To the members of
Alfred Herbert (India) Limited
Report on the Standalone Financial Statements Opinion we have audited the accompanyingstandalone financial statements of alfred herbert (india) limited ("theCompany") which comprise the balance sheet as at 31st march 2019 and the statementof profit and loss and statement of cash flows for the year then ended and notes to thefinancial statements including a summary of significant accounting policies and otherexplanatory information. In our opinion and to the best of our information and accordingto the explanations 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 2019and 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 judgment were of mostsignificance in our audit of the standalone 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.
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.37800000 as at march 31 2019 to its wholly owned subsidiary. This subsidiary hasincurred loss during the year and as at the year end their networth stands eroded. TheCompany has recognized impairment of rs 4200000 as at march 31 2019 against the aboveloans and advances. 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 recoverabilities of the amount there against.
How our audit addressed the key audit matter. We understood and tested the design andoperating effectiveness of controls as established by management in determination ofappropriateness of the carrying value of loans and advances. We evaluated the Company'sprocess regarding impairment assessment by involving our expertise to assist in assessingthe appropriateness of the impairment. We evaluated the cash flow forecasts (withunderlying economic growth rate) by comparing them to the budgets provided by themanagement and our understanding of the industry's external factors. We assessed theCompany's sensitivity analysis and evaluated whether any reasonably foreseeable change inassumptions could affect the recoverabilities in future. We reviewed the advances of theamount with respect to the prudential norms guidelines for providing provision on advancesissued by reserve bank of india in this respect. Based on the above procedures performedwe observed the management's impairment assessment to be reasonable.
Other Information 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 financialstatements does not cover the other information and we do not express any form ofassurance conclusions thereon. In connection with our audit of the standalone financialstatements our responsibility is to read the other information and in doing so considerwhether the other information is materially inconsistent with the financial statements ofour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to be report that fact. We have nothing to reportin this regard. Responsibilities of management and those Charged with Governance for thestandalone financial statements the Company's board of Directors is responsible for thematters stated in section 134(5) of the act with respect to the preparation of thesestandalone financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in india including the accounting standards (as) specifiedunder section 133 of the act read with relevant rules issued thereunder. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the act for safeguarding of 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue 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 boardof Directors are also responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the Financial Statements our objectives areto obtain reasonable assurance about whether the standalone financial statements as awhole are free from material misstatement whether due to fraud or error and to issue anauditor's report that includes our opinion. Reasonable assurance is a high level ofassurance but is not a guarantee that an audit conducted in accordance with sas willalways detect a material misstatement when it exists. Misstatements can arise from fraudor error and are considered material if individually or in the aggregate they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese standalone financial statements. As part of an audit in accordance with sas weexercise professional judgment and maintain professional skepticism throughout the audit.We also: - identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol. - obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
- evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
- evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements. We communicate with those chargedwith governance regarding among other matters the planned scope and timing of the auditand significant audit findings including any significant deficiencies in internal controlthat we identify during our audit. We also provide those charged with governance with astatement that we have complied with relevant ethical requirements regarding independenceand to communicate with them all relationships and other matters that may reasonably bethought to bear on our independence and where applicable related safeguards. From thematters communicated with those charged with governance we determine those matters thatwere of most significance in the audit of standalone financial statements of the currentperiod and are therefore the key audit matters. We describe these matters in our auditors'report unless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.
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 ofthe Companies act 2013 (the act') we give in the annexure "a" a statementon the matters specified in paragraphs 3 and 4 of the said order to the extentapplicable.
2. According to information and explanations given to us and on the basis of suchchecks as we considered appropriate was carried out by us during the course of the auditof the company our report on the matters specified under the para 3(a) and 3(C) of non -banking financial Companies auditor's report (reserve bank) Directions 2008 is as follows:i) the Company which was incorporated prior to 9th January 1997 has applied forregistration 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 and theCertificate 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 Companyas on 31.03.2019 are as follows: investment income to total income : 80.67% totalinvestments to total assets : 53.73% in view of the above ratios the Company is entitledto hold Certificate of registration issued by the reserve bank of india as on 31.03.2019.Iii) the Company has not been classified as assets finance Company as defined innon-banking financial Companies acceptance of public Deposits (reserve bank) Directions1998 with reference to the business carried on by it during the financial year underreference. Iv) the Company has not been classified as micro finance institution as definedin non-banking financial Company - micro finance institutions (reserve bank) Directions2011 with reference to the business carried on by it during the financial year underreference. V) the board of Directors of the Company had passed a resolution at its meetingheld on 6th february 2019 for not accepting any public deposit. Vi) the Company has notaccepted any public deposit during the year under reference. Vii) the Company has compliedwith the prudential norms relating to income recognition accounting standards assetsclassification and provisioning for bad and doubtful debts as applicable to it in terms ofnon-banking financial (non-deposit accepting or holding) Companies prudential norms(reserve bank) Directions 2007.
Viii) the Company is not a systemically important non-Deposit taking nbfc as defined inparagraph 2 (1) (xix) of the non - banking financial (non- Deposit accepting or holding)Companies prudential norms (reserve bank) Directions 2007.
3. As required by section 143 (3) of the act we report to the extent applicable 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 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 2019 taken on record by the board of Directors none of the directors isdisqualified as on 31st march 2019 from being appointed as a director in terms of section164 (2) of the act.
