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 at31st March 2020 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Cash Flow Statement for the year then endedand a summary of the significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us except for the effects of the matter described in the Basis forQualified Opinion section of our report the aforesaid financial statements give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31st 2020 and loss total comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis for Qualified Opinion
Refer to note no. 38 to the notes on accounts the Company has notprovided for its liability towards interest & part of principal loan waived earlierand impact of retained earnings in terms of draft rehabilitation scheme and now revoked byits consented lenders amounting to Rs. 146966.65 lakh accordingly the loss for the yearand loan liability would have been increased and shareholder's fund would have beenreduced to that extent.
Emphasis of Matters
We draw attention to the following matters in the Notes to FinancialStatements:
The note no 38 related to preparation of financial statement on goingconcern basis on the expectation of the company to get the necessary resolution forrestructuring/settlement of debts and to meet its financial obligation and continuation ofgiving effect to earlier consented scheme though now revoked.
Key Audit Matters - Meaning
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. In addition to the matter described in the Basis for Qualified Opinionsection we have determined that there are no key audit matters to be communicated in ourreport.
Due to continuous spreading of COVID-19 across India the IndianGovernment announced a strict 21-day lockdown on March 24 2020 which was furtherextended till June 30 2020 across the India and still going on with relaxations in parts.This has resulted in restriction on physical visit to client locations and the need forcarrying alternative audit procedures as per the Standards on Auditing prescribed by theInstitute of Chartered Accountants of India (ICAI).
In view of above stated situation the entire audit was carried outbased on remote access of the data as provided by the management. This has been carriedout based on the advisory on "Specific Considerations while conducting DistanceAudit/Remote Audit/ Online Audit under current Covid-19 situation" issued by theAuditing and Assurance Standards Board of ICAI. We have been represented by the managementthat the data provided for our audit purposes is correct complete reliable and aredirectly generated by the accounting system of the Company without any further manualmodifications.
We bring to the attention of users that the audit of the financialstatements has been performed in the aforesaid conditions.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these standalone financial statements that give a true and fairview of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance
with the Indian Accounting Standards (IND AS) prescribed undersection133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended and other accounting principles generally accepted in India.
This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions ofthe Act for safeguarding the assets of theCompany and 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 wereoperating 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 freefrommaterial misstatement whether due to fraud or error.
In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. Board of Directors are also responsible for overseeingthe Company's financial reporting process.
Our responsibility is to express an opinion on these standalonefinancial statements based on our audit. We have taken into account the provisions of theAct the accounting and auditing standards and matters which are required be included inthe audit report under the provisions of the Act and the Rules made there under and theOrderissued under section 143(11) of the Act.
We conducted our audit in accordance with the Standards on Auditingspecified under Section 143(10) of the Actand other applicable authoritativepronouncements issued by Institute of Chartered Accountants of India. ThoseStandardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonableassurance about whether the financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence aboutthe amounts and the disclosures in the standalone financial statements. 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. Inmaking those risk assessments the auditor considers the internal financial controlrelevant to the Company's preparation of the standalone financial statements that give atrue and fair view in order to design audit procedures that areappropriate in thecircumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our qualifiedopinion on the standalone financialstatements.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government interms of Section 143 (11) of the Act wegive in "Annexure A" a statement on the matters specified in paragraphs 3and 4of the Order.
As required by Section 143(3) of the Act based on our audit we reportthat:
(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge andbelief were necessary for the purposes of our audit;
(b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;
c) The Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income Statement ofChanges in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statementscomply with the Indian Accounting Standardsprescribed under section 133 of the Act.
(e) On the basis of the written representations received from thedirectors as on 31st March 2020 and taken onrecord 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 the internal financial controlsover financial reporting of the Company andthe operating effectiveness of such controlsrefer to our separate Report in "Annexure B". Our reportexpresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internal financialcontrols over financial reporting. '
g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements section 197(16) of the Act as amended In ouropinion and to the best of our information and according Toths explanations given to usthe remuneration paid by the Company to its directors during the year is inaccordance withthe provisions of section 197 of the Act.
