INDEPENDENT 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 of FACOR ALLOYS LIMITED (“the Company”),
which comprise the Balance Sheet as at March 31,2023, and
the Statement of Profit and Loss (including other
comprehensive income), Statement of changes in Equity and
Statement of Cash Flows for the year then ended, and notes
to the financial statements, including 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 given to us, the aforesaid Standalone
financial statements give the information required by the
Companies Act, 2013 (“the Act”) in the manner so required
and give a true and fair view in conformity with the accounting
principles generally accepted in India, of the state of affairs of
the Company as at March 31,2023, and total comprehensive
income (comprising loss and other comprehensive income),
the profit, changes in equity and its cash flows and for the
year then 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 those Standards are further
described in the Auditor’s Responsibilities for the Audit of the
Standalone Financial Statements section of our report. We
are independent of the Company in accordance with the Code
of Ethics issued by the Institute of Chartered Accountants of
India (ICAI) together with the ethical requirements that are
relevant to our audit of the Standalone financial statements
under the provisions of the Act and the Rules thereunder, and
we have fulfilled our other ethical responsibilities in accordance
with these requirements and the Code of Ethics. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Emphasis of Matter
We draw attention to Note 15.2 of the standalone financial
statement, which emphasises the company to be certain
regarding the recoverability of the loan amount from the Cati
Madencilik Ithalat Ve Ihracat A.S (step down overseas
subsidiary of the company). However, the operation of such a
subsidiary is yet to be commenced.
Our Opinion is not modified in respect of this matter.
Key Audit Matter
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
Standalone Financial Statements for the financial year ended
March 31,2023. These matters were addressed in the context
of our audit of the Standalone Financial Statements as a whole,
and in forming our opinion thereon, and we do not provide a
separate opinion on these matters. For each matter below,
our description of how our audit addressed the matter is
provided in that context.
We have determined the matters described below to be the
key audit matters to be communicated in our report. We have
fulfilled the responsibilities described in the Auditors’
responsibilities for the audit of the Standalone Financial
Statements section of our report, including in relation to these
matters. Accordingly, our audit included the performance of
procedures designed to respond to our assessment of the
risks of material misstatement of the Standalone Financial
Statements. The results of our audit procedures, including the
procedures performed to address the matters below, provide
the basis for our audit opinion on the accompanying
Standalone 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 other information comprises the information
included in the annual report, but does not include the Standalone
financial statements and our auditor’s report thereon.
Our opinion on the Standalone financial statements does not
cover the other information and we do not express any form
of assurance conclusion thereon.
In connection with our audit of the Standalone financial
statements, our responsibility is to read the other information
and, in doing so, consider whether the other information is
materially inconsistent with the Standalone financial
statements or our knowledge obtained in the audit or otherwise
appears to be materially misstated. If, based on the work we
have performed, we conclude that there is a material
misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Responsibilities of management and those charged with
governance for the Standalone financial statements
The Company’s Board of Directors is responsible for the
matters stated in Section 134(5) of the Act with respect to the
preparation of these Standalone financial statements that give
a true and fair view of the financial position, financial
performance, changes in equity and cash flows of the
Company in accordance with the accounting principles
generally accepted in India, including the accounting
Standards specified under Section 133 of the Act.
This responsibility also includes maintenance of adequate
accounting records in accordance with the provisions of the
Act for safeguarding the assets of the Company and for
preventing and detecting frauds and other irregularities;
selection and application of appropriate implementation and
maintenance of accounting policies; making judgments and
estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial
controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the Standalone
financial statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible
for assessing the Company’s ability to continue as a going
concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless
management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
The Board of Directors are also responsible for overseeing
the company’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 Standalone financial statements as a whole are
free from material misstatement, whether due 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 audit conducted in accordance with SAs
will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered
material if, individually or in the aggregate, they could reasonably
be expected to influence the economic decisions of users taken
on the basis of these Standalone financial statements.
As part of an audit in accordance with SAs, we exercise
professional judgment and maintain professional scepticism
throughout the audit. We also:
• Identify and assess the risks of material misstatement of
the Standalone financial statements, whether due to fraud
or error, design and perform audit procedures responsive
to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud
may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to
the audit in order to design audit procedures that are
appropriate in the circumstances. Under Section 143(3)
(i) of the Act, we are also responsible for expressing our
opinion on whether the Company has adequate internal
financial controls system in place and the operating
effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and
related disclosures made by management.
