| We have audited accompanying financial statements of APT Packaging
Limited ('the Company'), which comprise the Balance Sheet as at
31** March 2014, the Statement of Profit & Loss and the Cash Flow
Statement for the year ended and a summary of significant accounting
policies and other explanatory information.
Management' Responsibility for the Financial Statements
Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position,
financial performance and cash flow of the company in accordance with
Accounting Standard referred to in-sub section (3C) of section 211 of
the Companies Act, 1956('the Act') read with the General Circular
15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs
in respect of Section 133 of the Companies Act, 2013; General Circular
08/2014 dated 4"' April, 2013 of the Ministry of Corporate Affairs
the financial statement, auditor's report and board reports are
prepared and presented according to the relevant provisions / schedules
/ rules of the Companies Act 1956 and in accordance with the accounting
prindples generally accepted in India. This responsibility includes the
design, implementation and maintenance of internal control 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 conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountant of India. Those standards require that we comply with
ethical requirement and plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free from material
misstatements.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosure in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment
of the risk of material misstatement of the financial statements,
whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the Company's
preparation and fair presentation of the financial statement in order
to design audit procedures that are appropriate in the circumstances,
but not for the purpose of expressing opinion on the effectiveness of
the company's internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of
the accounting policies used and the reasonableness of the accounting
estimate made by management, 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.
Opinion
1) The accounts of the Company for the year have been prepared on a
'Going Concern' basis, as the Company has once again declared as a Sick
Company by The Board for Industrial and Financial Reconstruction (BIFR)
as per hearing held on 01 10-2013 vide their order dated 20 / 11 /
2013.The "PNB" has been appointed as the 'Operating Agency' [OA] by
the BIFR. According to information and explanation given to us the
company is in the process of preparing the draft rehabilitation scheme
which is to be submitted before the BIFR and OA
2) The outstanding balances of debtors, creditors, loans and advances
including inter corporate deposit (taken and given),balance with
statutory/fisca! liabilities (Assets & Liabilities) i.e. Excise &
Service tax deposits/balances subject to confirmations, reconciliation
and consequent adjustment, if any. (Refer Note No.37 )
3) There is certain unimplemented portion of sanction scheme (SS07) to
be implemented specifically recovery of special capital incentives and
interest thereon by Government of Maharashtra, extension of sales tax
deferral period for further eight years and past & future interest on
the sales tax deferral dues of the resulting company Machhar Industries
Ltd. while discharging the company as SICK Industrial company which was
declared as a SICK Company on 17.12.2002 by the Hon'ble BIFR vide its
order dated 16.06.2011 and accordingly, while preparing and presenting
the financial statements for the year under consideration the company
has followed the order of BIFR. (Refer Note No 34)
4) In our opinion subject to stated above and to the best of our
information and according to the explanations give to us, the aforesaid
financial statements give the information required the Act in the
manner so required and give a true and fair view in conformity with
accounting principles generally accepted in India:
a) In the case of Balance Sheet, of the state of affairs of the company
as at March 31, 2014;
b) In the case of the Statement of Profit and Loss, of the Loss for the
year ended on that date; and
c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1) As required by the Companies (Auditor's Report) Order, 2003('the
Order') as amended, issued by the Central Government of India in terms
of Section 227(4A) of the Companies Act, 1956, and on the basis of test
checks of the books and the records of the company and according to the
information and explanations given to us, we annexed hereto a statement
on the matters specified in paragraphs 4 and 5 of the said Order.
2) Further to our comments in the Annexure referred to above, we report
that:
a) Subject to what is stated at point no.2 in section 'Opinion', we
have obtained all the information and explanation which to the best of
our knowledge and belief were necessary for the purpose of our audit;
b) In our opinion, proper books of accounts as required by Law have
been kept by the company as so far as appears from our examination of
those books;
c) The Balance Sheet and Statement of Profit & Loss Account and Cash
Flow Statement dealt with by this report are in agreement with the
books of account;
d) In our opinion, Balance Sheet, the statement of Profit & Loss
Account and the Cash Flow Statement comply with Accounting Standards
notified under the Act read with the General Circular 15/2013 dated
13th September, 2013 of the Ministry of Corporate Affairs in respect of
Section 133 of the Companies Act, 2013; General Circular 08/2014 dated
4th April, 2013 of the Ministry of
Corporate Affairs the financial statement;
e) On the basis of the written representations received from the
Directors, taken on record by the Board of Directors, and according to
the information and explanations given to us, none of the directors is
disqualified as on 31st March 2014 from being appointed as a
Director under section 274(1) (g) of the Companies Act, 1956.
