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Aplab Ltd.

BSE: 517096 Sector: Engineering
NSE: APLAB ISIN Code: INE273A01015
BSE LIVE 13:49 | 27 Jul 24.90 1.00
(4.18%)
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NSE 00:00 | 29 Jan Stock Is Not Traded.
OPEN 24.90
PREVIOUS CLOSE 23.90
VOLUME 753
52-Week high 30.85
52-Week low 19.60
P/E
Mkt Cap.(Rs cr) 12
Buy Price 22.75
Buy Qty 6.00
Sell Price 24.90
Sell Qty 248.00
OPEN 24.90
CLOSE 23.90
VOLUME 753
52-Week high 30.85
52-Week low 19.60
P/E
Mkt Cap.(Rs cr) 12
Buy Price 22.75
Buy Qty 6.00
Sell Price 24.90
Sell Qty 248.00

Aplab Ltd. (APLAB) - Auditors Report

Company auditors report

To the Members of Aplab Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Aplab Limited("the Company") which comprise the Balance Sheet as at March 31 2016 and theStatement of Profit and Loss and 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 Standardsreferred specified under section 133 of the Act read with Rule 7 of the Companies(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 controls 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

Our responsibility is to express an opinion on these financial statements based 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 theprovisions of the Act and the Rules made there under.

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 anddisclosures in the financial statements. The procedures selected depend on theauditor’s judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal 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 but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial control systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of accounting policies used and the reasonablenessof the accounting estimates made by the Company’s Directors as well as evaluatingthe overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion.

Basis of Qualified Opinion a. The Company has incurred substantial loss of Rs 1758lacs during this year. The Company has accumulated losses and its net worth has becomenegative during this year. The Company could not repay any installment of the Term Loansor repay Public Deposits or honor LCs on its due dates. The Bank has taken possession ofone of the Company properties due to this default of Rs. 1187 lacs and initiated recoveryaction. b. Due to nonpayment of debts and further borrowings and defaults the overallinterest bearing debts of the Company have gone up during the year. c. The Company duringthe year could not pay various statutory dues in time and the delay ranges between 3 to 5months. The total amount of unpaid Statutory Dues including Unpaid Gratuity is Rs. 766lacs at the year end.

These events indicate uncertainty that casts doubt on the Company’s ability tocontinue as a going concern considering continued losses and operational inflows.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us and subject to the qualification given above the aforesaid financialstatements give the information required by the Act in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia (a) In the case of the Balance Sheet of the state of affairs of the Company as at31st March 2016; (b) In the case of the Statement of Profit and Loss of theLoss for the year ended on that date; and (c) In the case of the Cash Flow Statement ofthe cash flows for the year ended on that date.

Emphasis of Matter

a. The Inventory includes Rs.2150 lacs which is non-moving over 3 years and may includesome obsolescence. There are un- reconciled and unconfirmed stocks worth Rs. 1652 lacs. Nothird party stock verification has been carried out at Branches. The Company has valuedentire old inventory at cost instead at Cost or NRV. The Company claims that there is noobsolescence in electronics industry and therefore valued inventory at Cost.

b. The Receivables of Rs. 492 lacs are overdue over one year and include Rs. 241 lacsover 3 years. These are not reconciled or confirmed by the parties. Some of these musthave become doubtful or bad however the Company has not made any provision in thefinancial statements.

c. Company has not paid Statutory dues in the past 3 to 5 months to various Tax andGovernment authorities amounting to Rs. 256 lacs.

d. In spite of cash losses Impairment of Assets has not been worked out or provided asrequired under AS 28.

Other Matters

a. The Company has unfunded Gratuity Policy of Rs. 1055 lacs and unpaid Gratuity ofseparated employees of Rs. 511 lacs on the Balance Sheet date.

b. The new ERP System introduced during the year is not yet fully established or testedfor various reports and day books.

c. The Company has not been able to work out line wise details of most of the CurrentAssets and Current Liabilities.

d. We have reviewed Internal Control over Financial Reporting and identified materialweaknesses in certain areas which are given in Annexure B to this report.

