TO THE MEMBERS OF APCOTEX INDUSTRIES LIMITED.
Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of APCOTEX INDUSTRIESLIMITED (the Company) which comprises the Balance Sheet as at March 31 2016the Statement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
Managements Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters in Section 134(5) ofthe Companies Act 2013 (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 specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provision of the Act for safeguarding the assets of the Company and for preventing anddetecting 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 financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
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 theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply 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 andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2016 and its profit and its 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 2016 (the Order)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure A a statement on the matters specified inthe paragraph 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act we report 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 March31 2016 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2016 from being appointed as a director in terms of Section164 (2) of the Act.
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 explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 27 to the standalone financialstatements.
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on longterm contract includingderivative contracts.
iii. There are no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
For KALYANIWALLA & MISTRY
Firm Reg.No. 104607W
Ermin K. Irani
M. No.: 35646
Dated: May 16 2016
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT
Referred to in Para 1 'Report on Other Legal and Regulatory Requirements' in ourIndependent Auditors' Report to the members of the Company on the standalone financialstatements For the year ended March 312016.
Statement on Matters specified in paragraphs 3 & 4 of the Companies (Auditor'sReport) Order 2016:
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) As explained to us the Company has a programme for physical verification of fixedassets at periodic intervals. In our opinion the period of verification is reasonablehaving regard to the size of the company and nature of its assets. The discrepanciesreported on such verification were not material and have been properly dealt with in thebooks of account.
(c) According to the information and explanations given to us and on the basis ofexamination of the records of the company the title deeds of immovable properties areheld in the name of the Company.
ii. In our opinion and according to the information and explanations given to usphysical verification of inventory has been conducted at reasonable intervals by themanagement and no material discrepancies were noticed on physical verification and thesame have been properly dealt with in the books of account.
iii. The Company had granted an unsecured loan to a wholly owned subsidiary companycovered in the register maintained under section 189 of the Act. The Company has notgranted any loan to firm Limited Liability partnerships or other parties covered in theregister maintained under section 189 of the Act.
a. the terms and conditions of the loan granted are not prejudicial to the Company'sinterest.
b. the said loan was repayable on demand and has been repaid before the end of thefinancial year. However interest amount is outstanding at the end of the financial year.
c. there is no overdue amount in respect of the loan granted. Hence the question ofcommenting on reasonable steps taken by the Company for recovery of principle and interestdoes not arise.
iv. In our opinion and according to the information and explanations given to us theCompany has not advanced any loans or made any investments or provided any guarantees orsecurity to the parties covered under section 185 of the Act. The Company has given loansmade investments in the securities of other body corporate and given guarantee within thelimit specified by section 186 of the Act and details of such transactions have beendisclosed in the standalone financial statements.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted any Deposits from the public and hence the directives issued bythe Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the Rules framed thereunder are not applicable.
vi. In our opinion and according to information and explanations given us themaintenance of cost records under sub section (1) of Section 148 of the Act is notapplicable to the Company under the Company (Cost Record and Audit) Rules 2014.
vii. (a) According to the information and explanations given to us and the recordsexamined by us the Company is generally regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Sales Tax Service TaxDuty of Customs Duty of Excise Value Added Tax Cess and other material statutory dueswith the appropriate authorities. According to the information and explanations given tous there are no arrears of outstanding statutory dues in respect of above as on the lastday of the financial year for a period of more than six months from the date they becamepayable.
(b) According to the information and explanation given to us and the records examinedby us there are no material dues of Income Tax Sales Tax Service Tax Duty of CustomsDuty of Excise and Value added tax outstanding on account of any dispute except:
| || || || || ||(' in Lac) |
|Sr. No. ||Name of the Statute ||Nature of Dues ||Amount ||Period to which the amount relates ||Forum where dispute is pending |
|1 ||Income Tax Act 1961 ||Tax ||3.75 ||2002-03 ||Commissioner of Income Tax (appeals) |
|2 ||Income Tax Act 1961 ||Tax ||8.00 ||2007-08 ||Income Tax appellate tribunal (ITAT) |
|3 ||Income Tax Act 1961 ||Tax ||28.00 ||2010-11 ||Income Tax appellate tribunal (ITAT) |
|4 ||Income Tax Act 1961 ||Tax ||136.13 ||2011-12 ||Commissioner of Income Tax (appeals) |
|5 ||Income Tax Act 1961 ||Tax ||94.24 ||2012-13 ||Commissioner of Income Tax (appeals) |
|6 ||Customs Act ||Customs Duty ||142.09 ||August 2000 to July 2004 ||Supreme Court |
|7 ||Central Excise Act & Service Tax ||Service Tax ||0.13 ||2007-08 ||Tribunal |
|8 ||Central Excise Act & Service Tax ||Excise Duty ||1.59 ||2009-10 to 2011-12 ||Dy. Comm |
|9 ||Central Excise Act & Service Tax ||Service Tax ||16.12 ||2005-06 to 2009-10 ||Assistant Commissioner - Service tax |
|10 ||MVAT ||VAT ||1.70 ||2006-07 ||Bombay High Court |
|11 ||MVAT ||VAT ||63.22 ||2007 to 2011 ||Joint Commissioner of Sale Tax |
viii. According to information and explanation given to us and based on examination ofthe records the Company has not defaulted in repayment of loans or borrowings to bank.The Company does not have any dues to financial institution government or debentureholders.
xi. The Company has not raised money through initial public offer or further publicoffer (including debt instruments). In our opinion and according to the information andexplanations given to us and based on the documents and records examined by us on anoverall basis the term loans obtained by the Company were applied for the purpose forwhich the loans were obtained.
x. During the course of our examination of the books of account and records of theCompany and according to the information and explanation given to us and representationsmade by the Management no material fraud by or on the Company by its officers oremployees has been noticed or reported during the year.
xi. According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with requisite approvals mandated by the provisions of section197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanation given to us theCompany is not a Nidhi Company. Accordingly provisions of paragraph 3(xii) of the Orderare not applicable.
xiii. According to the information and explanation given to us and based on ourexamination of the records of the Company transactions with related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
xiv. According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
xv. According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with the directors or persons connected with him. Hence the provisions ofSection 192 of the Act are not applicable.
xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934 hence the provisions of paragraph 3 (xvi) of the Order are notapplicable.
FOR KALYANIWALLA & MISTRY
Firm Reg. No. 104607W
Name: Ermin K. Irani
M. No. 35646
Date: May 16 2016
ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT
Referred to in Para 2 (f) 'Report on Other Legal and Regulatory Requirements inour Independent Auditors Report to the members of the Company on the standalonefinancial statements For the year ended March 31 2016.
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 (the Act)
We have audited the internal financial controls over financial reporting of APCOTEXINDUSTRIES LIMITED (the Company) as of March 31 2016 in conjunction withour audit of the financial statements of the Company Forthe year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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 Reporting (theGuidance Note) issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to companyspolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) oftheAct to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditors judgment including the assessment of the risks of materialmisstatement 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 Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures 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 thecompanys 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.
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 2016 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 KALYANIWALLA & MISTRY CHARTERED ACCOUNTANTS Firm Reg. No. 104607W
Ermin K. Irani PARTNER M. No. 35646
Place: Mumbai Date: May 16 2016