ANNEXURE TO THE INDEPENDENT AUDITORS* REPORT
Statement referred to in paragraph 4 & 5 of the Auditor' Report of even
date to the member of APT PACKAGING LIMITED ("the Company"1) on the
financial statements for the year ended 31st March, 2014.
1) a) The company has maintained proper records showing full
particulars including quantitative details and situation of fixed
assets.
b) Some of the fixed assets are physically verified during the year by
the management in accordance with a program of verification, which in
our opinion provides for physical verification of all the fixes assets
at reasonable intervals. According to the information and explanations
given to us, no material discrepancies were noticed on such
verification.
c) Fixed Assets are disposed off by the company during the year do not
form substantial part thereof.
2) a) As informed to us, the stock of finished goods, work-in-process
and raw materials at all the units of the Company have been physically
verified by the Management once in a year except for the goods lying
with the third parties. In our opinion it should be conducted at least
twice in a year.
b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of stock followed
by the management are reasonable and adequate in relation the size of
Company and the nature of its business.
c) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. The discrepancies noticed on physical verification of stocks
as compared to book records were not material and have been properly
dealt with in the books of account.
3) a) The Company has taken loans from two directors, one ex-director,
six shareholders, three relatives of the director, three promoters
Group Company and Resulting Company covered in the register maintained
under Section 301 of the Companies Act, 1956 to meet the short fall of
Sanctioned Scheme and as per banker's clause. The maximum amount
involved during the year is Rs. 1203.10 Lacs including Opening Balance
of Rs. 1084.13 Lacs and the yearend balance of loans taken from such
parties was Rs. 947.98 Lacs.
b) According to the information and explanation given to us, out of the
above, loan amount of Rs. 68.20 Lacs is Interest free and balance Rs.
879.78 Lacs is interest bearing. For interest bearing unsecured loans
the interest is provided. The terms and conditions of these toans are
not prejudicial to the interests of the company. The company is regular
in repaying the loan amount and interest whenever applicable and as
stipulated.
c) The company has not given loans to any firms covered in the register
maintained under section 301 of the companies Act, 1956.
4) In our opinion and according to the information and explanation
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchase of inventory, fixed assets and sale of
goods. During the course of our audit, we have not observed any
continuing failure to correct major weaknesses in the internal control
system.
5) a) According to the information and explanation given to us, we are
of the opinion that the transaction that needs to be entered in to the
register maintained u/s 301 of the Companies Act, 1956 have been so
entered.
b) in our opinion and according to the information and explanation
given to us, there are transactions exceeding Rs.5 Lacs each which have
been made at prices, which are reasonable having regard to the
prevailing market prices, for such goods materials or services at the
relevant time.
6) The Company has not accepted any deposits from the public within the
provisions of section 58A and 58AA of the Companies Act, 1956 and rules
framed there under.
7) A In our opinion, the company has an adequate Internal Audit system
commensurate with its size and the nature of its business.
8) We have broadly reviewed the books of account maintained by the
company pursuant to the Rules made by the Central Government for
the maintenance of cost records under section 209(1) (d) of the
Companies Act, 1956 and are of the opinion that prima facie,the
prescribed accounts have been made and maintained. '
9) a) According to the records of the company, the company is generally
regular in depositing with the appropriate authorities undisputed
statutory dues including P.F., customs, excise duty, income tax,- sales
tax, investors education and protection fund, Service Tax, Custom Duty
Cess and other material statutory dues applicable except Rs.4.68 lacs.
The statements of Arrears of Statutory dues outstanding for more than
six months are as follows:
TYPE OF TAXES AMOUNT IN LACS
Property Tax 3.92
Sales Tax 0.77
b) As at 31st March 2014 according to the records of the company, the
following are the particulars of disputed dues on Account on
Sales Tax have not been deposited:
Name of Statute Disputed Liability Rs. Forum where dispute
In Lacs is pending
Sales Tax Govt, of 4.75 Sales Tax Authority,
Maharashtra Aurangabad /
Haridwar.
