To
The Members of ALUMINIUM INDUSTRIES LTD
Report on Financial Statements
We have audited the accompanying financial statements of ALUMINIUM INDUSTRIES LTD ("the
Company"), which comprise the Balance Sheet as at 31" March 2016 the
Statement of Profit and Loss and the Cash Flow Statement for the year then ended, and a
summary of significant accounting policies and other explanatory information.
Management’s Responsibilities for the 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 of these
financial statements that give a true and fair view of the financial position, financial
performance 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, read with Rule 7 of the Companies (Accounts) Rules, 2014.
This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding of the assets of the Company
and for preventing and detecting frauds and other irregularities; selection and
application of appropriate 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 financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these financial statements based on our
audit. We have taken into account the provisions of the Act, the accounting and auditing
standards and matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under.
We conducted our audit in accordance 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 the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
the disclosures in the financial statements. The procedures selected depend on the
auditor’s judgment, including the assessment of the risks of material misstatement of
the financial statements, whether due to fraud or error. In making those risk assessments,
the auditor considers internal financial control relevant to the Company’s
preparation of the financial statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of the accounting policies used
and the reasonableness of the accounting estimates made by the Company’s Directors,
as well as evaluating the overall presentation of the financial statements. •
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the financial statements. .
Basis for Qualified Opinion:
(i) Attention is invited to Note No. 3 read with Note 2 (a) (iii) of Notes to Accounts
regarding non conversion of Preference Share Capital to Equity Share Capital at Par
contrary to order of HON’BLE BOARD FOR INDUSTRIAL AND FINANCIAL RECONSTRUCTION (BIFR)
dated 12.02.2014
(ii) Attention is invited to Note No. 3C regarding nonredemption of redeemable
preference shares which is in contravention to the provisions of Act;
Qualified Opinion: -
In our opinion and to the best of our information and according to the explanations
given to us, except for the effect of the matter described in the Basis for Qualified
Opinion paragraph, the financial statements give the information required by the Act in
the manner so required and give a true and fair view in conformity with the accounting
principles generally accepted in India:
(a) In the case of the Balance sheet, ofihe state of affairs of ALUMINIUM INDUSTRIES
LTD as at 31" March 2016;
and
(b) in the case of the Statement of Profit & Loss Account, of the loss for the year
ended on that date.
(c) In the case of Cash Flow Statement, of the cash flows for the year ended on that
date.
Emphasis of Matter
(i) The accumulated losses of the Company have exceeded its entire net worth and it
became a Sick
Industrial Company within the meaning of the Sick Industrial Companies [Special
Provisions] Act, 1985. The accounts have, however, been prepared by the management on a
‘Going Concern’ basis, as the Hon’ble BIFR has approved the scheme (SS
- 14) on 12.02.2014. [Refer Note No. 26 read with Note 2 of Notes to Accounts]
(ii) Attention is invited to Note No. 29 regarding compilation of accounting details /
information on the basis of records available at the suspended manufacturing units on best
efforts basis.
(iii) Attention is invited to Notes No. 32 regarding pending reconciliation and / or
confirmations of accounts of sundry debtors, sundry creditors, secured loans, unsecured
loans, banks and loans and advances given;
(iv) Attention is invited to Note No. 33 regarding non provisioning of interest/
penalties as well as Liquidated damages on delay in repayment of installments of Secured
debts due to banks, financial institutions and ARC during the reporting period;
(v) Attention is invited to Note No. 34 regarding non provisioning of interest/
penalties in respect of Deferred & Arrear Sales Tax, Work Contract Tax, Excise &
Customs Duty demands during the reporting period in view of the Scheme sanctioned by the
Hon’ble BIFR on 12.02.2014
Our opinion is not qualified in respect of this matter.
