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Aplab Ltd.

BSE: 517096 Sector: Engineering
NSE: APLAB ISIN Code: INE273A01015
BSE 14:37 | 21 Feb 22.00 -1.15
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NSE 00:00 | 29 Jan Aplab Ltd
OPEN 22.00
PREVIOUS CLOSE 23.15
VOLUME 285
52-Week high 30.70
52-Week low 19.15
P/E
Mkt Cap.(Rs cr) 11
Buy Price 0.00
Buy Qty 0.00
Sell Price 22.00
Sell Qty 95.00
OPEN 22.00
CLOSE 23.15
VOLUME 285
52-Week high 30.70
52-Week low 19.15
P/E
Mkt Cap.(Rs cr) 11
Buy Price 0.00
Buy Qty 0.00
Sell Price 22.00
Sell Qty 95.00

Aplab Ltd. (APLAB) - Auditors Report

Company auditors report

To the Members of Aplab Limited Report on the Financial Statements

We have audited the accompanying financial statements of Aplab Limited("the Company") which comprise the Balance Sheet as at March 31 2017 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 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 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 referredspecified under section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement 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 accordancewith the Standards on Auditing specified under section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

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 control relevant to the Company's preparation of the financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances but not for the purpose of expressing an opinion onwhether the Company has in place an adequate internal financial control system overfinancial 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 evaluating theoverall 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 a loss of Rs. 1245 lacsduring this year. The Company has accumulated losses and its net worth has continued toremain negative during this year. The Company could not repay any installment of the TermLoans or repay Public Deposits or honor LCs on its due dates. The Bank has taken symbolicpossession of one of the Company property due to the default of Rs. 1177 lacs andinitiated recovery action.

( Refer Note no.2 & 7 ) b. The Company during the year could not pay variousstatutory dues in time and the delay ranges between 3 to 12 months. The Unpaid StatutoryDues amounted to Rs. 332 lacs and Unpaid Gratuity is Rs. 520 lacs at the year end. ( ReferNote no. 7 ) These events indicate uncertainty that casts doubt on the Company's abilityto continue as a going concern considering continued losses and operational inflows.

The Company is in the process of selling few of its properties to repay debts andinduce funds for its operations.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us and subject to the qualifications and explanations given above the aforesaidfinancial statements prepared by the Company on a going concern basis give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India (a) In the case ofthe Balance Sheet of the state of affairs of the Company as at 31st March2017;(b) In the case of the Statement of Profit and Loss of the Loss for the year ended onthat date; and (c) In the case of the Cash Flow Statement of the cash flows for the yearended on that date.

Emphasis of Matter a. The Inventory includes Rs. 2085 lacs which is non-moving andmay include some obsolescence. There are also unreconciled and unconfirmed stocks. TheCompany has valued entire old inventory at cost instead of least of Cost or NRV. TheCompany claims that there is no obsolescence in electronics industry and therefore valuedinventory at Cost. ( Refer Note no. 11). b. The Receivables of Rs. 553 lacs are overduefor more than a year and include Rs. 304 lacs over 3 years. These are not reconciled orconfirmed by the parties. Some of these may have become doubtful or bad. However the

Company has not made identification & provision for doubtful debts in the financialstatements. (Refer Note no. 11 ) c. In spite of cash losses Impairment of Assets has notbeen worked out and provided as required under AS 28.

Other Matters a. During the year Company has entered into a Memorandum ofUnderstanding to sell the main Unit at Wagle Estate Thane for a sum of Rs. 35 crores asapproved by the Board of Directors of the Company. ( Refer Note no. 7 ) b. The Company hasnot funded Gratuity Policy to the extent of Rs. 1077 lacs. In addition there is unpaidGratuity liability of separated employees of Rs. 520 lacs on the Balance Sheet date andincludes dues over 5 years (Refer Note no. 7 ) c. The new ERP System introduced duringlast year is not yet fully established or tested for various reports and daybooks. We haverelied upon the guidance given by the system providers for giving necessary effects tocertain financial transactions.

Report on Other Legal and Regulatory Requirements

1. As required under Section 143(1) of the Companies Act 2013 and Companies (Audit andAuditors) Rules 2014 (rule 11 clause (c)) we state that the company has providedrequisite disclosures in its financial statements as to holdings as well as dealings inSpecified Bank Notes during the period from 8th November 2016 to 30th December 2016 andthese are in accordance with books of account maintained by the Company.

2. 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 in the paragraph3 and 4 of the order.

3. As required by section 143(3) of the Act we report that; a. We have obtained allthe information and explanations which to the best of our knowledge and belief werenecessary for the purpose of our audit; b. In our opinion proper books of account asrequired by law have been kept by the Company so far as appears from our examination ofthose books; c. The Balance Sheet Statement of Profit and Loss and Cash Flow Statementdealt with by this Report is in agreement with the books of account; d. The Balance SheetStatement of Profit and Loss and Cash Flow Statement comply with the Accounting Standardsspecified under section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014; e. On the basis of written representations received from the directors as onMarch 31 2017 and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2017 from being appointed as a director in terms of section164 (2) of the Act. The Board has provided us with a copy of Board Note in this matter andCompany Secretary 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"; g. The Company has provided requisitedisclosures in the financial statements as to the holding as well as dealings in Specifiedbank Notes during the period from 8th November 2016 to 20thDecember 2016. Based on our Audit procedures & relying on management representationwe report that the disclosures are in accordance with the books of account maintained bythe company and as produced to us by the management. h. With respect to the other mattersto be included in the Auditor's Report in accordance with Rule 11 of the Companies (Auditand Auditors) Rules 2014 in our opinion and to the best of our information and accordingto the explanations given to us: i) The Company has not provided the impact of pendinglitigations in its financial statements.