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 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 obtained all the information and explanations which to the best of ourknowledge 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 theCompany so far as appears from our examination of those books;

c. The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report is in agreement with the books of account;

d. The Balance Sheet Statement of Profit and Loss and Cash Flow Statement comply withthe Accounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

e. On the basis of written representations received from the directors as on March 312016 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2016 from being appointed as a director in terms of section 164 (2) ofthe Act. The Board has provided us with a copy of Board Note in this matter and CompanySecretary Compliance Certificate to this effect and we have relied upon the same;

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 not provided the impact of pending litigations in its financialstatements. The total value of such litigations has been given in para vii(b) of theAnnexure to this report ;

ii) The Company did not have any long-term contracts including derivative contracts inwhich there were any material foreseeable losses;

iii) There has been a delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Company.

For Shahade & Associates
Chartered Accountants
( ICAI Firm Reg. No. 109840W )
Atul Shahade
Place: Mumbai Partner
Date: 27th May 2016 M. No. 35227

ANNEXURE - A

ANNEXURE TO THE INDEPENDENT AUDITORS’ REPORT

( Annexure referred to in paragraph under ‘Report on Other Legal and RegulatoryRequirements’ section of our report of even date on the accounts of Aplab Limited forthe year ended on 31st March 2016. )

i. (a) The Company has maintained reasonable records showing particulars includingquantitative details and situation of fixed assets. However this record is not fullyupdated or reconciled with Books of Account.

(b) Physical verification of items of the fixed assets was not fully conducted by themanagement during the year as per the programme however we are informed that no materialdiscrepancies were noticed in such verification. The verification results are beingreconciled with Fixed Assets Register by the Company.

(c) The Company has immovable properties of freehold or leasehold land and buildingsand the original title deeds are given to the Banks as security against various loansobtained. The Company has copies of these title deeds and on examination of these copiesand other documents we observed that all the title deeds of the properties are held inthe name of the Company.

ii. As explained to us the inventory has been physically verified during the year bythe management at the various locations. In our opinion the frequency of suchverification needs to be substantially improved at regional offices. As informed to usthe discrepancies noticed in physical verification of inventory as compared to the bookrecords 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 notgranted any loans to the parties listed in the Register maintained under Section 189 ofthe Companies Act 2013. Consequently the requirements of Clause (a) to (c) are notapplicable.

iv. The Company has not granted any loans made investments or provided guarantees andhence reporting under clause 3 ( iv ) of the Order is not applicable.

v. In our opinion and according to the information and explanations given to us theCompany has not fully complied with the directives issued by the Reserve Bank of Indiathe provisions of Section 73 to 76 of the Companies Act 2013 and the rules framed thereunder with regard to the deposits accepted from the public.

Company has not repaid on due dates matured Public deposits of Rs. 185.58 Lacs andinterest Rs. 13.27 lacs as on 31st March 2016. The Company has also notmaintained liquid assets against deposits during the year as per the rules.

vi. We have broadly reviewed the cost records maintained by the Company pursuant to theCompanies ( Cost Accounting Records ) Rules 2011 prescribed by the Central government u/s148 (1) of the Companies Act 2013 and are of the opinion that prima facie the prescribedcost records have been maintained. We have however not made a detailed examination of theCost 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 givento us the Company has not been regular in depositing statutory dues including ProvidentFund Employees State Insurance Income tax Service Tax Customs Duty Excise Duty ValueAdded Tax LBT Cess and other statutory dues with the appropriate authorities during theyear as there are cases of delay throughout the year. Total outstanding of all thesestatutory dues is Rs. 256 lacs. There are no undisputed statutory dues outstanding as ofMarch 31 2016 for a period of more than six months since they became payable. The Companyhas not transferred amount of Rs. 1.19 lacs to Investor Education and Protection Fund ason Balance Sheet date.

(b) As at the year-end according to the records of the Company and information andexplanations given to us the following are particulars of disputed amounts on account ofvarious Statutory Dues :-

Nature of Dues Amount (Rs. in Lacs) F.Y. Forum where dispute is pending
Excise Duty 10.76 1999-00 Appeal Pending With CESTAT
Excise Duty 5.36 2007-08 Appeal Pending With CESTAT
Excise Duty 1.50 2008-09 Appeal Pending With CESTAT
Excise Duty 4.47 2011-12 Appeal Pending With CESTAT
Excise Duty 6.60 2012-13 Appeal Pending with Commissioner of Central Excise (Appeals) CBD Belapur
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 985.19

viii. The Company had taken Term loans & Working Capital Loans from banks but hasnot issued any debentures.

