The Members of
ASHOK ALCO-CHEM LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of ASHOK ALCO-CHEM LIMITED('the Company') which comprise the Balance Sheet as at 31 March 2017 the statement ofProfit and Loss and the Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these financial statements that give a true and fair view of thefinancial position financial performance of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified undersection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder and the Order under section 143 (11)of the Act.
We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial controls systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
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 the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31March 2017 and its PROFIT for the year ended on that date.
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 in terms of section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
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 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 and the Cash Flow Statementdealt with by this Report are in agreement with the books of account;
(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;
(e) On the basis of the written representations received from the Directors as on 31March 2017 taken on record by the Board of Directors none of the Director is disqualifiedas on 31 March 2017 from being appointed as a Director in terms of section 164 (2) of theAct; and
(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".
(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 does not have any pending litigations which would impact its financialposition;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv. The Company has provided requisite disclosures in the financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30 December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management .
"ANNEXURE A" to the Auditor's Report
(Referred to in Paragraph 1 under 'Report on other Legal and Regulatory Requirements'section of our report of even date)
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets have been physically verified by the management at the year endand no material discrepancies were noticed on such physical 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 freehold immovableproperties are held in the name of the Company and those taken on lease and disclosed asfixed asset in the financial statements the lease agreements are in the name of theCompany wherein the Company is the lessee.
2. (a) The stock of Finished Goods Raw materials Stores and consumables werephysically verified by the Management at each half year end;
b) In our opinion and according to the information and explanations given to us theprocedure of physical verification of stocks followed by the management is reasonable andadequate in relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventories. The discrepancies noticedon verification between the physical stocks and book records were not material and havebeen properly dealt with in the books of account.
3. The Company has not granted unsecured loan to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section189 of theCompanies Act 2013. Accordingly paragraph 3(iii) of the order is not applicable to theCompany.
4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.
5. According to the information and explanations given to us the Company has notaccepted any deposit from the public during the year. In respect of unclaimed depositsthe Company has complied with the provisions of sections 73 to 76 or any other relevantprovisions of the Companies Act 2013.
6. We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies (Cost Accounting Records) Rules 2011 prescribed by the Central Government undersection 148(1) of the Companies Act 2013 in relation to the products manufactured and areof the opinion that prima facie the prescribed cost records have been maintained. We havehowever not made a detailed examination of the cost records with a view to determinewhether they are accurate or complete.
7. (a) According to the information and explanations given to us and the records of theCompany examined by us in our opinion the Company is generally regular in depositingundisputed statutory dues in respect of sales tax including Value Added Tax Service TaxProvident Fund Employees' State Insurance Income Tax Duty of Custom Duty of ExciseCess and other material statutory dues as applicable with the appropriate authoritiesexcept for marginal delays.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees' State Insurance Income Tax Sales TaxValue Added Tax Service Tax Duty of Customs Duty of Excise Cess and other materialstatutory dues were in arrears as at 31 March 2017 for a period of more than six monthsfrom the date they became payable.
(c) The particulars of dues of Income Tax Sales Tax including value added tax atMarch 31 2017 which has not been deposited on account of dispute are as follows:
|Name of the Statute ||Nature of Dues ||Amount Rs. in lacs ||Financial Year/s to which the amount relates ||Forum where dispute is pending |
|Sales Tax ||Assessment dues ||199.21 ||1993-1994 To 2004-2005 ||Commissioner of Sales Tax |
|Income Tax Act ||Demand Notice ||2.69 ||1997-1998 ||Pending for giving effect to order of CIT (A) |
|Income Tax Act ||Demand Notice ||0.82 ||2016-2017 ||Rectification u/s 154 of The I.T. Act 1961 filed with AO 1(1)(1) Mumbai |
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 financialinstitutions banks and government and dues to debenture holders.
9. The Company has not raised any monies by way of initial public offer further publicoffer (including debt instruments) and term loans. Accordingly the provisions of Clause3(ix) of the Order are not applicable to the Company.
10. In our opinion and according to the information and explanations given to us theCompany has not raised any money by way of term loans during the year under review.
11. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no fraud on the Company by its officers oremployees has been noticed or reported during the year.
12. In our opinion and according to the information and explanations 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 to the CompaniesAct 2013.
13. 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.
14. According to the information and explanation given to us the Company has enteredinto transaction with related parties in compliance with the provisions of sections 177and 188 of the Act. The details of such related party transactions have been disclosed inthe financial statements as required by the applicable accounting standards.
15. During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 is not applicable to the Company.
16. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected with him and hence provisions of section 192 of theCompanies Act 2013 are not applicable.
17. 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 ASHOKALCO-CHEM LIMITED ("the Company") as of 31 March 2017 in conjunction withour audit of the 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 reliable financial information asrequired under the 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 authorization's 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 2017 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. A. Kuvadia & Co. |
| ||Chartered Accountants |
| ||F.R.N. 105487W |
| ||sd/- |
| ||R. A. Kuvadia |
|Place: Mumbai ||(Proprietor) |
|Date: 18.05.2017 ||M.No. 040087 |