(h) 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 inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements- Refer Note No. 36 & 37 to thefinancial statements;
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
iii. There were no amount which were required to be transferred to theInvestor Education and Protection Fund by the Company.
The Annexure referred to in Independent Auditors' Report to the membersof the Company on the standalonefinancial statements for the year ended 31 March 2020 wereport that:
1) (a) The Company has maintained proper records showing fullparticulars including quantitative details andsituation of its fixed assets.
(b) As explained to us the management has physically verified all thefixed assets during the year except theassets lying at erstwhile Jaspur and Kashipur unitswhich are not in its possession in a phased periodical manner which in our opinion isreasonable having regard to the size of the Company. We have been informed that nomaterial discrepancies were noticed on such physical verification during the year.
(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.
(2) (a) The inventory has been physically verified during the year bythe management in phased manner.
(b) In our opinion and according to the information and explanationsgiven to us the procedure of physical verification of inventory followed by themanagement is reasonable and adequate in relation to the size of the Company and thenature of its business.
(c) The Company has maintained proper records of inventories. Asexplained to us the discrepancies noticed on physical verification as compared to bookrecords were not material and have been dealt with in the books of account.
(3) According to the information and explanation given to us thecompany has not granted any loans secured orunsecured to companies firms or otherparties covered in the register required to be maintained under section 189of the Act.Accordingly paragraph 3 (iii) of the order is not applicable.
(4) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 185 and 186 of theAct with respect to the loans and investments made.
(5) In our opinion and according to the information and explanationsgiven to us the company has not accepted any deposits from the public.
(6) We were informed that company has maintained cost records pursuantto Companies (Cost Records and Audit) Rules 2014 as amended and prescribed by the CentralGovernment under section 148(1) of the Companies Act2013 and we are of the opinion thatprima facie 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 undisputedstatutory dues including Provident Fund Employees' State Insurance Income-tax Salestax Service Tax Duty of Custom Duty of Excise Value Added Tax Cess and any otherstatutory dues applicable to it with the appropriate authorities.
According to the information and explanations given to us noundisputed amounts payable in respect of Income-tax Service Tax Sales-tax Duty ofCustom Duty of Excise Cess Goods and Service Tax and other aforesaid statutory dueswere outstanding as at 31st March 2020 for a period of more than six months from the datethey became payable.
(b) The disputed statutory dues aggregating to Rs. 8.15 Lakh as on 31stMarch 2020 have not been deposited on account of matters pending before appropriateauthorities are as under:
|Name of the Statute ||Nature of Dues ||Amount ||Forum where Dispute is Pending |
|Nagar Nigam Act ||Sewerage Tax ||Rs. 8.15 Lakh ||Ld. Commisioner Nagar Nigam Gzb. |
(8) During last year the consent to the DRS interalia containing therestructuring of the debts of the company have been revoked by the consented securedlenders and demand raised for the dues outstanding in terms of their original sanctions.The company has protested to the said revocation and also submitted a revisedrestructuring/settlement scheme which is pending consideration with them (refer note no.38) we are unable to express any opinion about the default of Principal / Interest andperiod of default if any.
(9) The Company did not raise any money by way of initial public offeror further public offer (including debt instruments) and term loans during the year.Accordingly paragraph 3 (ix) of the Order is not applicable.
(10) According to the information and explanations given to us nofraud by the Company or on the Company by its officers or employees has been noticed orreported during the course of our audit.
(11) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Companies Act 2013.
(12) In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable.
(13) According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the financial statements as requiredby the applicable accounting standards.
14) According to the information and explanations given to us and basedon our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year.
(15) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Accordingly paragraph3(xv) of the Order is not applicable.
(16) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
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 ALPS INDUSTRIES LIMITED (the Company) as of 31 March 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear 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 bythe Institute of Chartered Accountants of India ('ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based onour audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. 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. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company's internal financial controls system over financialreporting.
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 inaccordancewith 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 inaccordance with authorizations of management and directors of thecompany; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized 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
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility collusion or improper management overrideof controls 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 periodsare 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 adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2020 based onthe 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.