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Associated Alcohols & Breweries Ltd.

BSE: 507526 Sector: Consumer
NSE: ASALCBR ISIN Code: INE073G01016
BSE 00:00 | 29 Jul 468.15 6.80
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NSE 00:00 | 29 Jul 468.15 7.70
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OPEN 461.35
PREVIOUS CLOSE 461.35
VOLUME 10690
52-Week high 515.10
52-Week low 216.00
P/E 14.60
Mkt Cap.(Rs cr) 846
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 461.35
CLOSE 461.35
VOLUME 10690
52-Week high 515.10
52-Week low 216.00
P/E 14.60
Mkt Cap.(Rs cr) 846
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 Associated Alcohols &Breweries Limited ("the Company") which comprise the Balance Sheet as at March31 2020 the Statement of Profit and Loss (including Other Comprehensive Income) theCash Flow Statement and the Statement of Changes in Equity for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information (hereinafter referred to as the "FinancialStatement").

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 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 thestate of affairs of the Company as at March 31 2020 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 with the Standards onAuditing (SAs) as specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial 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 there under and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Financial Statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Financial Statements for the financial year ended March31 2020. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below 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 physical 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 4004.45 Lakhs as at March 312020 as detailed in Notes 12 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.
> Observed the physical verification of significant inventories count for certain locations through the involvement of independent Firm of Chartered Accountants before the date of signing the financial statements and applying the roll back 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.
Due to pandemic "Covid-19" the company could not undertake the year-end verification hence the existence of inventories became more vulnerable to the fair presentation of financial statements. We determined this to be a matter of significance to our audit due to quantum of the amount & estimation involved. > 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 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.42.1(a)} 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's Report thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report for example CorporateOverview Key Highlights Board's Report Report on Corporate Governance ManagementDiscussion & Analysis Report etc. but does not include the Financial Statements andour auditors' 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.

Responsibilities of Management and those charged with governance for the FinancialStatements

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 Financial Statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statement that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the Financial Statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditors' Responsibility 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 auditors' 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 StandaloneFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol;

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act 2013 we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls;

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern; and

• Evaluate the overall presentation structure and content of the StandaloneFinancial Statements including the disclosures and whether the Standalone FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We 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 Financial Statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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 the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

Further to our comments in the annexure referred to in the paragraph above as requiredby 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 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 Comprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account;

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

e. On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164(2) of the Act;

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting;

g. With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of the section 197(16) of the Act as amended in ouropinion and to the best of our information and according to the explanation given to usthe managerial remuneration for the year ended March 312020 has been paid / provided bythe Company to its directors in accordance with the provisions of section 197 read withSchedule V to 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 as stated in Note 42 to the financial statement;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

For Singhi & Co.
Chartered Accountants
Firm Registration No.302049E
(Gopal Jain)

Partner

Place: Kolkata Membership No. 059147
Dated: 29th June 2020 UDIN: 20059147AAAABO1376

Annexure "A"to the Independent Auditor's Report

Referred to our report of even date to the members of Associated Alcohols &Breweries Limited as at and for the year ended March 31 2020:

i. In respect of Company's fixed assets:

a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) The Company has a program of physical verification of its property plant andequipment in a phased manner over a period of 3 years which in our opinion is reasonablehaving regard to the size of the Company and the nature of its property plant andequipment. Pursuant to the program certain property plant and equipment were physicallyverified by the Management during the year. According to the information and explanationsgiven to us no material discrepancies were noticed on such verification.

c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties in thenature of land at the balance sheet date are held in the name of the Company.

ii. As informed to us 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 at the reasonable intervals. The year-endphysical verification of inventories was carried out a firm of Chartered Accountantssubsequent to Balance sheet date and performed the roll back procedure to confirm anydiscrepancies at the year-end stock. For stocks lying with third parties at the year-endwritten confirmations have been obtained and in respect of goods-in-transit subsequentgoods receipts have been verified or confirmations have been obtained from the parties.The discrepancies noticed on verification between the physical stocks and the book recordswere not material.

iii. The Company has not granted any loans secured or unsecured to companies firmslimited liability partnership or parties covered in the register maintained under Section189 of the Act. Accordingly clause 3 (iii) of the Order is not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us thecompany has not given any loans or provided any guarantees or securities to partiescovered under section 185 of the Companies Act 2013.