Report on Other Legal & 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 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 that:
a) We have sought & obtained all the information and explanations to the extent
available, which to the best of our knowledge and belief were necessary for the purpose of
our audit;
b) In our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books [and proper returns
adequate for the purpose of our audit have been received from branches not visited by
us.];
c) The Balance Sheet, Statement of Profit & Loss and Cash Flow Statement dealt with
by this report are in agreement with books of account [and with the returns received from
branches not visited by us.];
d) Except for the effects of the matter described in Para (iv) of Basis of Qualified
Opinion and, the Balance Sheet and Statement of Profit and Loss and Cash Flow
Statement dealt with by this report comply with the Accounting Standards referred to in
Section 133 read with Rule 7 of the Act, read with Rule 7 of the Companies (Accounts)
Rules 2014;
e) On the basis of written representations received from the Directors as on 31st March
2016 and taken on record by the Board of Directors, none of the directors of the Company
are disqualified as on 31st March, 2016 from being appointed as a director as 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) 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 financial statements disclose the impact of pending litigations on the financial
position of the Company-Refer Note No. 25 to the Financial Statements.
ii) The company does not have any long-term contracts requiring a provision for
material foreseeable losses.
iii) The company does not have any amounts required to be transferred to the Investor
Education and Protection Fund.
| Place: Kochi |
For BALAKRISHNAN & CO |
| Date: 31st August, 2016 |
Chartered Accountants |
|
FRN. 011890S |
|
CArBALAKRISHNAN M |
|
(Partner) M.No.218798 |
ANNEXURE A’ TO THE INDEPENDENT AUDITOR’S
REPORT
The Annexure refers to in Independent Auditor’s Report to the members of the
Company on the Financial Statements for the year ended 31 st March 2016, we report that
1. a) The Company is in the process of updating its fixed assets records to show
full particulars including quantitative details and situation of fixed assets.
b) As informed to us, no physical verification of assets was carried out by the
management except at Switchgear Division, Mannar, Relays Division, Trivandrum, and
Machinery Division, Hyderabad and the differences noticed on physical verification carried
out has been properly dealt with in the books of accounts. We are unable to express an
opinion with regard to discrepancies, if any, which may arise on physical verification of
the assets at remaining units.
c) According to the information and explanations given to us and on the basis of the
examination of the records of the company, The title deeds of the immovable properties of
the Company are held in its name of the company,.
2. In our opinion and according to the information & explanations provided to us,
the inventory has been physically verified by the management at reasonable intervals. The
discrepancies noticed on such verification (wherever carried out) as compared to book
records were not material in relation to the operations of the Company and the same have
been properly dealt with in the books of account.
3. The Company has not granted any loan, secured / unsecured to Companies, Firms,
Limited Liability Partnerships or other parties covered in the register maintained u/s.
189 of the Companies Act, 2013. In view of this, sub clause (a) & (b) of clause 3 are
not applicable
4. In our opinion and according to the information and explanations given to us, the
Company has not granted any loan, investments, guarantees and securities to the parties
covered u/s. 185 and 186 of the Act.
5. In our opinion and according to the information and explanations given to us, the
Company has not accepted any deposit from the public during the year to which the
directives issued by the Reserve Bank of India and the provisions of Section 73 to 76 or
any other relevant provision of the Act and Rules framed there under are applicable.
6. The Central Government, vide Sec. 148 (1) of the Companies Act, 2013, prescribed
maintenance of cost
records for all listed companies engaged in manufacturing. In our opinion, the Company
is in the process of maintaining the cost records for the products of the Company as
prescribed in the said rules.
7. a) The Company is generally regular in depositing with the appropriate authorities
the undisputed statutory dues viz Provident Fund, Employees State Insurance, Professional
Tax, Service Tax, Excise & Customs Duty, Value Added Tax and other statutory dues with
appropriate authorities during the year except in some cases, there have been delays
ranging up to 180 days in payment of statutory dues.
b) According to the information and records of the Company made available to us, the
dues outstanding in respect of Sales Tax / Custom Duty / Excise Duty / Cess which have not
been deposited on account of various disputes of the Company are as under:
| Name of Statute |
Nature of Dues |
Amount Rs. in Lakhs |
Period to which amount relates |
Forum where Dispute is Pending |
| Kerala Value added tax Act, 2003 |
Kerala Value added tax |
2.61 |
FY 2007-08 |
Commissi oner
(Appeal) |
| Kerala Value added tax Act, 2003 |
Central Sales Tax |
160.94 |
From FY 2007-08 to FY 2013-14 |
Commissi oner
(Appeal) |
| Custom Act 1962 |
Custom Duty |
745.79 |
From FY 1991-92 to FY 1994-95 |
Customs, Excise
and
Service
Tax
Appellate
Tribunal |
8) In our opinion and according to the information and explanations given to us, the
repayment of dues to financial institutions, banks or debenture holders are governed by
the Scheme Sanctioned by BIFR on 12.02.2014. There were delay in payment of installment to
Secured lenders as per the Schedule of SS-14, and for the same, the company has informed
that it has requested the respective secured lenders for waiver of liquidated damages on
such delayed payment of installment.