(f) with respect to the adequacy of internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer 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 read with theCompanies (audit and auditors) amendment rules 2017 in our opinion and to the best ofour information and according to the explanations given to us: i. The Company hasdisclosed the impact of pending litigations on its financial position in its financialstatements refer note 3 to the financial statements; ii. The Company did not haveany long-term contracts including derivative contracts for which there were any materialforeseeable 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' report under section197(16): in our opinion and according to the information and explanations given to us theremuneration by way of Directors fees paid by the Company to its directors during thecurrent year is in accordance with the provisions of section 197 of the act. Theremuneration paid to any director is not in excess of the limit laid down under section197 of the act. The ministry of Corporate affairs has not prescribed other details undersection 197(16) which are required to be commented upon by us.
For a l p s & Co.
firm's icai regn. No. 313132e
partner Dated: 24th day of may 2019
m. No. 51793
Annexure "A" to Independent Auditors' Report
(referred to in paragraph 1 under the heading report on other legal andregulatory requirements' of our report of even date)
(i) (a) the Company has maintained proper records showing full particulars includingquantitative details and situations of its fixed assets.
(b) aii the fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the company and the nature of its assets. No materialdiscrepancies were noticed on such verification.
(c) the title deed of immoveable properties are held in the name of the Company.
(ii) the Company does not have any inventory. Accordingly provisions of Clause (ii) ofparagraph 3 of the aforesaid order are not applicable to the Company.
(iii) according to the information and explanation given to us the company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theact. Accordingly provisions of clauses (iii) (a) (b) and (c) of paragraph 3 of theaforesaid order are not applicable to the Company.
(iv) in our opinion and according to the information and explanation given to us theCompany has complied with the provisions of section 185 and 186 of the act in respect ofthe loans and investments made and guarantees and security provided by it as applicable.However no interest has been recognized during the year on loan given to its subsidiarycompany considering the prudential Guidelines issued by reserve bank of india (refer note5 to the financial statements).
(v) the Company has not accepted any deposits from the public within the meaning ofsections 73 to 76 or any other relevant provisions of the act and the rules framed thereunder.
(vi) the maintenance of Cost records has not been specified by the Central Governmentunder subsection (1) of section 148 of the act for the Company. (vii) (a) according tothe information and explanations given to us the Company is generally regular indepositing with appropriate authorities undisputed statutory dues including providentfund employee's state insurance income tax sales tax service tax Duty of CustomsDuty of excise value added tax Cess and any other statutory dues to the appropriateauthorities. On the basis of the records of the Company and the information andexplanations given to us there was no arrears of outstanding statutory dues as on thelast day of the financial year concerned outstanding for a period of more than six monthsfrom the date they became payable. (b) according to the records of the Company andaccording to the information and explanations given to us there are no dues of incometax sales tax service tax Duty of Customs Duty of excise value added tax and Cesswhich have not been deposited on account of any dispute.
(viii) the Company has no borrowings from financial institution bank government andthe Company has no debenture holders. Accordingly clause (viii) of paragraph 3 of theaforesaid order is not applicable to the Company.
(ix) according to the information and explanations given to us the Company has notraised money by way of initial public offer or further public offer including debtinstruments and term loan during the year. Accordingly clause (ix) of paragraph 3 of theaforesaid order is not applicable to the Company.
(x) 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 theyear. (xi) according to the information and explanations given to us no managerialremuneration is paid during the year by the Company. Accordingly clause (xi) of paragraph3 of the aforesaid order is not applicable to the Company.
(xii) the Company is not a nidhi Company. Accordingly clause (xii) of paragraph 3 ofthe aforesaid order is not applicable to the Company.
(xiii) on the basis of our examination of the books of account of the Company andaccording to the information and explanations given to us the transactions entered intowith the related parties are in compliance with section 177 and 188 of the act and thesame has been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) the Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.
(xv) on the basis of our examination of the records of the Company and according to theinformation and explanations given to us the Company has not entered into any non-cashtransactions with directors or persons connected with him.
(xvi) the Company is registered under section 45-ia of the reserve bank of india act1934 and has received registration certificate from the reserve bank of india and theCertificate no. Is n. 05. 04665 dated 29th november 2001. For a l p s & Co. Charteredaccountants firm's icai regn. No. 313132e
Dated: 24th day of may 2019
m. No. 51793
Report on the Financial Statements we have audited the internal financial controls overfinancial reporting of alfred herbert (india) limited ("the Company") as ofmarch 31 2019 in conjunction with our audit of the financial statements of the Companyfor the year ended on that date.
Management's Responsibility for Internal Financial Controls the Company's management isresponsible for laying down and maintaining internal financial controls based on theessential components of internal control stated in the Guidance note on audit of internalfinancial Controls over financial reporting issued by the institute of Charteredaccountants of india these responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the act.
Auditor's Responsibility our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the standards on auditing to the extent applicable to an auditof internal financial controls and the Guidance note on audit of internal financialControls over financial reporting (the "Guidance note") both issued by theinstitute of Chartered accountants of india. Those standards and the Guidance note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects. 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 internalfinancial control over financial reporting is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control over financial reportingincludes those policies and procedures that 1) pertain to the maintenance of records thatin reasonable detail accurately and fairly reflect the transactions and dispositions ofthe assets of the company; 2) provide reasonable assurance that transactions are recordedas necessary 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 timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting in view ofthe inherent limitations of internal financial controls over financial reportingincluding the possibility of collusion or improper management override of controlsmaterial misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk that the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
Opinion 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 march 31 2019 based on theessential components of internal control stated in the Guidance note on audit of internalfinancial 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
\partner Dated: 24th day of may 2019 m. No. 51793