| We have audited the accompanying financial statements of Aftek Limited
("the Company), which comprise the Balance Sheet as at 31 March 2015,
and the Statement of Profit and Loss and Cash Flow Statement for the
year then ended, and a summary of significant accounting policies and
other explanatory information.
Management's Responsibility for the Financial Statements
Management is responsible for the matters stated in Section 134(5) of
the Companies Act 2013 (the 'Act') with respect to the preparation of
these financial statements that give a true and fair view of the
financial position, financial performance and cash flows of the Company
in accordance with the Accounting Standards referred to in section 133
of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014.
This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding
the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records,
relevant to the preparation and presentation of the financial
statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors' Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under.
We have conducted our audit in accordance with the Standards on
Auditing specified under section 143(10) of the Act. Those Standards
require that we comply with ethical requirements and plan and perform
the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about
the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor's judgment, including the assessment of
the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor
considers internal control relevant to the Company's preparation and
fair presentation of the financial statements in order to design audit
procedures that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the entity's
Internal Control. An audit also includes evaluating the appropriateness
of accounting policies used and the reasonableness of the accounting
estimates made by management, as well as evaluating the overall
presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our audit opinion.
Basis for qualified opinion
1. Note no.39 regarding, Management has not considered any provision
in respect of outstanding Debtors for a period more than 12 months
amounting to Rs,22,398.36 Lacs which in our opinion, as evidenced by
the poor recovery made during the year, are doubtful of recovery.
Consequently, profit before tax is overstated by Rs,22,398.36 Lacs.
Further in our view there is significant uncertainty as to ultimate
collection of Debtors due to non-receipt from overseas debtors.
Therefore we are further unable to comment on recoverability of balance
debtors amounting to Rs,4,995.58 Lacs;
2. Note no.40 regarding, company has given certain capital advances
and made some investments totaling to Rs,6975.20 Lacs towards the
building under construction at Hinjewadi, Pune, upto the year ended,
31-3-2010, thereafter there are no further developments/construction
made. The said Plot of land is mortgaged to Bank of India -Jersey
Channel Islands against the term loan. However since the Company has
made default in repayment of Principal and Interest thereon, Bank has
demanded repayment total loan and taken the possession of the land
along with the construction in progress. The bank has called for bids
at a base price of Rs,1800.00 Lacs. There is no provision made towards
the eventual loss on such auction, which is presently not ascertainable
till such disposal. The bank has now agreed for an one time settlement
(OTS) of outstanding for Rs,2600 lacs;
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matters
described in the Basis for qualified opinion paragraph, the financial
statements give the information required by the Act in the manner so
required and give a true and fair view in conformity with the
accounting principles generally accepted in India:- a) in the case of
the Balance Sheet, of the state of affairs of the Company as at March
31, 2015;
b) in the case of the Statement of Profit and Loss, of the loss for the
year ended on that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of matter
1. Note no.34 b (ii) regarding Liability if any of the pending
assessment under Income Tax, Sales tax (including interest, if any)
which are presently not ascertainable.
2. Without qualifying our opinion, we draw attention to Note No.41
regarding intangible Assets under development for various ongoing
projects. Due to the delay in the projects, Intangible Assets under
development for Rs, 19910.32 Lacs are yet to be put to use as on the
date of balance sheet. The company is of the opinion that with the
improved market conditions all the Assets under development will be
profitably used by the company in the future projects.
Report on Other Legal and Regulatory Requirements:
1. As required by the Companies (Auditor's Report) Order, 2015 ("the
Order") issued by the Central Government of India in terms of
sub-section (11) of section 143 of the Act, we give in the Annexure a
statement on the matters specified in paragraphs 3 and 4 of the Order,
to the extent applicable.
2. As required by section143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations
which to the best of our knowledge 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 the Company so far as appears from our examination of those
books.
c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt 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 Opinion paragraph, in our opinion, and with regard to the non
availability of the Actuarial valuation of the Gratuity Liability. the
aforesaid financial statements comply with the accounting standards
specified 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 on March 31, 2015 and taken on record by the Board of Directors,
none of the directors is disqualified as on March 31, 2015, from being
appointed as a director in terms of section 164 (2) of the Act.
f) with respect to other matters to be included in the Auditor's Report
in accordance with Rule 11 of the Companies (Audit and Auditors) Rules,
2014, in our opinion and the best of our information and according to
explanation given to us :
i. Company has disclosed the amount of pending litigations on its
financial position in its Financial Statements which is in the nature
of contingent liability being not required to be provided in the
accounts.
ii. The Company does not anticipate any material foreseeable losses,
on long- term contracts.
iii. There has been delay in transferring amounts of Rs, 13.91 Lacs,
which were required to be transferred to the Investor Education and
Protection Fund by the Company.
