Moneycontrol
SENSEX NIFTY
you are here:

Alok Industries Ltd.

BSE: 521070 | NSE: ALOKINDS | Series: NA | ISIN: INE270A01029 | SECTOR: Textiles - Weaving

BSE Live

Jul 13, 16:00
41.00 -2.15 (-4.98%)
Volume
AVERAGE VOLUME
5-Day
4,962,324
10-Day
11,544,172
30-Day
9,314,625
5,441,810
  • Prev. Close

    43.15

  • Open Price

    41.00

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    41.00 (3914944)

NSE Live

Jul 13, 15:59
39.05 -2.05 (-4.99%)
Volume
AVERAGE VOLUME
5-Day
31,699,934
10-Day
18,808,470
30-Day
7,267,020
34,487,361
  • Prev. Close

    41.10

  • Open Price

    40.45

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    39.05 (2408493)

Annual Report

For Year :
2018 2016 2015 2013 2012 2011 2010 2009 2008

Auditor's Report

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of Alok Industries Limited (“the Company”), which comprise the Balance Sheet as at 31st March 2018, and 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 ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Standalone Ind AS Financial Statements

The Company’s Board of Directors / Resolution Professional (RP) is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these standalone Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding 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 standalone Ind AS 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 standalone Ind AS financial statements based on our audit. In conducting 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 thereunder.

We conducted our audit of the standalone Ind AS financial statements 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 standalone Ind AS financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone Ind AS financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the standalone Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company’s preparation of the standalone Ind AS 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 standalone Ind AS financial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the standalone Ind AS financial statements.

Basis for Qualified Opinion:

1. As per Indian Accounting Standard 36 on Impairments of Assets, the Company is required to determine impairment in respect of fixed assets as per the methodology prescribed under the said Standard. However the Management of the Company has not done impairment testing for the reasons explained in note no. 54. In the absence of any working for impairment of the fixed assets as per Ind AS 36, the impact of impairment, if any on the standalone Ind AS financial statements is not ascertainable.

2. As mentioned in note no. 38 of the standalone Ind AS financial statements, the Company continued to recognise deferred tax assets upto March 31, 2017, Rs. 1423.11 crore. Considering the pending NCLT approval for resolution plan and absence of probable certainty and convincing evidence for taxable income in future, as required by the Ind AS -12, we are unable to ascertain the extent to which these deferred tax assets can be utilized.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph, the standalone Ind AS 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, of the state of affairs of the Company as at 31st March, 2018, and its loss, total comprehensive loss, the changes in equity and its cash flow for the year ended on that date.

Material Uncertainty Related to Going Concern

As mentioned in note no. 34 of the standalone Ind AS financial statements, the Company incurred a total comprehensive loss of Rs. 18,206.82 crores during the year ended March 31, 2018 and, as of that date, the Company’s current liabilities exceeded its total assets by Rs. 15,200.53 crores. As stated in note no. 32 of the standalone Ind AS financial statements, these events or conditions, along with other matters as set forth in note no. 33 of the standalone Ind AS financial statements, indicate that a material uncertainty exists that may cast significant doubt on the Company’s ability to continue as a going concern. Our opinion is not modified in respect of this matter.

Emphasis of Matter

On the basis of the facts mentioned in note no. 35 of the standalone Ind AS financial statements, we are unable to comment on the possible impact on standalone Ind AS financial statements, related disclosures and our reporting thereon, if any, regarding the said transactions until the final conclusion of the matter. Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

As required by the Companies (Auditors’ Report) Order, 2016 (“the Order”) issued by the Central Government in terms of Section 143(11) of the Act and except for the effects, if any, of the matters described in the basis for qualified opinion paragraph, we give in “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order.

As required by Section 143(3) of the Act, based on our audit, we report, to the extent applicable that:

1. Except for the matters described in the basis for qualified opinion paragraph, we have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.

2. Except for the effects, if any, of the matters described in the basis for qualified opinion paragraph, 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.

3. The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Changes in Equity and the Cash Flow Statement dealt with by this Report are in agreement with the relevant books of account.

4. In our opinion, the aforesaid standalone Ind AS financial statements comply with the Indian Accounting Standards prescribed under Section 133 of the Act, except for the effects, if any, of the matters described in the basis for qualified opinion paragraph.