Property Tax 1.35 Muncipal Corporation
Authority, Aurangabad.
Income Tax - Carried 0 00 Commissioner of Income
Forward (Being Loss Return) Tax Appeals, Aurangabad
Unabsorbed
Depreciation of Rs.
1354.42 Lacs.
10) The company has accumulated losses exceeding its net worth as on
March 31, 2014. The Company has not incurred any cash losses during the
financial year covered by our audit considering exceptional items
profit at Rs. 177.66 Lacs and there was a cash loss in the financial
year immediately preceding current financial year amounting to Rs.
196.36 Lacs.
11) Based on our audit procedures and on the information and
explanations given by the management, the company has delayed repayment
of loans to banks in respect of term loans. The following are the
details of the delays.
Particulars Amount in Lacs Period of Delays
Term loans upto Dec 172.18 Up to 120 days. Paid on
2013 (incl interest or vefore 31-03-2014
of Rs.53.65 Lacs)
Term loans upto Mar 117.30 Lacs 90 days 104.19 Lacs
2014 (Incl Interest Not paid till
of Rs.3997 Lacs 31-03-2014.
As at the year end, out of the above delays, term loan amounting to Rs.
172.18 Lacs have been rectified and hence no delays exist to that
extent, whereas Rs. 104.19 Lacs still unpaid accordingly delay exist as
at March 31, 2014.
12) According to the information and explanations given to us and
records of the company, the company has not granted any loans and
advances on the basis of securities by way of pledge of shares,
debentures and securities. According to the provisions of clause 4(xii)
of the Companies (Auditors Report) order, 2003 the same are not
applicable to the Company.
13) In our opinion, the company is not a Chit Fund or a Nidhi / Mutual
benefit fund/Society. Accordingly, the provisions of clause 4 (xiii) of
the Companies (Auditors Report) order, 2003 are not applicable to the
Company.
14) In our opinion, the company is not dealing in or trading in shares,
securities, debentures and other instruments. Accordingly, the
provisions of clause 4(xiv) of the Companies (Auditors Report) order,
2003 are not applicable to the Company.
15) In accordance with the sanctioned scheme of Demerger and the order
of Honorable BIFR, for resulting company, the company has given
Guarantees to banks and other creditors for their respective
outstanding balances as on cut off date i.e. 01.04.2007 incase if the
resulting company fails to pay or shortfall to pay the same. As this is
stipulated as per the Sanctioned Scheme ordered by the BIFR, the same
is not treated as prejudicial to the interest of the company. According
to information and explanations given to us by the managment there is
outstanding balance of Rs. 399.36 lacs as on 31.03.2014 on account of
Sales tax deferral.
16) According to the records of the Company, information and
explanation given to us, the company has obtained term loans during the
year under audit and the same were applied for the purpose for which
they are raised except Rs.12.16 Lacs kept in cash credit account with
lien mark at Punjab National Bank.
17) According to the information and explanations given to us and on
overall examination of the balance sheet of the company, we are of the
opinion that the Company has used funds to the extent of Rs. 33.77 Lacs
raised on short-term basis has been utilized for the repayment of
long-term loan (Term Loan) except permanent working capital.
18) During the year, the company has not made any allotment of shares,
hence the provisions of clause 4(xviii) of the Companies (Auditors
Report) order, 2003 are not applicable to the company.
19) According to the records of the Company, the company has not issued
any debentures as per the provisions under clause 4(xix) of the
Companies (Auditors Report) order, 2003.
20) The company has not raised any money by Public-issues during the
period covered by our Audit report as per the provisions under clause
4(xx) of the Companies (Auditors Report) order, 2003.
21) During the course of our examination of the books records of the
company, carried out in accordance with the generally accepted auditing
practices in India, and according to the information and explanations
given to us, we have neither come across any instances of material
fraud on or by the Company, noticed or reported during the year, nor
have been informed of such case by the management.
For Rathi & Bangad
Chartered Accountants
[Firm Reg. No. 108702W]
Date: 30/05/2014 Dilip D.Jain
Place: Aurangabad Proprietor
M. No. 044301 |