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Facor Alloys Ltd.

BSE: 532656 Sector: Metals & Mining
NSE: N.A. ISIN Code: INE828G01013
BSE 00:00 | 25 Jan 9.39 -0.30
(-3.10%)
OPEN

9.21

HIGH

9.68

LOW

9.21

NSE 05:30 | 01 Jan Facor Alloys Ltd
OPEN 9.21
PREVIOUS CLOSE 9.69
VOLUME 790255
52-Week high 11.03
52-Week low 1.86
P/E
Mkt Cap.(Rs cr) 184
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 9.21
CLOSE 9.69
VOLUME 790255
52-Week high 11.03
52-Week low 1.86
P/E
Mkt Cap.(Rs cr) 184
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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 statements ofFACOR ALLOYS LIMITED ("the Company") which comprise the Balance Sheet as atMarch 31 2021 and the Statement of Profit and Loss (including other comprehensiveincome) Statement of changes in Equity and Statement of Cash Flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information. In our opinion and to the best ofour information and according to the explanations given to us the aforesaid Standalonefinancial statements give the information required by the Companies Act 2013("theAct") in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2021 and total comprehensive income (comprising loss and othercomprehensive income) the profit changes in equity and its cash flows and for the yearthen ended on that date.

Basis for opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthe Standalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI) together with the ethical requirements that are relevant toour audit of the Standalone financial statements under the provisions of the Act and theRules there under and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Other information

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

Our opinion on the Standalone 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 Standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

Responsibilities of management and those charged with governance forthe Standalone 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 Standalonefinancial statements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting Standardsspecified under Section 133 of the Act.

This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error. Inpreparing 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 Standalonefinancial statements

Our objectives are to obtain reasonable assurance about whether theStandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone financial statements.

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

• Identify and assess the risks of material misstatement of theStandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• 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.

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

• Conclude on the appropriateness of use of the going concern basis of accountingand based on the audit evidence obtained whether a material uncertainty exists relatedto events or conditions that may cast significant doubt on the Company's ability tocontinue as a going concern. If we conclude that a material uncertainty exists we arerequired to draw attention in our auditor's report to the related disclosures in theStandalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to ceaseto continue as a going concern.

• 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 standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions 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. Wecommunicate with those charged with governance regarding among other matters the plannedscope and timing of the audit and significant audit findings including any significantdeficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our 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 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure A a statement on the matters specified inparagraphs 3 and 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 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 appears from our examination of those books;

c. The Balance Sheet Statement of Profit and Loss including Other ComprehensiveIncome the Statement of changes in equity and the statement of Cash Flow Statement dealtwith by this Report are in agreement with the books of account;

d. In our opinion the aforesaid Standalone financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act.

e. On the basis of the written representations received from the directors as on 31stMarch 2021 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 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"; and

g. 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 in our opinionand to the best of our information and according to the explanations given to us:

i) The Company has disclosed the impact of pending litigations on its financialposition in note no. 34 in its standalone financial statements.

ii) The Company did not have any long-term contracts including derivatives contractsfor which 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.

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT

The Annexure referred to in paragraph 1 under "Report on OtherLegal and Regulatory Requirement" section of our Independent Auditors' Report tothe members of the Company on the Standalone financial statements for the year ended March31 2021 we report that:

1. In respect of Company's Fixed Asset

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

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 title deeds of immovable property are in name of erstwhile pre-demerged company.The immovable properties are transferred by virtue of BIFR Order No.314/98 dated 13thApril 2004. The immovable properties acquired subsequent to demerger are held in the nameof 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 of such loans are in our opinion primafacie not prejudicial to the company's interest.

b. The schedule of repayment of principle and payment of interest has been stipulatedand found that repayments or receipts of principle amounts and interest have been regularas per 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 activitiescarried out by the company and we are of opinion that prima facie such accounts andrecords have been made and maintained

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 ServiceTax Customs Duty Cess and other material statutory dues applicable to it with theappropriate authorities.

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 2021 for a period of more thansix months from the date they became payable.

c) Details of dues of Income Tax Sales Tax Service Tax Excise Duty and Value AddedTax which have not been deposited as at March 31 2021 on account of dispute are givenbelow:

Nature of dues Forum where dispute is pending Period to which the amount relates Amount in lakhs*
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 2010 – 2011 27.75

* Amount is net of payment under protest

8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to banks. The companydid not have any outstanding loans or borrowings from financial institutions or governmentand there are no dues to debenture holders during the year.

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 to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe 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.

"ANNEXURE B" TO THE INDEPENDENT AUDITOR'S REPORT OF EVENDATE ON THE STANDALONE FINANCIAL STATEMENTS OF FACOR ALLOYS LIMITED

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of Facor Alloys Limited as of March 31 2021 in conjunction with our audit ofthe Standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing 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.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit 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 aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the Standalone financial statements whether due tofraud 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 over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of Standalone financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internalfinancial control over financial reporting includes those policies and procedures 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 Standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company; 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 Standalone financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

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

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2021 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the Institute ofChartered Accountants of India.

Ashwin Mankeshwar
Partner
Membership No. 046219
For and on behalf of
K.K. Mankeshwar & Co.
Chartered Accountants
Place: New Delhi Firm's Registration No. 106009W
Date: 25th June 2021 UDIN:21046219AAAACM8811

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