5. The matter described under the Emphasis of Matter paragraph, basis for qualified opinion paragraph and Material Uncertainty Related to Going Concern paragraph above, in our opinion, may have an adverse effect on functioning of the Company and on the amounts disclosed in standalone Ind AS financial statements of the Company;

6. On the basis of the written representations received from the directors as on March 31, 2018 and taken on record by the Resolution Professional , none of the directors are disqualified as on 31st March 2018 from being appointed as a director in terms of Section 164(2) of the Act. Further as explained in the note no.53 of Ind AS financial statements none of the directors retiring by rotation at the ensuing Annual General Meeting of the Company render themselves ineligible for reappointment in terms of Section 164(2) of the Act. ;

7. With respect to the adequacy of the Internal Financial Controls with reference to Financial Statements of the Company, and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”. Except for the possible effects of the matter described in the Basis for Qualified Opinion paragraph in “Annexure B”, The Company has, in all material respects, an adequate internal financial controls system; and

8. With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financial position in its standalone Ind AS financial statements (Refer note no. 36 to the standalone Ind AS Financial Statements);

ii. The Company did not have any long-term contracts (except for those disclosed under contingent liability) including derivative contracts as at 31st March, 2018 for which there were any material foreseeable losses; and

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund.

ANNEXURE A TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 1 under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of the fixed assets.

(b) According to the information and explanations given to us, physical verification of major portion of fixed assets was conducted by the management during the year, which in our opinion is reasonable having regard to the size of the Company and nature of its business and no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us, the records examined by us and based on the examination of mortgage deeds provided to us, we report that, the title deeds of all immovable properties of land and buildings which are freehold are held in the name of the Company as at balance sheet date. In respect of immovable properties of land and buildings that have been taken on lease and disclosed as fixed asset in the standalone Ind AS financial statements, the lease agreements are in the name of the Company.

ii. The inventory, except goods-in-transit and stocks lying with third parties, have been physically verified by the management during the year. The discrepancies noticed on verification between the physical stocks and the book records were not material and have been dealt with in books of account.

iii. According to the information and explanations given to us, the Company has granted unsecured loans to the companies covered under Section 189 of the Act.

(a) As per information and explanation given to us, the terms and conditions on which loan have been granted to wholly owned subsidiaries covered under Section 189 of the Act is not, prima facie, prejudicial to the interest of the Company.

(b) As per the information and explanation given to us, the loans given by the Company do not carry any interest. The loans given were repayable on demand and as informed by the Management no amount was demanded during the year.

(c) There are no overdue amounts of more than 90 days in respect of loan granted to the parties listed in the register maintained under Section 189 of the Act.

iv. In our opinion and according to information and explanations given to us, the Company has complied with provisions of Section 185 and 186 of the Act in respect of loans, investments, guarantees and securities except for the following non-compliances:

(a) The company has not taken prior approval from public financial institutions before giving loans to the subsidiaries during the year, as required under sub-section 5 of Section 186.

(b) The company has not charged any interest on the loan given to the subsidiaries during the year ended March 31, 2018, sub-section 7 of Section 186.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits from the public in accordance with the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, the provision of Clause 3(v) of the Order is not applicable to the Company. According to the information and explanations given to us, no order has been passed by the Company Law Board or the National Company Law Tribunal or the Reserve Bank of India or any Court or any other Tribunal.

vi. According to the information and explanations given to us, the Company has maintained books of accounts and other records pursuant to the rules prescribed by the Central Government for the maintenance of cost records under Section 148(1) of the Act relating to manufacture of Woven greige fabric, woven processed fabric, spinning and polyester. We have broadly reviewed the cost records maintained by the Company and are of the opinion that prima facie, the specified accounts and records have been made and maintained. We have not, however, made a detailed examination of the same.

vii. (a) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there have been few delays during the year in depositing undisputed statutory dues, including Provident Fund, Employees’ State Insurance, Income-tax, Sales Tax, Service Tax, duty of customs, duty of excise and Value Added tax and other statutory dues with the appropriate authorities.

(b) According to the information and explanations given to us the undisputed amounts payable in respect of Income-tax, and other statutory dues in arrears as at March 31, 2018 for a period of more than six months from the date they became payable are as under:

Name of the Statute

Nature of Dues

Amount Involved (Rs. in Crores)

Period to which the amount Relates

Due Date

Income Tax

Corporate Dividend Tax and interest

2.56

A.Y. 2014-15

January 10, 2014

Act, 1961

Withholding tax

0.51

F.Y. 2015-16

Various dates upto March 31, 2016

(c) According to the records of the Company, there are no dues in respect of Income Tax, Sales Tax, Service Tax, duty of customs, duty of excise and Value Added Tax that have not been deposited as on March 31, 2018 on account of disputes, other than as follow:

Name of the Statute

Nature of Dues

Amount Involved (Rs. in Crores)

