The Members of
Alfred Herbert (India) Limited
Report on the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements ofALFRED HERBERT (iNDiA) LiMiTED ("the Company") which comprise the Balance Sheetas at 31st March 2020 and the statement of profit and loss statement of changes inequity and statement of cash flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation.
in our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in india of the state of affairs of the Company as at March 31 2020and its profit changes in equity and its cash flows for the year 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 of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the institute of Chartered Accountants ofindia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
Key Audit Matter
Assessment of impairment of investments and loans/ advances given tosubsidiaries (Refer note to the accompanying note forming integral part of the StandaloneFinancial Statements).
The Company had given loans and advances which aggregates to Rs. 460lakhs as at March 31 2020 to its wholly owned subsidiary. This subsidiary has incurredloss during the year and as at the year end their networth stands eroded. The Company hasrecognized impairment of Rs 460 lakhs as at March 31 2020 against the above loans andadvances.
We consider this a key audit matter given the relative significance ofvalue of loans and advances to the financial statements and extent of managementsjudgements and estimates involving recover abilities of the amount there against.
How our audit addressed the key audit matter.
We understood and tested the design and operating effectiveness ofcontrols as established by management
in determination of appropriateness of the carrying value of loans andadvances.
We evaluated the Company's process regarding impairment assessment byinvolving our expertise to assist in assessing the appropriateness of the impairment. Weevaluated the cash flow forecasts (with underlying economic growth rate) by comparing themto the budgets provided by the management and our understanding of the industry's externalfactors.
We assessed the Company's sensitivity analysis and evaluated whetherany reasonably foreseeable change in assumptions could affect the recover abilities infuture. We reviewed the advances of the amount with respect to the prudential normsguidelines for providing provision on advances issued by Reserve Bank of india in thisrespect. Based on the above procedures performed we observed the management's impairmentassessment to be reasonable.
The Company's Board of Directors is responsible for the Otherinformation. The other information comprises the information included in the board'sReport Corporate Governance and shareholders information but does not include in thefinancial statements and our auditor's report theron.
our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusions 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 financial statements of ourknowledge obtained in the audit or otherwise appears to be materially misstated.
if based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to be report that fact.we have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements
The Company's board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements 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 indian accountingstandards (indas) specified under section 133 of the act read with relevant Rules issuedthereunder. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the act for safeguarding of 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 standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
in preparing the standalone financial statements the board ofDirectors is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the board of Directors either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.
those board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial 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 skepticism 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 financial controls relevant tothe 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 onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.
- Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. if we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements orif such disclosures areinadequate to modify our opinion. our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a
- Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions 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 standalonefinancial statements of the current period and are therefore the key audit matters. wedescribe these matters in our auditors' 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("the order") issued by the Central Government of india in terms of sub-section(11) of Section 143 of the Companies Act 2013 ('the Act') we give in the Annexure"A" a statement on the matters specified in paragraphs 3 and 4 of the saidOrder to the extent applicable.
2. According to information and explanations given to us and on thebasis of such checks as we considered appropriate was carried out by us during the courseof the audit of the company our report on the matters specified under the Para 3(A) and3(C) of Non - Banking Financial Companies Auditor's Report (Reserve Bank) Directions 2008is as follows:
i) The Company which was incorporated prior to 9th January 1997 hasapplied for registration as provided in section 45-iA of Reserve Bank of india Act 1934(2 of 1934) and has received registration certificate from the Reserve Bank of india andthe Certificate No. N. 05. 04665 dated 29th November 2001. The Company is engaged in thebusiness of Non Banking Financial institution.
ii) The asset/income pattern of the Company as on 31.03.2020 are asfollows:
investment income to Total income: 53.81%
Total investments to Total Assets : 57.59%
in view of the above ratios the Company is entitled to holdCertificate of Registration issued by the Reserve Bank of india as on 31.03.2020.
iii) The Company has not been classified as Assets Finance Company asdefined in Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank)Directions 1998 with reference to the business carried on by it during the financial yearunder reference.
iv) The Company has not been classified as Micro Finance institution asdefined in Non-Banking Financial Company - Micro Finance institutions (Reserve Bank)Directions 2011 with reference to the business carried on by it during the financial yearunder reference.
v) The Board of Directors of the Company had passed a resolution at itsmeeting held on 11th December 2019 for not accepting any public deposit.
vi) The Company has not accepted any public deposit during the yearunder reference.
vii) The Company has complied with the prudential norms relating toincome recognition accounting standards assets classification and provisioning for badand doubtful debts as applicable to it in terms of Non-Banking Financial (Non-depositAccepting or Holding) Companies Prudential Norms(Reserve Bank) Directions 2007.
viii) The Company is not a Systemically important Non-Deposit takingNBFC as defined in paragraph 2 (1) (xix) of the Non - Banking Financial (Non-DepositAccepting or Holding) Companies Prudential Norms (Reserve Bank) Directions 2007.
3. As required by Section 143 (3) of the Act we report to the extentapplicable that :
(a) we have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
(b) in our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books.
(c) The Balance sheet the statement of profit and Loss statement ofChange in Equity and the Cash Flow statement dealt with by this Report are in agreementwith the books of account.
(d) in our opinion the aforesaid standalone financial statementscomply with the indian Accounting standards specified under section 133 of the act readwith rule 7 of the Companies (accounts) rules 2014.
(e) on the basis of the written representations received from thedirectors as on 31st March 2020 taken on record by the board of Directors none of thedirectors is disqualified as on 31st march 2020 from being appointed as a director interms of section 164 (2) of the Act
(f) with respect to the adequacy of internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referour separate report in Annexure "B".
