| We have audited the accompanying standalone financial statements of
Aplab Limited ("the Company"), which comprise the Balance Sheet as at
March 31, 2015, and the Statement of Profit and Loss and Cash Flow
Statement for the year then ended, and a summary of significant
accounting policies and other explanatory information.
Management's Responsibility for the Standalone 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 standalone 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
referred 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 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.
Auditor's 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 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 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, but not for
the purpose of expressing an opinion on whether the Company has in
place an adequate internal financial control system over financial
reporting and the operating effectiveness of such controls. An audit
also includes evaluating the appropriateness of 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.
Opinion
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid 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, 2015, and its Loss and its Cash flows for the year ended
on that date.
Emphasis of Matters
a. The Company has incurred substantial cash loss during this year.
The Company has accumulated losses and its net worth has been
substantially eroded. During the year, Company could not repay some of
the borrowings or honor LCs on its due dates. The overall debt burden
has gone up during the year. These events indicate uncertainty that may
cast doubt on the Company's ability to continue as a going concern
considering operational inflows. Company has plans to sell some of its
assets to reduce debt burden and improve its financial position.
b. The Inventory includes Rs. 1216 lacs which is non-moving over 3
years and may include some obsolescence. The Company claims that there
is no obsolescence in electronics industry and therefore valued
inventory at Cost.
c. The Receivables of Rs. 341 lacs which are overdue over one year
need to be reconciled and confirmed. Some of these may have become
doubtful or bad, however, the Company has not made adequate provision
in the financial statements.
d. The Company has not tested & computed Impairment of Assets as per
AS 28 considering substantial cash loss during the year.
Other Matters
a. The Company has unfunded Gratuity Policy of Rs. 1074 lacs on the
Balance Sheet date.
b. The Company also has unpaid liability of Matured Public deposits of
Rs. 23 lacs and Settlements of separated employees of Rs. 241 lacs.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Companies Act, we give in the
Annexure a statement on the matters specified in paragraphs of the
Order and as required by section 143 (3) of the Act, we report that:
a. We have obtained all the information and explanations 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 appears from our examination of those
books.
c. The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement dealt with by this Report is in agreement with the books of
account.
d. The Balance Sheet, Statement of Profit and Loss and Cash Flow
Statement comply with the Accounting Standards specified under section
133 of the Act, read with Rule 7 of the Companies (Accounts) Rules,
2013;
e. On the basis of written representations received from the directors
as on March 31, 2015, and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015, from being
appointed as a director in terms of section 164 (2) of the Act.
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 Company has not provided the impact of pending litigations in
its financial statements. The total value of such litigations has been
given in para vii(b) of the Annexure to this report ;
ii) The Company did not have any long-term contracts including
derivative contracts in which there were any material foreseeable
losses
iii) There has been a delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
(Annexure referred to in paragraph under 'Report on Other Legal and
Regulatory Requirements' section of our report of even date on the
accounts of Aplab Limited for the year ended on 31st March 2015.)
i. (a) The Company has maintained reasonable records showing
particulars including quantitative details and situation of fixed
assets.
(b) Physical verification of items of the fixed assets was
conducted by the management during the year as per the programme and we
are informed that no material discrepancies were noticed in such
verification. The verification results are being reconciled with Fixed
Assets Register by the Company.
ii. (a) As explained to us, the inventory has been physically verified
during the year by the management at the various locations. In our
opinion, the frequency of such verification needs to be improved at
regional offices.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate at all
manufacturing locations in relation to the size of the Company and the
nature of its business. However, such procedures require improvement
for Inventory at Regions and Branch offices.
(c) In our opinion and according to the information and explanations
given to us and on the basis of our examination of the records of
inventory, the Company is maintaining proper records of inventory at
all manufacturing locations. However, there is need to improve &
strengthen inventory recordkeeping at all regions and branches. As
informed to us, the discrepancies noticed in physical verification of
inventory as compared to the book records were not material and have
been properly dealt with in the books of account.
iii. According to the information and explanations given to us, the
Company has not granted any loan to the parties listed in the Register
maintained under Section 189 of the Companies Act, 2013. Consequently,
the requirements of Clause (a) and (b) are not applicable.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and nature of its business
with regard to the purchase of inventory and fixed assets, and with
regard to the sale of goods. However, improvement is required in
internal control procedures in the areas of Inventory & Service Income
at the regional offices. On the basis of our examination and according
to the information and explanations given to us, we have neither come
across nor have been informed of any instance of major weakness in
other areas of internal control procedures except the above.
