The Members of
ALPS INDUSTRIES LIMITED.
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of "ALPSINDUSTRIES LIMITED" (the Company) which comprise the Balance Sheet as at 31stMarch 2016 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of the significant accounting policies and other explanatoryinformation.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flow of the Company in accordance with theaccounting principles generally accepted in India includingthe Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made there under. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the financial statements are free frommaterial misstatement. An audit involves performing procedures to obtain audit evidenceabout the amounts and the disclosures in the financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers the internal financial control relevantto theCompany's preparation of the financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the financial statements. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our opinion on thestandalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act 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 31st March 2016 and its Profit and its cash flow for the year ended on that date.
Emphasis of Matters
We draw attention to the following matters in the Notes to Financial Statements:
1. To Note No. 38 related to preparation of financial statement on going concern basison belief of the company on its ability to meet its financial obligations as perrestructuring consented to by the majority secured forming part of the DraftRehabilitation Scheme which is pending for consideration before Hon'ble Board forIndustrial and Financial Reconstruction.
2. To Note No.39 related to non provision of interest on loans from subsidiarycompanies and loans from minority secured lenders pending their consent to therestructuring which has been consented to by the majority secured lenders.
Report on other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("theOrder")as amended 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 thematters specified in paragraph 3 and 4 of the Order to the extent applicable:
2. As required by 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 beliefwere 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 and the cash flow statementdealt with by this Report are in agreement with the books of account;
(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;
(e) On the basis of the written representations received from the directors as on 31stMarch 2016 and taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2016 from being appointed as a director in terms ofSection 164 (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 accordingtotheexplanationsgiven to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements- Refer Note No. 37 to the financial statements;
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on longterm contracts includingderivative contracts;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
| ||For R.K. Govil & Co. |
| ||Chartered Accountants |
| ||(Firm Reg. No. : 000711C) |
| ||(Kaushal Kishore Pal) |
|Place : Ghaziabad ||Partner |
|Date : May 30 2016 ||Membership No. : 074999 |
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2016 we report that:
1) (a) The Company has maintained proper records though to be updated showing fullparticulars including quantitative details and situation of its fixed assets.
(b) As explained to us the management has physically verified all the fixed assetsduring the year except for Jaspur and Kashipur unit which were closed and not in itspossession in a phased periodical manner which in our opinion is reasonable havingregard to the size of the Company. We have been informed that no material discrepancieswere noticed on such physical verification during the year.
(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 areheld in the name of the Company.
(2) (a) The inventory has been physically verified during the year by the management inphased manner.
(b) In our opinion and according to the information and explanations given to us theprocedure of physical verification of inventory followed by the management is reasonableand adequate in relation to the size of the Company and the nature of its business.
(c) The Company has maintained proper records of inventories. As explained to us thediscrepancies noticed on physical verification as compared to book records were notmaterial and have been dealt with in the books of account.
(3) According to the information and explanation given to us the company has notgranted any loans secured or unsecured to companies firms or other parties covered inthe register required to be maintained under section 189 of the Act. Accordingly paragraph3 (iii) of the order is not applicable.
(4) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.
(5) In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits from the public.
(6) We were informed that company has maintained cost records pursuant to Companies(Cost Records and Audit) Rules 2014 as amended and prescribed by the Central Governmentunder section 148(1) of the Companies Act 2013 and we are of the opinion that primafacie the prescribed cost records have been maintained. We have however not made adetailed examination of the records with a view to determine whether they are accurate andcomplete.
(7) (a) The Company is generally regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Sales tax Service TaxDuty of Custom Duty of Excise Value Added Tax Cess and any other statutory duesapplicable to it with the appropriate authorities.
According to the information and explanations given to us no amounts payable inrespect of Income-tax Service Tax Sales-tax Duty of Custom Duty of Excise Cess andother aforesaid statutory dues were outstanding as at 31st March 2016 for a period ofmore than six months from the date they became payable b) The disputed statutory duesaggregating to Rs.39.24 Lac as on 31st March 2016 have not been deposited on account ofmatters pending before appropriate authorities which are as under:
|Name of the Statute ||Nature of Dues ||Amount ||From where Dispute is Pending |
|1 Nagar Nigam ||Sewerage Tax ||Rs. 5.52 Lac ||Hon'ble Commisioner Nagar Nigam Gzb. |
|3 CESTAT ||Excise Duty ||Rs. 33.72 Lac ||Hon'ble CESTAT |
(8) By order dated 02.09.2011 of Board of Industrial and Financial Reconstruction(Board) the amount becoming due after May 2011 to Banks and Financial institutions aredeferred till the date of sanction of the scheme of the Draft Rehabilitation Scheme (DRS)by Board and further 83% of the secured lenders (including One Time Settlement with thecompany) have consented to DRS which is pending before the Board. Having regard to pendingapprovals of DRS we are unable to express any opinion about the default ofPrincipal/interestand period of default if any.
(9) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans duringtheyear. Accordinglyparagraph 3 (ix) of the Order is not applicable.
(10) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.
(11) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(12) 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 notapplicable.
(13) 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.
(14) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(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 paragraph 3(xv) ofthe 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 AUDITORS' REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of ALPSINDUSTRIES LIMITED (the Company) as of 31 March 2016 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 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 ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliablefinancial information asrequired underthe Companies Act 2013.
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 Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 judgment 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 conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
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 31 March 2016 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.
| ||For R.K. Govil & Co. |
| ||Chartered Accountants |
| ||(Firm Reg. No. : 000748C) |
| ||(Kaushal Kishore Pal) |
|Place : Ghaziabad ||Partner |
|Date : May 30 2016 ||Membership No. : 074999 |