9) The Company did not raise any money by way of Initial Public Offer or Further Public
Offer and Term Loans
during the year. Accordingly Paragraph 3 (ix) of The Order is not applicable.
10) In our opinion and according to the information and explanations given to us, no
material fraud by the company or on the Company by its officers or employees has been
noticed or reported during the year.
11) In our opinion and according to the information and explanations given to us, the
Company has paid/ provided for managerial remuneration in accordance with the requisite
approval mandated by the provisions of Section 197 read with Schedule V to the Act.
12) in our opinion and according to the information and explanations given to us, the
company is not a Nidhi Company. Accordingly Paragraph 3 (xii) of the Order is not
applicable.
13) In our opinion and according to the information and explanations given to us,
transactions with the related parties are in compliance with Section 177 and 188 of the
Act where applicable and details of such transactions have been disclosed in the Financial
Statements as required by the applicable Accounting Standards.
14) In our opinion and according to the information and explanations given to us, the
Company has raised money by way of Private Placement of Equity Shares to the extent of ?
3,898 Lakhs as per the Scheme Sanctioned by BIFR as on 12.02.2014 in accordance with
Section 42 of the Act and were utilized for the purpose for which the fund were raised.
15) In our opinion and according to the information and explanations given to us, the
company has not entered into any non-cash transactions with directors or persons connected
with them. Accordingly Paragraph 3 (xv) of the Order is not applicable.
16) The company is not required to be registered under section 45-IA of the Reserve
Bank of India Act, 1934. Accordingly Paragraph 3 (xvi) of the Order is not applicable.
| Place: Kochi |
For BALAKRISHNAN & CO |
| Date: 31st August, 2016 |
Chartered Accountants |
|
FRN.011890S |
|
CA. BALAKRISHNAN M |
|
(Partner) M.No.218798 |
ANNEXURE B’ TO THE INDEPENDENT AUDITOR’S REPORT .
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section
143 of the Companies Act, 2013. ("the Act")
We have audited the internal financial controls over financial reporting of the Company
as of March 31,2016 in conjunction with our audit of the financial statements of the
Company for the year ended on that date.
Management’s Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of Internal Financial
Reporting stated in the Guidance Note on Audit of Internal Financial Controls over
Financial Reporting issued by the Institute of Chartered Accountants of India [ICAI].
These responsibilities include the design, implementation and maintenance of adequate
internal financial controls that were operating effectively for ensuring the orderly and
efficient conduct of its business, including adherence to company’s policies, the
safeguarding of its assets, the prevention and detection of frauds and errors, the
accuracy and completeness of the accounting records, and the timely preparation of
reliable financial information, as required under the Companies Act, 2013.
Auditors ’Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
(the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed
to be prescribed under section 143(10) of the Companies Act, 2013, to the extent
applicable to an audit of internal financial controls, both applicable to an audit of
Internal Financial Controls and, both issued by the Institute of Chartered Accountants of
India. Those Standards and the Guidanae Note require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
assessing the risk that a material weakness exists, and testing and evaluating the design
and operating effectiveness of internal control based on the assessed risk. The procedures
selected depend on the auditor’s judgment, including the assessment of the risks 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 to
provide a basis for our audit opinion on the Company’s internal financial controls
system overfinancial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in
accordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of
unauthorized acquisition, use, or disposition of the companys 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 financial
reporting, including the possibility of collusion or improper management override of
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 financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion and best of our information and according to the explanations given to
us, the Company is in the process of developing an adequate internal financial controls
system over financial reporting and therefore we are unable to comment on the
effectiveness of such internal financial controls over financial reporting were operating
as at March 31,2016 based on the internal control over financial reporting criteria
established by the Company considering the essential components of Internal Financial
Reporting stated in the Guidance Note on Audit of Internal Financial Controls over
Financial Reporting issued by the ICAI.
| Place: Kochi |
For BALAKRISHNAN & CO |
| Date: 31" August, 2016 |
Chartered Accountants |
|
FRN. 011890S |
|
CA. BALAKRISHNAN M |
|
(Partner) M.No.218798 |
+91-9892691696