Period to which the amount Relates

Forum where dispute is pending

Income Tax Act, 1961

Tax and Interest

1.40

A.Y. 2011-12

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Tax and Interest

6.91

A.Y. 2010-11

Commissioner of Income Tax (Appeals)

Income Tax Act, 1961

Tax and Interest

114.54

A.Y. 2013-14

Income Tax Appellate Tribunal

Income Tax Act, 1961

Tax demands

0.02

A.Y 2009-10

Deputy Commissioner of Income Tax

Income Tax Act, 1961

Tax demands

16.96*

A.Y. 2012-13

Income Tax Appellate Tribunal

Income Tax Act, 1961

Withholding tax

0.83

A.Y. 2015-16

Deputy Commissioner of Income Tax (TDS)

Works Contract Tax Act, 1986

Works Contract Tax

0.59

F.Y. 2004-05

Deputy Commissioner of Sales Tax

Central Sales Tax Act, 1956

Central Sales Tax

0.58

F.Y. 2013.14

Joint Commissioner of Sales Tax

Central Sales Tax Act, 1956

Central Sales Tax

0.26

F.Y. 2008-09

The Company is in the process of filing appeal before Sales Tax Tribunal

* The ITAT vide Order dated 21.05.2018 has allowed the appeal in part and accordingly the company in this regard has furnished a letter to the Assessing Officer giving effect of the said ITAT order resulting in refund of Rs.33.68 crores.

vii. In our opinion and according to the information and explanations given to us, the Company has defaulted in the repayment of dues to banks, financial institutions and debenture holders. The Company has not taken loan or borrowings from Government. The details of default are as under :

(a) Continuous defaults in repayment of Principal and interest thereon at the end of the year to Banks are as under:

Name of the Lender

P / I

Period of Delay

Total Amount

Upto 30 days

31 to 90 days

91 to 180 days

181 to 1 year

More than 1 year

(Rs. in Crores)

(Rs.)

(Rs.)

(Rs.)

(Rs.)

(Rs.)

(Rs.)

Afrasia Bank

P

0.14

0

0

0

43.63

43.77

I

2.61

0.51

0

1.73

1.79

6.64

Allahabad Bank

P

2.08

4.16

4.16

6.25

24.97

25.14

I

10.84

2.83

0

8.4

9.38

31.45

Andhra Bank

P

17.33

12.20

23.93

61.76

118.35

233.59

I

0.12

0

0

0

0

0.12

Axis Bank Ltd.

P

20.74

19.08

9.58

55.02

575.32

679.76

I

66.07

33.15

0

93.61

33.10

225.93

Bank of Bahrain and Kuwait

P

0.05

0

0

2.92

0.89

3.86

I

1.01

1.05

0

0.98

0.12

3.17

Bank of Baroda

P

0.15

15.29

15.29

31.22

51.31

113.26

I

88.08

21.73

0

64.62

120.02

294.45

Bank of India

P

15.12

15.25

0.25

47.48

96.18

174.29

I

64.82

19.52

0

57.93

77.40

219.67

Bank of Maharashtra

P

4.46

2.44

3.00

11.40

11.93

33.23

I

32.05

10.10

0

19.21

29.20

90.56

Barclays Bank

P

4.81

7.59

4.50

16.21

20.23

53.34

I

0.21

0.42

0

1.42

0

2.06

Canara Bank

P

16.86

45.83

37.82

124.30

330.55

555.40

I

5.54

7.72

0

9.83

7.79

30.88

Central Bank Of India

P

0

39.30

0

41.32

37.60

118.22

I

51.73

34.19

0

100.02

75.7

261.64

Corporation Bank

P

7.33

17.42

0.16

19.09

36.61

80.64

I

34.59

12.41

0

36.25

56.25

139.5

DBS Bank

P

0

0

0

0.81

25.97

26.78

I

9.52

1.46

0

3.83

6.56

21.37

Dena Bank

P

10.10

21.94

16.54

54.64

102.10

205.32

I

60.74

20.34

0

57.52

94.81

233.41

Dombivli Nagari Sahakari Bank

P

0.57

1.27

1.71

3.81

8.41

15.80

Ltd.

I

0.13

0.07

0

0

0

0.20

IDBI Bank Ltd.

P

12.09

50.84

23.64

95.27

131.29

313.15

I

0.12

0

0

4.73

4.21

9.06

Indian Bank

P

0

0

0

12.24

14.39

26.63

I

30.66

10.65

0

30.65

34.47

106.43

Indian Overseas Bank

P

2.87

26.05

7.93

17.46

40.78

95.09

I

2.10

0

0

0

14.91

17.01

Kotak Mahindra Bank Ltd. (ING Vysya Bank)

P

0.04

0.08

0.08

0.29

2.15

2.65

I

2.43

0.80

2.38

2.11

7.72

New India Co-op Bank Ltd.