Further the provision of section 186 of the Companies Act 2013 in respect of loans andadvances given investments made and guarantees & securities given have been compliedwith by the Company.

v. The Company has not accepted any deposits within the meaning of Sections 73 to 76 ofthe Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordinglythe provisions of clause 3(v) of the Order are not applicable.

vi. To the best of our knowledge and according to information and explanations given tous the Government has not specified maintenance of the cost records under section 148(1)of the Companies Act 2013 in respect of company's product.

vii. (a) Undisputed statutory dues including provident fund employees' stateinsurance income tax sales tax service tax duty of customs duty of excise valueadded tax goods and service tax cess and other statutory dues have generally beenregularly deposited with the appropriate authorities though there has been a slight delayin depositing the same in few cases.

(b) According to information and explanations given to us no undisputed amountspayable in respect of provident fund employees'state insurance income tax service taxsales tax duty of customs duty of excise value added tax goods and service tax cessand other statutory dues were outstanding at the year end for a period of more than sixmonths from the date they become payable except non payment of income tax amounting to0.16 lakhs & interest on delayed payment of VAT amounting to RS 117.70 Lakhs.

(c) As per the record of the company the dues of sales tax income tax duty ofcustoms goods & service tax duty of excise service tax and value added tax whichhave not been deposited on account of any dispute and the forum where the dispute ispending as on 31st March 2020 are as under :-

Name of the Statute Nature of Case Amount (J In Lakh) Period to which Amount Relates Forum at which case is pending
1 Income tax Act 1961 Income Tax Demand 7.63 AY 2011-12 Commissioner of Income Tax (Appeals)Kolkata
2 Entry tax Act 1976 Entry Tax Demand 60.86 2008-09 2012-13 & 2013-14 M.P Commercial Tax Appellate Board Indore Bench
3 The Madhya Pradesh VAT Act 2002 VAT Demand 491.98 2013-14 2014-15 & 2016-17 M.P Commercial Tax Appellate Board Indore Bench
329.96 2015-16 Hon'ble Supreme Court of India Delhi
4 The Central sales tax Act1956 Central Sales Tax Demand 13.04 2013-14 to 2016-17 M.P Commercial Tax Appellate Board Indore Bench
5 The Madhya Pradesh Excise Act 1915 Excise Duty Demand 6.05 2011-12 to 2013-14 Board of Revenue (department of M.P.)
70.95 2011-122013-14 to 15-16 State Excise Commissioner Gwalior
39.32 2009-10 to 2012-13 Hon'ble High Court at M.P.
6 Income tax Act 1961 Income Tax Demand 642.61 AY 2012-13 to 2018-19 Commissioner of Income Tax (Appeals) Bhopal

viii. In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of loans or borrowing to banks.Based on our audit procedures and as per the information and explanations given by themanagement the Company did not have any outstanding dues to a financial institution orgovernment or due to debentures holders.

ix. The company has not raised any money by way of initial public offer further publicoffer (including debt instruments) during the year. In our opinion the term loans havebeen applied for the purpose for which they were obtained.

x. In our opinion and according to the information and explanations given to us nofraud on or by the Company by its officers or employees has been noticed or reportedduring the year.

xi. In our opinion and based on our examination of the records of the Company theCompany has paid/provided for managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi

Company. Accordingly paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations given to us during the year theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures and hence reporting under paragraph 3 (xiv) of the Order isnot applicable to the Company.

xv. According to the information and explanations given to us and based on ourexamination of the records of the

Company the Company has not entered into non-cash transactions with directors orpersons connected with them. Accordingly paragraph 3(xv) of the Order is not applicable.

xvi. According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the company.

For Singhi & Co.
Chartered Accountants
Firm Registration No.302049E
(Gopal Jain)

Partner

Place: Kolkata Membership No. 059147
Dated: 29th June 2020 UDIN: 20059147AAAABO1376

Annexure "B"to the Independent Auditor's Report

"Annexure B" to theIndependent Audit Report of even date on the FinancialStatements of Associated Alcohols & Breweries Limited.

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 AssociatedAlcohols & Breweries Limited ("the Company") as of March 31 2020 inconjunction with our audit of the financial statements of the Company for the year endedon 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.

Auditor's 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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the 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 purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company;(2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3)provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditionsor thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

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 internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For Singhi & Co.
Chartered Accountants
Firm Registration No.302049E
(Gopal Jain)

Partner

Place: Kolkata Membership No. 059147
Dated: 29th June 2020 UDIN: 20059147AAAABO1376

.