Finance Act 1994 Service Tax Demand 23.90 2016-17 Commissioner (Appeals) CGST & Central Excise & Customs
0.15 2017-18 (up to June 1 7)

viii. viii.According to the information and explanations given to usand on the basis of our examination of the records of the Company the Company has notsurrendered or disclosed any transactions previously unrecorded as income in the books ofaccount in the tax assessments under the Income-tax Act 1961 as income during the year.

ix. a. In our opinion the Company has not defaulted in repayment ofloans and borrowings or in the payment of interest thereon to any lender during the year.

b. In our opinion and based on the information and explanation given tous by the management of the company the Company has not been declared a wilful defaulterby any bank or financial institution or government or government authority.

c. The Company has not obtained any term loans during the year.Accordingly clause 3(ix)(c) of the Order is not applicable.

d. On an overall examination of the financial statements of theCompany funds raised on short term basis have not been used during the year for long termpurposes by the company.

e. The company does not have any subsidiaries associate or jointventure and accordingly reporting under clause 3(ix)(e) and

(f) of the Order is not applicable.

x. a. The Company has not raised any moneys by way of initial publicoffer or further public offer (including debt instruments) during the year. Accordinglyclause3(x)(a) of the Order is not applicable to the Company.

b. The Company has not made any preferential allotment or privateplacement of shares or convertible debentures (fully partially or optionally convertible)during the year. Accordingly clause 3(x)(b) of the Order is not applicable.

xi. a. Based on examination of the books and records of the Company andaccording to the information and explanations given to us we report that no materialfraud by the Company or on the Company has been noticed or reported during the year.

b. According to the information and explanations given to us no reportunder sub-section (12) of Section 143 of the Companies Act 2013 has been filed by theauditors in Form ADT-4 as prescribed under Rule 13 of Companies (Audit and Auditors)Rules 2014 with the Central Government.

c. As represented to us by the management there are no whistle blowercomplaints received by the Company during the year.

xii. The Company is not a Nidhi Company. Accordingly clause 3(xii) ofthe Order is not applicable.

xiii. In our opinion and according to the information and explanationsgiven to us the transactions with related parties are in compliance with Sections 177 and188 of the Companies Act 2013 wherever applicable and the details of the related partytransactions have been disclosed in the financial statements as required by the applicableIndian Accounting Standards 24 "Related Party Disclosures".

xiv. a. In our opinion the Company has an internal audit systemcommensurate with the size and nature of its business.

b. We have considered the internal audit reports of the Company issuedtill date for the period under audit. xv. In our opinion and according to the informationand explanations given to us the Company has not entered into any non-cash transactionswith its directors or persons connected to its directors and hence provisions of Section192 of the Companies Act 2013 are not applicable to the Company.

xvi. a. According to the information and explanations given to us theprovisions of section 45-IA of the Reserve Bank of India Act 1934 are not applicable tothe Company. Accordingly the requirement to report on clause (xvi) (a) & (b) of theorder is not applicable to the Company.

b. The Company is not a Core Investment Company (CIC) as defined in theregulations made by the Reserve Bank of India. Accordingly reporting under clause3(xvi)(c) of the Order is not applicable to the Company. c. Based on the information andexplanations provided by the management of the Company the Group does not have anyCIC?s which are part of the Group. Accordingly reporting under clause 3(xvi)(d) ofthe Order is not applicable to the Company.

xvii. The Company has not incurred cash losses in the current financialyear 2021-22 and in the immediately preceding financial year 2020-21.

xviii. There has been no resignation of the statutory auditors duringthe year. Accordingly clause 3(xviii) of the Order is not applicable.

xix. According to the information and explanations given to us and onthe basis of the financial ratios ageing and expected dates of realisation of financialassets and payment of financial liabilities other information accompanying the financialstatements our knowledge of the Board of Directors and management plans and based on ourexamination of the evidence supporting the assumptions nothing has come to our attentionwhich causes us to believe that any material uncertainty exists as on the date of theaudit report that the Company is not capable of meeting its liabilities existing at thedate of balance sheet as and when they fall due within a period of one year from thebalance sheet date. We however state that this is not an assurance as to the futureviability of the Company. We further state that our reporting is based on the facts up tothe date of the audit report and we neither give any guarantee nor any assurance that allliabilities falling due within a period of one year from the balance sheet date will getdischarged by the Company as and when they fall due.

xx. a. The Company has fully spent the required amount towardsCorporate Social Responsibility (CSR) and there are no unspent CSR amount for the yearrequiring a transfer to a Fund specified in Schedule VII to the Companies Act or specialaccount in compliance with the provision of subsection (6) of section 135 of the said Act.Accordingly reporting under clause (xx) of the Order is not applicable. b. In respect ofongoing projects the Company does not have any unspent Corporate Social Responsibility(CSR) amount as at the end of the previous financial year and also at the end of thecurrent financial year. Hence reporting under this clause is not applicable for the year.

Annexure "B" to the Independent Auditor?s Report

"Annexure B" to the Independent Audit Report of even date onthe Financial Statements of Associated Alcohols & Breweries

Limited.

REPORT ON THE INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIALSTATEMENTS UNDER CLAUSE (i) OF SUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT 2013("THE ACT")

We have audited the internal financial controls with reference tofinancial statements of Associated Alcohols & Breweries Limited ("theCompany") as of March 31 2022 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 Company?s management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting 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 company?s policies 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.

Auditor?s Responsibility

Our responsibility is to express an opinion on the Company?sinternal financial controls with reference to financial statements based on our audit. Weconducted our audit in accordance with the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting (the "Guidance Note") issued by the Instituteof Chartered Accountants of India 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 wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system with reference to financialstatements and their operating effectiveness. Our audit of internal financial controlswith reference to financial statements included obtaining an understanding of internalfinancial controls with reference to financial statements assessing the risk that amaterial weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor?s judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company?s internalfinancial controls system with reference to financial statements.

Meaning of Internal Financial Controls with reference to financialstatements

A company?s internal financial control with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company?s internalfinancial control with reference to financial statements includes those policies andprocedures that

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company?s assetsthat could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference tofinancial statements

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial control with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with reference to financial statements were operating effectively as atMarch 31 2022 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.

For Singhi & Co.

Chartered Accountants

Firm Registration No.302049E
(Gopal Jain)

Partner

Place: Indore Membership No. 059147
Dated: 25th May 2022 UDIN: 22059147AJPBHV3396

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