• Conclude on the appropriateness of use of the going
concern basis of accounting and, based on the audit
evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant
doubt on the Company’s ability to continue as a going
concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor’s report
to the related disclosures in the Standalone 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’s
report. However, future events or conditions may cause
the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content
of the Standalone financial statements, including the
disclosures, and whether the Standalone financial
statements represent the underlying transactions and
events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone
financial statements that, individually or in aggregate, makes
it probable that the economic decisions of a reasonably
knowledgeable user of the financial statements may be
influenced. We consider quantitative materiality and qualitative
factors in (i) planning the scope of our audit work and in
evaluating the results of our work; and (ii) to evaluate the effect
of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding,
among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies
in internal control that we identify during our audit.
We also provide those charged with governance with a
statement that we have complied with relevant ethical
requirements regarding independence, and to communicate
with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where
applicable, related safeguards.
From the matters communicated with those charged with
governance, we determine those matters that were of most
significance in the audit of the financial statements of the
current period and are therefore the key audit matters. We
describe these matters in our auditor’s report unless law or
regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because
the adverse consequences of doing so would reasonably be
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,
2020 (“the Order”) issued by the Central Government of
India in terms of sub-section (11) of section 143 of the
Act, we give in the “Annexure A”, a statement on the
matters specified in paragraphs 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 best of 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 the Company so far as
appears from our examination of those books;
c. The Balance Sheet, Statement of Profit and Loss
including Other Comprehensive Income, the
Statement of changes in equity and the statement
of Cash Flow Statement dealt with by this Report
are in agreement with the books of account;
d. In our opinion, the aforesaid Standalone financial
statements comply with the Indian Accounting
Standards specified 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
the directors as on 31st March, 2023, and taken on record
by the Board of Directors, none of the directors is
disqualified as on 31st March, 2023 from being appointed
as a director in terms of Section 164 (2) of the Act;
f. With respect to the adequacy of the internal financial
controls over financial reporting of the Company and
the operating effectiveness of such controls, refer
to our separate Report in “Annexure B”; and
g. During the year 2022-23, the company has not paid
any managerial remuneration to its directors.
h. With respect to the other matters to be included in
the Auditor’s Report in accordance with Rule 11 of
the Companies (Audit and Auditors) Rules, 2014,
in our opinion and 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 financial position in note
no. 36 in its standalone financial statements.
ii) The Company did not have any long-term
contracts including derivatives contracts for which
there were any material foreseeable losses;
iii) There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund by the
Company.
iv) a) The management has represented that, to
the best of its knowledge and belief, no
funds have been advanced or loaned or
invested (either from borrowed funds or
share premium or any other sources or
kind of funds) by the company to or in any
other persons or entities, including foreign
entities (“Intermediaries”), with the
understanding, whether recorded in writing
or otherwise, that the Intermediary shall,
whether, directly or indirectly lend or invest
in other persons or entities identified in any
manner whatsoever by or on behalf of the
company (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries;
b) The management has represented that, to
the best of its knowledge and belief, other
than as disclosed in the noted to accounts,
no funds have been received by the
company from any persons or entities,
including foreign entities (“Funding
Parties”), with the understanding, whether
recorded in writing or otherwise, that the
company shall, whether, directly or
indirectly, lend or invest in other persons
or entities identified in any manner
whatsoever by or on behalf of the Funding
Party (“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on
behalf of the Ultimate Beneficiaries; and
c) Based on the audit procedures that were
considered reasonable and appropriate in
the circumstances, nothing has come to our
notice that has caused us to believe that
the representations under sub-clause (a)
and (b) contain any material misstatement
v) No dividend declared or paid during the year
by the Company.
vi) Proviso to Rule 3(1) of the Companies
(Accounts) Rules, 2014 for maintaining books
of account using accounting software which
has a feature of recording audit trail (edit log)
facility is applicable to the Company with effect
from April 1, 2023, and accordingly, reporting
under Rule 11(g) of Companies (Audit and
Auditors) Rules, 2014 is not applicable for the
financial year ended March 31, 2023.
Mohsin Hada
Partner
Membership No. 608681
For and on behalf of
K.K. Mankeshwar & Co.
Chartered Accountants
Place: New Delhi Firm’s Registration No. 106009W
Date: 17th May, 2023 UDIN:23608681BGQVHW8383
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