To the Members of Aplab Limited Report on the Financial Statements
We have audited the accompanying Ind AS financial statements of Aplab Limited(the Company) which comprise the Balance Sheet as at March 312018 and theStatement of Profit and Loss ( including Other Comprehensive Income ) Cash Flow Statementand Statement of Changes in Equity for the year then ended and a summary of significantaccounting 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 Ind AS financial statements that give a true and fair view of the stateof affairs ( financial position) profit or loss (financial performance including othercomprehensive income) cash flows and changes in equity of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS)prescribed under section 133 of the Act read with relevant Rules issuedthere under.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone Ind AS financialstatements based 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 there under.
We conducted our audit of the standalone Ind AS financial statements in accordance withthe 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 standalone IndAS financial statements are free frommaterial misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud
or error. In making those risk assessments the auditor considers internal financialcontrol relevant to the Company's preparation of the standalone IndAS financial statementsthat give a true and fair view in order to design audit procedures that are appropriate inthe circumstances but not for the purpose of expressing an opinion on whether the Companyhas in place an adequate internal financial control system over financial reporting andthe operating effectiveness of such controls. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the standalone Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on standalone Ind AS financial statements.
Basis of Qualified Opinion
a. The Company has incurred a loss of Rs. 1385 lakhs during this year. The Company hasaccumulated losses and its net worth has continued to remain negative during this year.The Company could not repay overdue Term Loans or matured Public Deposits or honor LCs onits due dates. The Bank has taken symbolic possession of Land & Building at BhosariPune due to the default of Rs. 1177 lakhs and initiated recovery action.
b. The Company during the year could not pay various statutory dues in time and thedelay ranges between 2 to 12 months. The Unpaid Statutory Dues amounted to Rs. 257 lakhsand separated employee Unpaid Gratuity / other dues are Rs. 592 lakhs at the year end.
These events indicate material uncertainty that casts doubt on the Company's ability tocontinue as a going concern considering negative net worth continued losses andgenerating inadequate operational inflows. The Company is in the process of selling few ofits properties to repay debts and induce funds for its operations.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements prepared by the Companyon a going concern basis give the information required by the Act in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India including the Ind AS of the state of affairs (financialposition) of the Company as at 31st March2018 and its loss (financial performanceincluding other comprehensive income) its cash flows and the changes in equity for theyear ended that date.
Emphasis of Matter
a. The Inventory includes Rs.1790 lakhs which is nonmoving and may include someobsolescence. There are also un-reconciled and unconfirmed stocks worth Rs. 963 lakhs. 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. 10).
b. The Receivables of Rs. 362 lakhs are overdue for more than a year and include Rs.253 lakhs over 3 years.
These are not reconciled or confirmed by the parties. Some of these may have becomedoubtful or bad. However the Company has not made identification & provision fordoubtful debts in the financial statements. (Refer Note no. 10)
c. In spite of cash losses Impairment of Assets has not been worked out and providedas required under AS 28.
The comparative financial information of the Company for the year ended 31st March2017and the transition date opening balance sheet as at 1st April 2016 included in thesestandalone Ind AS financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with the Companies (Accounting Standards)Rules 2006.
These comparative financial information of the Company for the year ended 31st March2017 and the transition date opening balance sheet as at 1st April 2016 included in thesestandalone Ind AS financial Statements were adjusted for the differences in the Accountingprinciples adopted by the Company on transition to the Ind AS which have been audited byus.
a. In the last financial year Company had entered into a Memorandum of Understandingto sell the main Unit at Wagle Estate Thane for a sum of Rs. 35 crores this was approvedby the Board of Directors of the Company. (Refer Note no. 5 ). The Sale transaction hasnot been completed & Company continued to occupy the said premises. This unit has beenshown as Asset held for Sale however full depreciation has been charged during this yearas Company continued to Use these premises.
b. The Land & Building at Bhosari Pune have been also shown as Asset held for Saleand no depreciation has been charged as per Ind AS requirements.
c. The Company during the year could not fully reconcile some important accounts. Theseare receipts from debtors Rs.457.12 lakhs payments to creditors Rs. 242.06 lakhs ExciseService Tax & VAT liabilities.
d. The Company has not funded Gratuity Policy to the extent of Rs 1130 lakhs. Inaddition there are unpaid Gratuity and other dues of separated employees of Rs.592 lakhson the Balance Sheet date and includes dues over 4years (Refer Note no. 23). No interesthas been provided on these outstanding.
e. The new ERP System introduced during FY 2015-16 is not fully established or testedfor various reports and daybooks. We have relied upon the guidance given by the systemproviders for giving necessary effects to certain financial transactions and InterimSystem Accounts balances.
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 in the paragraph3 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 the Cash Flow Statement andStatement of Changes in Equity dealt with by this Report are in agreement with the booksof account.
d. In our opinion the aforesaid standalone Ind AS financial statements Comply with theIndian Accounting Standards specified under section 133 of the Act;
e. On the basis of written representations received from the directors as on March 312018 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2018 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 Atothis 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 which are required to betransferred to the Investor Education and Protection Fund by the Company.
| ||For Shahade& Associates |
| ||Chartered Accountants |
| ||(ICAI Firm Reg. No. 109840W) |
| ||Atul Shahade |
| ||Partner |
| ||M. No.35227 |
|Place: Mumbai || |
|Date: 29thMay2018 || |