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Aftek Ltd.

BSE: 530707 Sector: IT
NSE: AFTEK ISIN Code: INE796A01023
BSE 00:00 | 04 Mar Aftek Ltd
NSE 05:30 | 01 Jan Aftek Ltd
OPEN 5.65
PREVIOUS CLOSE 5.75
VOLUME 83645
52-Week high 5.85
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 63
Buy Price 5.75
Buy Qty 1000.00
Sell Price 0.00
Sell Qty 0.00
OPEN 5.65
CLOSE 5.75
VOLUME 83645
52-Week high 5.85
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 63
Buy Price 5.75
Buy Qty 1000.00
Sell Price 0.00
Sell Qty 0.00

Aftek Ltd. (AFTEK) - Auditors Report

Company auditors report

To the Members of

AFTEK Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of AFTEK Limited("the Company") which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss and the Cash Flow Statement for the year then ended and asummary 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 Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Companies Act 2013 read with Rule 7 of theCompanies(Accounts) Rules 2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial control that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

Auditor's Responsibility

Ourresponsibility is to express an opinion on these standalone financial statementsbased on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovision of the Act and the Rules made thereunder.

Weconducted ouraudit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that wecomply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to theCompany's preparation of the financialstatements that give a true and fair view in order to design auditprocedures that areappropriate in the circumstances.An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made by theCompany Directors as well as evaluating the overall presentation of the financialstatements.

Webelieve that the audit evidence wehave obtained is sufficient and appropriate toprovide a basis for ouraudit opinion on financial statements.

Basis for qualified opinion

1. Note no.39 regarding Management has not considered any provision inrespect of outstanding Debtors for a period more than 12 months amounting to `30704.17 Lacs which in our opinion as evidenced by the poor recovery made during theyear are doubtful of recovery. Consequently profit before tax is overstated by `30704.17 Lacs; Further in our view there is significant uncertainty as to ultimatecollection of Debtors due to non-receipt from overseas debtors. Therefore we are furtherunable to comment on recoverability of balance debtors amounting to ` 926.34 Lacs;

2. Note no.40 regarding company has given certain capital advances andmade some investments totalling to ` 6975.20 Lacs towards the building underconstruction at Hinjewadi Pune upto the year ended 31-3-2010 thereafter there are nofurther developments/construction made. The said Plot of land is mortgaged to Bank ofIndia -Jersey Channel Islands against the term loan. However since the Company has madedefault in repayment of Principal and Interest thereon Bank has demanded repayment totalloan and taken the possession of the land alongwith the construction in progress. The bankhas called for bids at a base price of ` 1800.00 Lacs. There is no provision madetowards the eventual loss on such auction which is presently not ascertainable till suchdisposal.

3. Note no.42 regarding Company had purchased Intangible Assets underdevelopment for various ongoing projects. Due to the delay in the projects IntangibleAssets under development for ` 10325.97 Lacs are yet to be put to use as on thedate of balance sheet. The company is of the opinions that with the improved marketconditions all the Assets under development will be profitably used by the company in thefuture projects which in our opinion as evidenced by the delay in the use of the sameare doubtful of commercial usage. Consequently profit before tax is overstated by

` 10325.97 Lacs.

Qualified Opinion

In ouropinion and to the best of our information and according to the explanationsgiven to usexcept for the effects of the matters described in the Basis for qualifiedopinion paragraph the aforesaid standalone financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet of the state of affairs of the Company as atMarch 31 2017; (b) in the case of the Statement of Profit and Loss of the loss fortheyear ended on that date;and (c) in the case of the Cash Flow Statement of the cashflows for the year ended on that date.

Emphasis of matter

1. Note no.34 b (ii) regarding Liability if any of the pending assessmentunder Income tax Sales tax unpaid PF dues (including interest if any) which arepresently not ascertainable.

Report on Other Legal and Regulatory Requirements.

1. As required by the Companies ( Auditor's Report ) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure "A" statement on the mattersspecified in the paragraph 3 and 4 of the Order to the extent applicable.

2. As required by section 143(3) of the Act wereport that:

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purpose of ouraudit;

b. In our opinion proper books of account as required by law have been kept by theCompany so far as 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. Except for the effects of the matter described in the Basis for Qualified Opinionparagraph in our opinion and with regard to the non-availability of the Actuarialvaluation of the Gratuity Liability the aforesaid standalone financial statementscomply with the Accounting Standards specified under Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014;

e. On the basis of written representations received from the Directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164 (2) oftheAct.

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and

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 in our opinionand to the best of our information and according to the explanation given to us:

i. The company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements-refer Note 34 (b)(ii) of financialstatements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses as at March 31 2017.

iii. There has been significant delay in transferring amounts of ` 20.24Lacs which were required to be transferred to the Investor Education and Protection Fundby the Company.

iv. The Company had provided requisite disclosure in its financial statement (ReferNote 36) as to holding as well as dealing in Specified Banks Notes during the period from8th November 2016 to 30th December 2016 and is in agreement with the relevant books ofaccounts maintained by the company.

For GMJ & Co.
Chartered Accountants
Firm Registration Number: 103429W
Haridas Bhat
Partner
Membership Number: 039070
Mumbai
May 30 2017

Annexure A to the Independent Auditor's Report

(Referred to in Paragraph 1 under the heading of "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 situation of fixed assets.

b. According to the information and explanations given to us the Fixed Assets havebeen physically verified by the management during the yearno material discrepancies werenoticed on such verification with book records. In our opinion this periodicity ofphysical verification is reasonable having regard to the size of the Company and nature ofits assets.

c. According to the information and explanations given to us and the records examinedby us the company does not owned immovable properties. In respect of immovable propertiestaken on lease and disclose as fixed asset as leasehold land and building in the financialstatements the lease agreements are in the name of company.

ii. The management has conducted physical verification of inventory at reasonableintervals during the year. In our opinion and according to the information andexplanations given to us the Company is maintaining proper records of inventory.