During the year Company has defaulted repayment of these loans. The details of thesedefaults are as under:

Particulars Amt of Default as on 31st March 2016 Period of Default Remarks
Rs. in lacs
Bank of Maharashtra
- Term Loans 1183.14 1 year Bank has taken over possession of the Property to recover overdue installments
Corporation Bank 88.00 Over 6 months
- Working Capital Loan

ix. The Company has not raised moneys by way of initial public offer or further publicoffer ( including debt instruments ) or term loans and hence reporting under clause 3(ix)of the Order is not applicable.

x. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company and no material fraud on the Company by its officers oremployees has been noticed or reported during the period.

 

xi. The Company has employees covered under section 197 of the Act and the remunerationpaid is below the limit specified under section 197 read with Schedule V of the CompaniesAct 2013.

xii The Company is not a Nidhi Company and hence reporting under clause 3 ( xii ) ofthe Order is not applicable

xiii. The company has not taken prior approval of Audit Committee and Board ofDirectors for Related Party Transactions during the year. However post facto approval hasbeen obtained. In our opinion and according to the information and explanations given tous subject to the one stated above the Company is in compliance with Section 177 and 188of the Act where applicable for all transactions with the related parties and thedetails of related party transactions have been disclosed in the financial statements asrequired by the applicable accounting standards.

xiv. During the period the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause 3 ( xiv ) of the Order is not applicable to the Company

xv. In our opinion and according to the information and explanations given to usduring the period the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of the Act arenot applicable.

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

For Shahade & Associates
Chartered Accountants
( ICAI Firm Reg. No. 109840W )
Atul Shahade
Place: Mumbai Partner
Date: 27th May 2016 M. No. 35227

ANNEXURE - B

ANNEXURE TO THE INDEPENDENT AUDITOR’S REPORT OF EVEN DATE ON THE STANDALONEFINANCIAL STATEMENTS OF APLAB LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013

We have audited the internal financial controls over financial reporting of AplabLimited as of 31st March 2016 in conjunction with our audit of the financialstatements 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company’s policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

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 Reportingand the Standards on Auditing to the extent applicable to an audit of internal financialcontrols both issued by the Institute of Chartered Accountants of India. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively 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 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 auditor’s 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 adverse audit opinion on the Company’s internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company’s 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 company’s internal financial control overfinancial reporting includes those policies and procedures that

(1) pertains to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company’s assets that could havea 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.

Qualified Opinion

According to the information and explanations given to us and based on our audit thefollowing material weaknesses have been identified as at March 31st 2016 :

(a) The new ERP system was not fully established tested and appropriate reportsavailable leading to inherent weakness to obtain and test the desired level of internalfinancial controls.

(b) The Company did not have appropriate internal controls for periodic reconciliationof physically inventory with the inventory records which may have resulted inmisstatement of inventory values in the books of account.

(c) The consumption of material for production and other purposes is not reconciledwith Cost of Goods sold as it appearing in the ERP System mainly due to lack ofproduction batch closing procedures.

(d) The adequacy of internal financial control over Servicing and Rental of MachinesIncome is inadequate in terms of In Warranty & Out of Warranty / AMC billingconsumption of spares and its invoicing follow up on renewals etc.

A ‘material weakness’ is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company’s annual or interim financialstatements will not be prevented or detected on a timely basis.

In our opinion the Company has in all material respects maintained adequate internalfinancial controls over financial reporting as of March 31 2016 based on the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India and except for the effects / possible effects of the materialweaknesses described above on the achievement of the objectives of the control criteriathe Company’s internal financial controls over financial reporting were operatingeffectively as of March 31 2016.

We have considered the material weaknesses identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the March 31 2016financial statements of the Company and these material weaknesses do not affect ouropinion on the standalone financial statements of the Company.

For Shahade & Associates
Chartered Accountants
( ICAI Firm Reg. No. 109840W )
Atul Shahade
Place: Mumbai Partner
Date: 27th May 2016 M. No. 35227