P

0

0

1.39

22.04

0.12

23.55

I

1.52

0.80

0

0.53

0

2.85

Landesbank Baden Wurttemberg

P

16.09

5.73

14.04

13.76

87.38

137

I

1.80

0.30

0

1.62

2.32

6.04

Noor Bank

P

0.63

0

0

36.71

0

37.06

I

0.81

0.73

0

0.50

0

2.04

Norddeutsche Land esbank Girozentral

P

11.46

2.14

0

7.30

36.87

57.77

I

1.36

0.23

0

0.50

0

2.10

Oriental Bank of Commerce

P

11.49

20.11

24.83

63.08

136.24

255.75

I

2.52

0

0

0

0.01

0.05

Punjab National Bank

P

1.37

14.41

0

3.43

16.09

35.30

I

0

1.56

0

83.91

111.27

196.74

Saraswat Co-Operative Bank Ltd.

P

0

0

0

0

31.02

31.02

I

4.19

1.06

0

3.14

3.27

11.67

SBM Bank (Mauritius) Ltd.

P

0.15

0

0

0

48.67

48.82

I

19.43

.98

0

3.32

4.17

27.9

State Bank of Bikaner & Jaipur

P

0.10

5.46

0.21

22.17

7.62

35.57

I

79.24

21.90

0

64.10

56.41

221.65

State Bank Of Hyderabad

P

0.16

6.59

0.31

15.94

8.45

31.45

I

101.53

28.99

0

86.30

104.90

321.72

State Bank of India

P

79.34

13.83

99.08

50

119.44

361.71

I

639.65

159.29

0

471.23

602.71

1872.88

State Bank of Mysore

P

12.58

13.23

0.16

21.56

5.40

52.93

I

76.82

21.16

0

62.07

63.79

223.84

State Bank of Patiala

P

0

8.97

0

39.78

17.71

66.46

I

151.49

26.71

0

75.18

75.43

328.81

State Bank of Travancore

P

4.53

1.42

0

15.71

0

21.67

I

102.39

21.45

0

51.48

46.23

221.55

Syndicate Bank

P

22.36

13.49

23.42

75.35

184.16

318.80

I

1.03

0

0

2.61

0

3.64

The Federal Bank Ltd.

P

1.09

2.62

1.53

6.18

25.95

37.38

I

0

1.45

0

2.34

1.93

5.73

The Jammu & Kashmir Bank

P

12.56

14.58

19.31

56.55

206.76

309.78

Ltd.

I

4.01

0

0

0

2.18

6.19

The Karur Vysya Bank Ltd.

P

0.04

7.49

0.08

0.29

7.90

15.82

I

6.49

4.67

0

13.51

13.73

38.4

UCO BANK

P

0

0

0

173.16

0

173.16

I

19.72

6.12

0

17.82

15.34

59

Union Bank of India

P

0.57

22.05

6.24

11.35

47.23

87.46

I

47.44

16.75

0

47.87

115.84

180.02

United Bank of India

P

36.67

39.08

7.07

103.45

29.88

216.17

I

53.65

21.79

0

64.54

55.76

195.74

Vijaya Bank

P

0.12

0.06

0.18

0.39

4.10

4.86

I

4.52

0

0

4.62

0

9.14

VTB Capital Ltd.

P

1.58

(0.55)

0

5.89

383.14

390.06

I

16.97

7.12

0

14.40

0

38.49

Notes :

P : Principal I: Interest

(b) Continuous defaults in repayment of Principal and interest thereon at the end of the year to Financial Institutions are as under:

Name of the Lender

P / I

Period of Delay

Total Amount

Upto 30 days

31 to 90 days

91 to 180 days

181 to 1 year

More than 1 year

(Rs. in Crores)

(Rs.)

(Rs.)

(Rs.)

(Rs.)

(Rs.)

(Rs.)

Export Import Bank of India

P

7.06

18.92

13.31

27.22

396.37

462.90

I

34.57

0

0

19.53

2.29

56.39

ECL Finance Limited

P

0.02

0

0

0

0

0.02

I

0

0

0

0

0

0

FMO

P

0.81

(0.43)

0

0.45

169.32

169.24

I

3.44

1.26

0

1.33

0

6.03

IFCI Limited

P

25.15

0.31

25.31

105.72

233.26

389.76

I

33.41

14.55

0

17.09

54.91

119.98

Life Insurance Corporation of

P

0

2.42

0

14.60

68.87

85.89

India

I

50.43

8.21

0

16.33

49.41

124.39

SICOM Ltd.

