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Facor Alloys Ltd.

BSE: 532656 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE828G01013
BSE 00:00 | 27 Feb 1.54 0.04
(2.67%)
OPEN

1.52

HIGH

1.55

LOW

1.45

NSE 05:30 | 01 Jan Facor Alloys Ltd
OPEN 1.52
PREVIOUS CLOSE 1.50
VOLUME 30636
52-Week high 2.28
52-Week low 0.89
P/E 2.14
Mkt Cap.(Rs cr) 30
Buy Price 1.46
Buy Qty 500.00
Sell Price 1.54
Sell Qty 2000.00
OPEN 1.52
CLOSE 1.50
VOLUME 30636
52-Week high 2.28
52-Week low 0.89
P/E 2.14
Mkt Cap.(Rs cr) 30
Buy Price 1.46
Buy Qty 500.00
Sell Price 1.54
Sell Qty 2000.00

Facor Alloys Ltd. (FACORALLOYS) - Auditors Report

Company auditors report

TO THE MEMBERS OF FACOR ALLOYS LIMITED

Report on the audit of the Standalone Financial Statements Opinion

We have audited the accompanying Standalone financial of statements of FACOR ALLOYSLIMITED ("the Company") which comprise the Balance Sheet as at March 31 2019and the 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 the financial statementsincluding a summary of significant accounting policies and other explanatory information.In our opinion and to the best of our information and according to the explanations givento us the aforesaid Standalone 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 accounting principles generally accepted in India of thestate of affairs the Company as at March 31 2019 and total comprehensive income(comprising loss and other comprehensive income) the profitchangesinequity flowsand forthe year itscash then ended on that date.

Basis for opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of

Act. Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India

(ICAI) together with the ethical requirements that are relevant to our audit of theStandalone financial statements the provisions of the Act and the Rules thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientappropriate to provide a basis for our opinion.

Other information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the annual report but does not includethe Standalone financial statements and our auditor's report thereon.

Our opinion on the Standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.

In connection with our audit of the Standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the Standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we 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 Standalonefinancial statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these Standalone financial statementsthat give a true and fair view of the financial position financial performance changesin equity and cash flows the Company in accordance with the accounting principlesgenerally accepted in India including the accounting Standards specified under Section133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate implementation and maintenance of accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the Standalone financial statements that give a true and fair view and arefree 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. The Board of Directors are also responsible for overseeing thecompany's financial reporting process.

Auditor's responsibilities for the audit of the Standalone financial statements

Our objectives are to obtain reasonable assurance about whether the Standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also: z Identify andassess the risks of material misstatement of the Standalone financial statements whetherdue to fraud or error design and perform audit procedures responsive to those risks andobtain audit evidence that is sufficient and appropriate to provide a basis for ouropinion. The risk of not detecting a material misstatement resulting from fraud is higherthan for one resulting from error as fraud may involve collusion forgery intentionalomissions misrepresentations or the override of internal control.

z 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 Act we are also responsible for expressing our opinion on whether the Companyhas adequate internal financial controls system in place and the operating effectivenessof such controls. z Evaluate the appropriateness of accounting policies used andthe reasonableness of accounting estimates and related disclosures made by management. zConclude on the appropriateness of use of the going concern basis of accounting and basedon the audit evidence obtained whether a material uncertainty exists related to events orconditions that may cast significant doubt on the Company's ability to continue as a goingconcern. If we conclude that a material uncertainty exists we are required to drawattention in our auditor's report to the related disclosures in the Standalone financialstatements or if such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor's report. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.z 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 standalone financial statementsthat individually 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

1. 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 Act we give in the Annexure A a statement on the matters specified in paragraphs 3and 4 of the Order.

2. As required by section 143(3) of the Act we report to the extent applicable that:a. We have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of our audit. b. In our opinionproper books of account as required by law have been kept by the Company so far as appearsfrom our examination of those books; c. The Balance Sheet Statement of Profit and Lossincluding Other Comprehensive Income the Statement of changes in equity and the statementof Cash Flow Statement dealt with by this Report are in agreement with the books ofaccount; d. In our opinion the aforesaid Standalone financial statements comply with theIndian Accounting

Standards specified under Section 133 of the Act. e. On the basis of the writtenrepresentations received from the directors as on 31st March 2019 and taken on record bythe Board of Directors none of the directors is disqualified as on 31st March 2019 frombeing appointed as a director in terms of Section 164

(2) of the Act; f. With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B"; and g. With respect to the other mattersto be included in the Auditor's Report in accordance with Rule 11 of the Companies (Auditand Auditors) Rules 2014 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 pendinglitigations on its financial position in note no.36 in its standalone financialstatements. ii) The Company did not have any long-term contracts including derivativescontracts for which there were any material foreseeable losses; iii) There has been nodelay in transferring amounts required to be transferred to the Investor Education andProtection Fund by the Company.

ABHAY UPADHYE
Partner
Membership No. 049354
For and on behalf of
K.K. MANKESHWAR & CO.
Place: Noida Chartered Accountants
Date : 17th May 2019 Firm's Registration No. 106009W

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in paragraph 1 under "Report on

Other Legal and Regulatory Requirement" section of our

Independent Auditors' Report to the members of the Company on the Standalone financialstatements for the year ended

March 31 2019 we report that:

1. In respect of Company's Fixed Asset a. The Company has maintained proper recordsshowing full particulars including quantitative details and situation of fixedAssets. b.The company has a regular programme of physical verification of fixed assets. In ouropinion the periodicity of physical verification is reasonable having regard to the sizeof the company and the nature of its asset. c. The tittle deeds of immovable property arein name of erstwhile pre-demerged company. The immovable properties are transferred byvirtue of BIFR Order No.314/98 dated 13th April 2004. The immovable properties acquiredsubsequent to demerger are held in the name of the company.