No material discrepancies have been noticed on physical verification between physicalstock and book records.

iii. In respect of loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered under register maintained under section 189 of theCompanies Act 2013;

a. In our opinion the terms and conditions on which the loans have been granted arenot prima facie prejudicial to the interest of the company;

b. The terms of arrangements do not stipulate any repayment schedule and the loans arerepayable on demand.

Accordingly this paragraph is not applicable to the Company in respect of repayment ofthe principal amount.

c. There are no overdue amountsin respect of loans granted to the parties covered underregister maintained under section 189 of the Companies Act 2013.

iv. In our opinion and according to the information and explanations given to us andbased on our examination of the records the Company has complied with the provisions ofsection 185 and 186 of the Companies Act 2013 in respect of loans investmentsguarantees and security given if any.

v. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 of the Act andother relevant provisions with regard to the deposits accepted from the public are notapplicable.

vi. Pursuant to Section 148 of the Companies Act 2013 the Central Government made TheCompanies (Cost Records and Audit) Rules 2014 not applicable to the company because thethreshold applicable limit mentioned in rule 3 is not fulfilled during the previous year.

vii. a. According to the information and explanations given to us the company is notregular in depositing undisputed statutory dues Employees State Insurance Sales-taxWealth Tax Service Tax Custom Duty Excise Duty Cess and any other statutory dues withthe appropriate authorities. Undisputed provident fund dues are not regularly depositedwith the appropriate authorities. In respect of income tax the Company is not regular indepositing those dues with the appropriate authorities and there have been significantdelays in a large number of cases. Undisputed amounts payable in respect of abovementioned taxes which were outstanding at the year-end for a period of more than sixmonths from the date they became payable are as follows

Name Of

Nature of Dues

Amount

Period to which Amount relates

Date of

The Statute (` in Lacs)

Payment

Income tax Act1961

Deduction of Tax At Source

180.20

April 2010 to September2016

Not Paid

Employees Provident Fund

Provident Fund Contribution

86.81

April 2010 to september2016

Not Paid

and Miscellaneous
Provisions Act 1952
Maharashtra State Tax on

Profession Tax

6.54

September 2010 to september2016

Not Paid

Professions Trades
Callings and Employments
Act 1952
Maharashtra Value Added

Sales Tax

3.27

March2011 to september2016

Not Paid

Tax Act 2002
Central Sales Tax Act 1956

Central Sales Tax

27.65

September2010 to september2016

Not Paid

b. According to the information and explanations given to us following dues have notbeen deposited with the concerned authorities on account of dispute as at 31st March2017: :

Name of

Nature of the Dues

Amount

Period to which Amount relates

Date of

the Statute (` in Lacs)

Payment

Income Tax Act 1961

Tax on Regular

30.52

2008-09

Not Paid

Assessments U/s143(3)

8.78 2009-10 Not Paid
128.00 2010-11 Not Paid
1263.06 2011-12 Not Paid

Forum where dispute is pending for the year 2011-2012 : Commissioner of Income-tax(appeal).

viii. In According to the information and explanations given to us the company hasdefaulted in repayment of dues to banks

Sr.No

Name of the Bank

Type of Loan

Period to which

Defaulted

Defaulted

Amount relates

Principal

Interest

(` in Lacs )

(` in Lacs )

I Bank of India - Term Loan April 2011 to March 2017 3116.14 552.65
Jersey Channel Islands
II State Bank of Term Loan April 2011 to March 2017 4000.00 3209.00
Bikaner & Jaipur
III State Bank of Cash Credit A/c April 2011 to March 2017 1479.28 864.41
Bikaner & Jaipur

The Company does not have any loans or borrowings from financial institutions orgovernment and has not issued any debentures.

ix. In our opinion and according to the information and explanations given to us themonies raised by way of term loans were applied for the purposes for which they wereraised. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year.

x. According to the information and explanations given to us no material fraud by thecompany or on the Company by its officer or employees has been noticed or reported duringthe course of our audit.

xi. According to the information and explanation give to us and based on ourexamination of the records the Company has not paid/provided for managerial remuneration.Therefore paragraph 3 (xi) of the Order is not applicable.

xii. In our opinion and according to the information given to us the Company is not aNidhi Company. Therefore paragraph 3(xii) of the Order is not applicable.

xiii. According to the information and explanation give to us and based on ourexamination of the records of the Company the transactions with related parties are incompliance of section 177 and 188 of the Companies Act 2013 wherever applicable and thedetails have been disclosed in the Financial Statements as required by the applicableaccounting standards.

xiv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe company.

xv. The company has not entered into any non-cash transactions with the directors orpersons connected with him. Therefore paragraph 3(xv) of the Order is not applicable.

xvi. The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For GMJ & Co.
Chartered Accountants
Firm Registration Number: 103429W
Haridas Bhat
Partner
Membership Number: 039070
Mumbai
May 30 2017

Annexure – B to the Auditor's Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of AFTEKLimited ("the Company") as of March 31 2017 in conjunction with our audit ofthe standalone 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 internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit toobtain reasonable assurance about whether adequate internal financial controlsover financial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness.Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgments including the assessment of the risks ofmaterial 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 Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany'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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree 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 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For GMJ& Co.
Chartered Accountants
Firm Registration Number: 103429W
Haridas Bhat
Mumbai Partner
May 30 2017 Membership Number: 039070