Annexure to the Independent Auditors' Report of Aftek Limited
The Annexure referred to in our Independent Auditors' Report to the
members of company on the financial statement for the year ended 31
March 2015, in Paragraph 1 under the heading of "report on other legal
and regulatory requirements" of even date
We report that
i. a) The Company has maintained proper records showing full
particulars including quantitative details and situation of its fixed
assets.
b) The Fixed assets of the Company have been physically verified by the
management which in our opinion, is reasonable having regard to the
size of the company and the nature of its assets. No material
discrepancies have been noticed on such verification.
ii. a) In our opinion, physical verification of inventory lying with
the company has been conducted at reasonable intervals by the
management.
b) In our opinion, the procedures of physical verification of inventory
followed by the management are adequate in relation to the size of the
Company and the nature of its business.
c) The Company has maintained proper records of inventory. No material
discrepancies have been noticed on physical verification between
physical stock and book records.
iii. In respect of loans, secured or unsecured to/from companies, firms
or other parties covered in the register maintained under Section 189
of the Companies Act, 2013.
a) In the case of the loans granted to the bodies corporate, the
borrowers have been regular in the payment of the interest as
stipulated. The terms of arrangements do not stipulate any repayment
schedule and the loans are repayable on demand. Accordingly, this
paragraph is not applicable to the Company in respect of repayment of
the principal amount.
b) There are no overdue amounts of more than rupees one lakh in respect
of the loans granted to the bodies corporate.
iv In our opinion and according to the information and explanations
given to us, having regard to the explanation that the IPRs purchased
are of special nature and suitable alternative source do not exist for
obtaining comparable quotation, there exist an adequate internal
control system commensurate with its size and nature of its business
with regards to purchase of inventory and fixed assets and with regards
to the sale of goods and service. During the course of our audit, we
have not observed any major weakness in such internal control system.
v. In our opinion, and according to the information and explanations
given to us, the company has not accepted any deposits during the year
under audit.
vi. We have been informed by the company, that the maintenance of cost
record under section 148 (1) of the Act has not been prescribed by the
Central Government.
vii. a) According to the information and explanations given to us the
company is not regular in depositing undisputed statutory dues,
Employees State Insurance, Sales-tax, Wealth Tax, Service Tax Custom
Duty, Excise Duty, Cess and any other statutory dues with the
appropriate authorities. Undisputed provident fund dues are not
regularly deposited with the appropriate authorities. In respect of
income tax, the Company is not regular in depositing those dues with
the appropriate authorities and there have been significant delays in a
large number of cases. Undisputed amounts payable in respect of above
mentioned taxes which were outstanding, at the year-end for a period of
more than six months from the date they became payable are as follows:
Name Of Nature of Dues Amount Period to which
Amount relates Date of
The
Statute (Rs, payment
in
Lacs)
Income
tax Act,
1961 Deduction of
Tax At Source 177.95 April, 2010 to
September,2014 Not Paid
Employees
Provident
Fund Provident
Fund
Contribution 82.53 April, 2010 to
september,2014 Not Paid
and
Miscella-
neous
Provisions
Act, 1952
Maharashtra
State Tax
on Profession
Tax 6.24 September,
2010 to
september,2014 Not Paid
Profse-
ssions,
Trades,
Callings
and
Employments
Act, 1952
Maharashtra
Value Added Sales Tax 0.20 March,2011 to
september,2014 Not Paid
Tax Act,
2002
Central
Sales Tax
Act, 1956 Central
Sales Tax 21.48 September,2010
to september,
2014 Not Paid
b) According to the information and explanations given to us,
followings dues are payable to concerned authorities on account of
dispute as at 31st March, 2015.
Name of Nature of the Dues Amount Period to Date of
The Amount
relates
Income
TaxAct,
1961 Taxon Regular 30.52 2008-09 Not Paid
Assessments
U/s143(3)
Income
TaxAct
1961 Taxon Regular 8.78 2009-10 Not Paid
Assessments
U/s143(3)
c) According to the information and explanations given to us, there
were Rs.13.91 Lacs ,which were required to be transferred to the
investor education and protection fund in accordance with the relevant
provision of the Act and rules there under.
viii. The company has no accumulated losses at the end of the financial
year and has not incurred cash losses in the financial year and has not
incurred cash losses in the immediately preceding financial year;
ix. According to the information and explanations given to us the
company has defaulted in repayment of dues to a bank the details of the
same as on 31st March, 2015 are as mentioned below.
Sr.
No Name of the Bank Type of
Loan Period to Defaulted Defaulted
which Principal Interest
Amount lacs>
relates
I BankofIndia- Term
jorsey canel
Islands Loan April, 2011
toMarch,
2015 3037.97 360.83
I State Bankof Term
Bikaner &
Jaipur Loan April, 2011
toMarch,
2015 4000.00 2136.00
III State Bank of Cash
Bikaner&
Jaipur Credit
A/c April, 2011
toMarch,
2015 1479.28 624.41
The company did not borrow any money by way of debenture issues. The
company had not taken loans from any financial institution during the
year.
x. The company has given guarantee for loans taken by Associates from a
bank, According to the information and explanations given to us the
terms and conditions whereof are prima facie not prejudicial to the
interest of the company.
xi. In our opinion, the term loans have been used for the purpose for
which the same were obtained.
xii. According to the information and explanation given to us , no
material fraud on or by the company has not been noticed or reported
during the year nor we have been informed of any such case by the
management that causes the financial statements to be materially
misstated.
ForGMJ&Co.
Chartered Accountants
Firm's Regn. No. 103429W
CA Haridas Bhat
Partner
M. No. 039070
Mumbai 30th May, 2015
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