2. Physical verification of the inventory has been conducted at reasonable intervals bythe management. No material discrepancies were noticed.

3. According to the information and explanation given to us the Company has grantedunsecured loans to bodies corporate covered in the register maintained under Section 189of Companies Act 2013 in respect of which: a. The terms and conditions of the grant ofsuch loans are in our opinion prima facie not prejudicial to the company's interest. b.The schedule of repayment of principle and payment of interest has been stipulated andfound that repayments or receipts of principle amounts and interest have been regular asper stipulations.

4. In our opinion and according to the information and explanation given to us thecompany has complied with the provision of section 185 and 186 of the Act in respect ofloans making investments and providing guarantees and securities as applicable.

5. According to the information and explanation given to us the Company has notaccepted any deposits during the year.

6. The maintenance of cost records has been prescribed by the Central Government undersub-section (1) of section

148 of the Companies Act 2013 for the business activities carried out by the companyand we are of opinion that prima facie such accounts and records have been made andmaintained

7. According to the information and explanation given to us in respect of statutorydues: a) The Company has generally been regular in depositing undisputed statutory duesincluding

Provident Fund Employees' State Insurance Income Tax Goods and Service Tax CustomsDuty Cess and other material statutory dues applicable to it with the appropriateauthorities. b) There were no undisputed amounts payable in respect of Provident FundEmployees' State Insurance Income Tax Goods and Service Tax Customs Duty Cess andother material statutory dues in arrears as at March 31 2019 for a period of more thansix months from the date they became payable. c) Details of dues of Income Tax Sales TaxService

Tax Excise Duty and Value Added Tax which have not been deposited as at March 31 2019on account of dispute are given below:

Nature of dues Forum where dispute is pending Period to which the amount relates Amount Rs in lakhs*
Service Tax CESTAT Hyderabad Commissioner (Appeals) Visakhapatnam 2012 – 2013 2013 – 2014 2015 – 2016 2009 – 2010 2015 – 2016 48.95 18.64
Custom Duty A.P.High Court Hyderabad 1988 – 1989 158.34
Sales Tax A.P. High Court Hyderabad 2009 – 2010 21.27
APSTAT – Visakhapatnam 2010 – 2011 2011 – 2012 2012 – 2013 8.51
Income Tax Addnl. Comm. IT (Appeals) Visakhapatnam 2009 – 2010 2010 – 2011 2012-2013 67.00

* Amount is net of payment under protest

8. The company has defaulted in repayment of Rs.2104.61 lakhs as on 31st March2019 (Previous year Rs. 3605.74) to the Bank of India against devolvement of SBLCamounting to Rs.6089.76 lakhs on 3rd August 2015 provided by the bank for the term loan bythe overseas lender to one of the overseas subsidiary of the company. The devolved amountis secured by the first charge on the fixed assets of the company by deposit of tittledeeds in respect of immovable properties.

The company has received demand notice dated 20th February 2017 from the lender of CatiMadencilik Ithalat Ve Ihracat A.S. (Tier II subsidiary) against the corporate guaranteegiven by Facor Alloys Limited towards its borrowing amount USD 1.5 million. The lender hasoffered one time settlement (OTS) vide its letter dated 17.01.2019 for payment of USD1.188 million.

9. The Company has not raised money by way of initial public offer or further publicoffer (including debt instruments) and term loan during the year. Accordingly clause (ix)of the paragraph 3 of the Order is not applicable.

10. According to the information and explanations given reportingto us no materialfraud by the Company or on the Company by its officers or employees has been noticed orduring the course of our audit.

11. In our opinion and according to the information and explanation given to us thecompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with schedule V of the Act.

12. As the Company is not a Nidhi Company accordingly clause (xii) of paragraph 3 ofthe order is not applicable to the Company.

13. According to the information and explanation given to us all transaction withrelated parties are in compliance with section 177 and 188 of Companies Act 2013 whereverapplicable and the details have been disclosed in the Standalone Financial Statement etc.as required by the applicable accounting standards.

14.According to the information and explanation given to us the company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebenture during the year and hence reporting under clause 3(xiv) of the order is notapplicable to the company.

15. 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-cashtransactions with directors or persons connected with him. Accordingly clause (xv) of theparagraph 3 of the

Order is not applicable.

16. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

ABHAY UPADHYE
Partner
Membership No. 049354
For and on behalf of
K.K. MANKESHWAR & CO.
Place: Noida Chartered Accountants
Date : 17th May 2019 Firm's Registration No. 106009W

"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THESTANDALONE FINANCIAL STATEMENTS OF FACOR ALLOYS LIMITED Report on the Internal FinancialControls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")

We have audited the internal financial controls over financial reporting of FacorAlloys Limited as of March 31 2019 in conjunction with our audit of the Standalonefinancial 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 controls based on the andmaintaining internal financial internalcontrolover financial established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls over Financial Reporting issued by theInstitute of Chartered Accountants of India. These responsibilities include the designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the of its business orderly and efficient including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the 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 Auditingissued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls both applicableto an audit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. 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 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 system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the Standalone financial statements whether due to fraud orerror. We believe that the audit evidence we have obtained is sufficient opinion on theCompany's internal financial controls system over 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 Standalone financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of Standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the Standalonefinancial 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 conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.

ABHAY UPADHYE
Partner
Membership No. 049354
For and on behalf of
K.K. MANKESHWAR & CO.
Place: Noida Chartered Accountants
Date : 17th May 2019 Firm's Registration No. 106009W