P

0

0

0

1.09

74.72

75.82

I

(0.94)

2.86

0

5.68

2.86

10.45

(c) Continuous defaults in repayment of Principal and interest thereon at the end of the year to Debenture Holders are as under:

Name of the Lender

P / I

Period of Delay

Total Amount

Upto 30 days

31 to 90 days

91 to 180 days

181 to 1 year

More than 1 year

(Rs. in Crores)

(Rs.)

(Rs.)

(Rs.)

(Rs.)

(Rs.)

(Rs.)

Axis Bank Ltd.

P

0

0

0

3.16

55.50

58.66

I

4.07

1.61

0

1.61

0.70

7.29

IFCI Limited

P

0

0

0

8.69

84.62

93.31

I

6.71

2.85

0

2.85

15.51

27.92

Centre For Development of

P

0

0

0

0

0.01

0.01

Telematics

I

0

0

0

0

0.02

0.02

CSEB

P

0

0

0

0

0.76

0.76

I

0

0

0

0

1.71

1.71

LIC of India

P

0

37.50

0

55.35

104.58

197.44

I

43.41

9.07

0

9.07

60.79

122.42

The Jammu & Kashmir Bank

P

0

0

33.30

10.85

53.26

97.44

Ltd.

I

0

0

3.27

3.27

5.31

11.85

ix. According to the information and explanations given to us and based on records examined by us we are of the opinion that the moneys raised by way of term loans by the Company during the year were applied for the purpose for which it was raised. The Company has not raised money by way of initial public offer or further public offer (including debt instruments) during the year.

x. 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 course of our audit. However, as per the facts mentioned in note no. 35 of the standalone Ind AS financial statements, we are unable to comment on the possible impact on standalone Ind AS financial statements, related disclosures and our reporting thereon, if any, regarding the said transactions until the final conclusion of the matter.

xi. According to the information and explanations given to us and based on our examination of the records, we report that the Company has paid/provided managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. According to the information and explanations given to us and based on our examinations of the records of the Company, transactions with the related parties are in compliance with sections 177 and 188 of the Act, where applicable. Transactions with related party post July 18, 2017 were approved by RP. The details of such related party transactions have been disclosed in the standalone Ind AS financial statements as required under Indian Accounting Standard (Ind AS) 24, ‘Related Party Disclosures’ specified under Section 133 of the Act.

xiv. According to the information and explanations give to us and based on our examination of the records, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. According to the information and explanations given to us and based on our examination of the records, the Company has not entered into non-cash transactions with directors or persons connected with him as prescribed under section 192 of the Act. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. According to the information and explanations given to us, the Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

ANNEXURE B TO THE INDEPENDENT AUDITORS’ REPORT ON THE STANDALONE IND AS FINANCIAL STATEMENTS OF ALOK INDUSTRIES LIMITED

(Referred to in paragraph 2(g) under ‘Report on Other Legal and Regulatory Requirements’ section of our report of even date)

REPORT ON THE INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING 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 Alok Industries Limited (“the Company”) as of 31st March, 2018 in conjunction with our audit of the standalone Ind AS financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

The Company’s management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. 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 Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance 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 auditors’ 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 over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s 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 company’s 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 company’s assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over Financial Reporting

Because of the inherent limitations of internal financial controls over 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.

Basis for Qualified Opinion

According to the information and explanations given to us and based on our audit, the following material weakness has been identified as at March 31, 2018:

1. On the basis of the facts mentioned in note no. 35 of the standalone Ind AS financial statements, we are unable to comment on the possible impact on standalone Ind AS financial statements, related disclosures and our reporting thereon, if any, regarding the said transactions until the final conclusion of the matter.

2. The Company’s internal financial controls over obtaining certain bank balance confirmations were not operating effectively, which could potentially result in affecting the expenses such as interest, bank charges etc and bank balances in the books of the Company.

A ‘material weakness’ is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the company’s annual or interim financial statements will not be prevented or detected on a timely basis.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the possible effects of the matters described in the Basis for Qualified Opinion paragraph above, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March 2018, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.

We have considered the material weakness identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2018 Standalone Ind AS financial statements of the Company, and these material weaknesses do not affect our opinion on the Standalone Ind AS financial statements of the Company.

For SHAH GUPTA & CO. For NBS & Co.

Chartered Accountants Chartered Accountants

Firm Registration No.: 109574W Firm Registration No. 110100W

D. V. Ballal Devdas V. Bhat

Partner Partner

M. No.13107 M. No. 048094

Place : Mumbai Place : Mumbai

Date : August 10, 2018 Date : August 10, 2018