v. In our opinion and according to the information and explanations
given to us, the Company has not fully complied with the directives
issued by the Reserve Bank of India, the provisions of Section 73 to 76
of the Companies Act, 2013 and the rules framed there under with regard
to the deposits accepted from the public. Company has not repaid on due
dates matured Public deposits worth Rs. 23 lacs, which are outstanding
on report date, as these were not claimed.
vi. We have broadly reviewed the cost records maintained by the
Company pursuant to the Companies (Cost Accounting Records) Rules, 2011
prescribed by the Central government u/s 148 (1) of the Companies Act,
2013 and are of the opinion that prima facie the prescribed cost
records have been maintained. We have, however not made a detailed
examination of the Cost records with a view to determine whether they
are accurate or complete.
vii. (a) According to the records of the Company and information and
explanations given to us, the Company has been generally regular in
depositing undisputed statutory dues including Provident Fund,
Employees State Insurance, Income tax, Wealth tax, Service Tax, Customs
Duty, Excise Duty, Value Added Tax, Cess and other statutory dues with
the appropriate authorities during the year, though there is a delay in
few cases. There are no undisputed statutory dues outstanding as of
March 31, 2015 for a period of more than six months since they became
payable. The Company has not transferred amount of Rs. 1.59 lacs to
Investor Education and Protection Fund as on balance sheet date.
(b) As at the year-end, according to the records of the Company and
information and explanations given to us, the following are particulars
of disputed dues on account of various Statutory Dues :-
Statute Amount F.Y. Forum where dispute is pending
(Rs. in
Lacs)
Excise Duty 10.76 1999-00 Appeal Pending With CESTAT
Excise Duty 5.35 2007-08 Appeal Pending With CESTAT
Excise Duty 1.50 2008-09 Appeal Pending With CESTAT
Excise Duty 1.81 2009-10 Appeal Pending With CESTAT
Excise Duty 6.60 2012-13 Appeal Pending with Commissioner of
Central Excise (Appeals) CBD Belapur
Excise Duty 3.53 2013-14 Appeal Pending with Asst.
Commissioner of Central Excise
(Appeals)
Excise Duty 3.81 2014-15 Appeal Pending With CESTAT
Sales Tax 6.11 2002-03 Dy. Commissioner Appeals, New Delhi.
Sales Tax 2.10 2003-04 Dy. Commissioner Appeals, New Delhi.
Sales Tax 2.18 2004-05 Joint Commissioner Appeals,
New Delhi.
Sales Tax 3.48 2004-05 Joint Commissioner Appeals,
New Delhi.
Sales Tax 0.83 2005-06 Additional Commissioner Grade II,
Appeal III, Commercial Taxes
(Lucknow)
Sales Tax 1.70 2006-07 Additional Commissioner Grade II,
Appeal III, Commercial Taxes
(Lucknow)
Sales Tax 1.09 2007-08 Additional Commissioner Grade II,
Appeal III, Commercial Taxes
(Lucknow)
Income Tax 7.28 2004-05 Additional Commissioner Grade II,
Appeal filed with Tribunal Mumbai
Income Tax 125.40 2009-10 Additional Commissioner Circle 1,
Thane
Income Tax 682.31 2010-11 Commissioner of IT Range 1
Income Tax 124.02 2011-12 CIT II Thane
Total 989.86
viii. The Company has accumulated losses at the end of the year which
is more than fifty percent of its net worth. The Company has incurred a
Cash Loss during the current financial year; however, the company has
not incurred a Cash Loss in the immediately preceding financial year.
ix. Based on our audit procedures and on the basis of information and
explanations given by the management, there are cases of delay in
Repayment of Principal amount of Term Loans and such overdue amount is
Rs. 142 lacs as on 31st March, 2015 for two term loans for a period of
one month.
x. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by its subsidiary
from a bank.
xi. To the best of our knowledge and belief and according to the
information and explanations given to us, term loans availed by the
Company were, prima facie, applied by the Company for the purposes for
which the loans were obtained. However, complete utilization of Term
Loan availed could not be fully ascertained.
xii. Based on information and the explanations furnished by the
management, which have been relied upon by us, there were no frauds on
or by the company noticed or reported during the year, save for one
instance of Rs. 8.20 lacs, a forged cheque withdrawal.
For Shahade & Associates
Chartered Accountants
(ICAI Firm Reg. No. 109840W)
Atul Shahade
Place : Mumbai, Partner
Date : 23rd May, 2015 M. No. 35227 |