The total value of such litigations has been given in para vii(b) of the Annexure A tothis report ; ii) The Company did not have any long-term contracts including derivativecontracts in which there were any material foreseeable losses; iii) There is no delay intransferring amounts required to be transferred to the Investor Education and ProtectionFund by the Company.

For Shahade & Associates Chartered Accountants (ICAI Firm Reg. No. 109840W)

Atul Shahade Place: Mumbai

Partner Date: 29th May 2017

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 2017. )

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 immovableproperties of freehold or leasehold land and buildings and the original title deeds aregiven to the Banks as security against various loans obtained. The Company has copies ofthese title deeds and on examination of these copies and other documents we observed thatall the title deeds of the properties are held in the name of the Company or in the nameof amalgamated subsidiary. ii. As explained to us the inventory has been physicallyverified during the year by the management at the various locations. In our opinion thefrequency of such verification needs to be substantially improved at regional offices.

As informed to us the discrepancies noticed in physical verification of inventory ascompared to the book records were Rs. 1095.57 lacs at various locations and the Companyis in the process of reconciling the same with the books of account. iii. According to theinformation and explanations given to us the Company has not granted any loans to theparties listed in the Register maintained under Section 189 of the Companies Act 2013.Consequently the requirements of Clause (a) to (c) are not applicable. iv. The Companyhas not granted any loans made investments or provided guarantees and hence reportingunder clause 3 ( iv ) of the Order is not applicable. v. In our opinion and according tothe information and explanations given to us the Company has not fully complied with thedirectives issued by the Reserve Bank of India the provisions of Section 73 to 76 of theCompanies Act 2013 and the rules framed there under with regard to the deposits acceptedfrom the public. Company has not repaid on due dates matured Public deposits of Rs.

363 Lacs and interest Rs. 76.77 lacs as on 31st March 2017. The Company hadnot maintained liquid assets against deposits during the year as per the rules. vi. Wehave 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 costrecords have been maintained. We have however not made a detailed examination of the Costrecords with a view to determine whether they are accurate or complete. vii. (a) Accordingto the records of the Company and information and explanations given to us the Companyhas not been regular in depositing statutory dues including Provident Fund EmployeesState Insurance Income tax Service Tax Customs Duty Excise Duty Value Added Tax LBTCess and other statutory dues with the appropriate authorities during the year as thereare cases of delay throughout the year. Total outstanding of all these statutory dues isRs. 306.35 lacs on the year end date. There are undisputed statutory dues of Rs. 25.85lacs outstanding as of March 31 2017 for a period of more than six months since theybecame payable. The Company has transferred amount of Rs. 1.56 lacs to Investor Educationand Protection Fund as on 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 :-

Amount (Rs. in F.Y. Forum where dispute is pending
Nature of Dues 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 2.33 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 988.38

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 2017 Period of Default Remarks
Rs. in lacs
Bank of Maharashtra - Term Loans 1177.40 2 years Bank has taken symbolic possession of the Property to recover overdue installments. Default is the excess
Corporation Bank Over
- Working Capital Loan 32.42 1 year amount drawn over the Drawing Power each month. During the year in most of the months the account was overdrawn.

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 theinformation and explanations given to us no fraud by the Company and no material fraud onthe Company by its officers or employees 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) of the Order is not applicable xiii. The company has taken prior approval of AuditCommittee and Board of Directors for Related Party Transactions during the year. In ouropinion and according to the information and explanations given to us the Company is incompliance with Section 177 and 188 of the Act where applicable for all transactionswith the related parties and the details of related party transactions have been disclosedin the financial statements as required by the applicable accounting standards. xiv.During the period the Company has not made any preferential allotment or private placementof shares or fully or partly convertible debentures and hence reporting under clause 3 (xiv ) of the Order is not applicable to the Company xv. In our opinion and according tothe information and explanations given to us during the period the Company has notentered into any non-cash transactions with its directors or persons connected with himand hence provisions of section 192 of the Act are not applicable. xvi. The Company is notrequired to be registered under section 45-I of the Reserve Bank of India Act 1934.

For Shahade & Associates Chartered Accountants (ICAI Firm Reg. No. 109840W)

Atul Shahade Place: Mumbai

Partner Date: 29th May 2017

M. No. 35227

ANNEXURE - B

ANNEXURE TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE FINANCIAL STATEMENTSOF 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 2017 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 the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 financial controlssystem over 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) pertains 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.

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 March 2017: (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 2017 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 2017.

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 2017financial statements of the Company and these material weaknesses do not affect ouropinion on the financial statements of the Company.

For Shahade & Associates Chartered Accountants (ICAI Firm Reg. No. 109840W)

Atul Shahade Place: Mumbai

Partner Date: 29th May 2017

M. No. 35227