(g) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 readwith the Companies (Audit and Auditors) Amendment Rules 2017 in our opinion and to thebest of our information and according to the explanations given to us:
i. The Company does not have any pending litigations which would haveimpact on its financial position;
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to betransferred to the investor Education and Protection Fund by the Company.
4. With respect to the matter to be included in the Auditors' Reportunder section 197(16):
in our opinion and according to the information and explanations givento us the remuneration by way of Directors Fees paid by the Company to its directorsduring the current year is in accordance with the provisions of section 197 of the Act.The remuneration paid to any director is not in excess of the limit laid down undersection 197 of the Act. The Ministry of Corporate Affairs has not prescribed other detailsunder section 197(16) which are required to be commented upon by us.
For A L P s & CO. Chartered Accountants Firm's iCAi Regn. No.313132E
(A.K.Khetawat) partner M. No.52751 UDiN NO.20052751AAAABU7943
Dated: 30th day of July 2020
Annexure "A" to Independent Auditors' Report
(Referred to in paragraph 1 under the heading 'Report on Other Legaland Regulatory Requirements' of our report of even date)
(i) (a) The Company has maintained proper records
showing full Particulars including quantitative details and situationsof its fixed assets.
(b) All the fixed assets have not been physically verified by themanagement during the year but there is a regular programme of verification which in ouropinion is reasonable having regard to the size of the company and the nature of itsassets. No material discrepancies were noticed on such verification.
(c) the title deed of immoveable properties are held in the name of theCompany.
(ii) the Company does not have any inventory. Accordingly provisionsof Clause (ii) of paragraph 3 of the aforesaid order are not applicable to the Company.
(iii) according to the information and explanation given to us thecompany has not granted any other loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained undersection 189 of the act except to its wholly owned subsidiary company. the terms andconditions are not prejudicial to the interest of the Company. However no interest hasbeen recognized during the year on loan given to its subsidiary company and full provisionfor doubtful is made considering the prudential Guidelines issued by reserve Bank ofindia (refer note 7.3 to the financial statements).
(iv) in our opinion and according to the information and explanationgiven to us the Company has complied with the provisions of section 185 and 186 of theact in respect of the loans and investments made and guarantees and security provided byit as applicable.
(v) the Company has not accepted any deposits from the public withinthe meaning of sections 73 to 76 or any other relevant provisions of theAct and the rulesframed there under.
(vi) the maintenance of Cost records has not been specified by theCentral Government under subsection (1) of section 148 of the act for the Company.
(vii) (a) according to the information and explanations
given to us the Company is generally regular in depositing withappropriate authorities undisputed statutory dues including provident Fund Employee'sstate insurance income tax sales tax service tax Duty of Customs Duty of excisevalue added tax Cess and any other statutory dues to the appropriate authorities. on thebasis of the records of the Company and the information and explanations given to usthere was no arrears of outstanding statutory dues as on the last day of the financialyear concerned outstanding for a period of more than six months from the date they becamepayable.
(b) according to the records of the Company and
according to the information and explanations given to us there areno dues of income Tax Sales Tax Service Tax Duty of Customs Duty of Excise valueadded tax and Cess which have not been deposited on account of any dispute.
(viii) the Company has no borrowings from financial institution bankgovernment and the Company has no debenture holders. Accordinglyclause (viii) ofparagraph 3 of the aforesaid order is not applicable to the Company.
(ix) according to the information and explanations given to us theCompany has not raised money by way of initial public offer or further public offerincluding debt instruments and term loan during the year. accordingly clause (ix) ofparagraph 3 of the aforesaid order is not applicable to the Company.
(x) according to the information and explanations given to us no fraudby the Company or on the Company by its officers or employees has been noticed or reportedduring the year.
(xi) according to the information and explanations given to us nomanagerial remuneration is paid during the year by the Company. accordingly clause (xi)of paragraph 3 ofthe aforesaid order is not applicable to the Company.
(xii) the Company is not a Nidhi Company. accordingly clause (xii) ofparagraph 3 of the aforesaid order is not applicable to the Company.
(xiii) on the basis of our examination of the books of account of theCompany and according to the information and explanations given to usthe transactionsentered into with the related parties are in compliance with section 177 and 188 of theact and the same has been disclosed in the Financial statements as required by theapplicable accounting standards.
(xiv) the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview.
(xv) on the basis of our examination of the records of the Company andaccording to the information and explanations given to us the Company has not enteredinto any non-cash transactions with directors or persons connected with him.
(xvi) the Company is registered under section 45-^ of the Reserve Bankof india act 1934 and has received registration certificate from the reserve bank ofindia and the Certificate No. is N. 05. 04665 dated 29th November 2001.
for a L p s & Co.
Chartered Accountants firm's iCAi regn. No. 313132E
| ||(A.K.Khetawat) |
|Kolkata ||partner |
|Dated: 30th day of July 2020 ||M. No. 52751 |
Annexure "B" to Independent Auditors' Report
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act
2013 ("the Act")
Report on the Financial Statements
We have audited the internal financial controls over financialreporting of Alfred Herbert (india) Limited ("the Company") as of March 31 2020in conjunction with our audit of the financial statements of the Company for the yearended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for laying down and maintaininginternal financial controls based on 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 These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Act.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. we conducted our audit inaccordance with the Standards on Auditing to the extent applicable to an audit ofinternal financial controls and the Guidance Note on Audit of internal Financial ControlsOver Financial Reporting (the "Guidance Note") both issued by the institute ofChartered Accountants of india. Those Standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
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 reportingincludes 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 of therisks of material 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 internal financial controls system overfinancial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. a company's internal financial control overfinancial 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 financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and
3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over FinancialReporting
in view 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 2020 basedon the 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 A L p s & Co. Chartered Accountants firm's iCAi regn. No.313132E
| || |
|Kolkata || |
|Dated: 30th day of July 2020 || |
M. No. 52751