We have audited the attached Balance Sheet of Aplab Limited as on March
31, 2012, the Profit and Loss Account and the Cash Flow Statement for
the year ended on that date all of which we have signed under reference
to this report. These financial statements are the responsibility of
the management of the Company. Our responsibility is to express an
opinion on these financial statements based on our audit.
We conducted our audit in accordance with auditing standards generally
accepted in India. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes,
examining on test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall presentation of the
financial statements. We believe that our audit provides a reasonable
basis for our opinion.
We report as follows:- 1. As required by the Companies (Auditor's
Report) Order, 2003 and as amended by Companies (Auditor's Report)
(Amednment) Order, 2004 (together the Order) issued by the Central
Government of India in terms of Section 227(4A) of the Companies Act,
1956 we annex hereto a statement on the matters specified in paragraphs
4 and 5 of the said Order.
2. We invite reference to the accumulated losses of the
wholly owned subsidiary, Intel Instruments & Systems Ltd. (Intel),
impacting the realisability of the Company's Investment Rs. 225 lacs
(P.Y. Rs.225 lacs), Debtors Rs. 338.56 lacs (P.Y. Rs. 326.39 lacs) and
Loans & Advances Rs. 422.62 lacs (P.Y. Rs. 219.72 lacs). This is also a
matter referred to in our audit report for the previous year 2010-11.
3. We have obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purpose of our audit.
4. In our opinion, proper books of accounts as required by
law have been kept by the Company, so far as appears from our
examination of these books and proper returns adequate for the purposes
of our audit have been received from the branches not visited by us.
5. The Balance Sheet and Profit and Loss Account and the
Cash Flow Statements dealt with by this report are in agreement with
the books of accounts.
6. In our opinion and to the best of our knowledge and
according to the explanations given to us, the Balance Sheet, Profit &
Loss Account and the Cash Flow Statement comply with the accounting
standards referred to in Section 211 (3C) of the Companies Act, 1956 to
the extent applicable subject to non-compliance with AS-15 which
requires accounting for accrued liability towards employment benefits
including gratuity. As per the
Company's accounting policy in this regard, gratuity is recognized when
contribution is made to the Group
Gratuity Scheme. The year-end amount payable to LIC under this scheme
not recognized in the financial statements is Rs 860.44 lacs.
7. On the basis of the written representations received from the
Directors as on March 31, 2012 which have been taken on record by the
Board of Directors, we report that none of the Directors is
disqualified as on March 31, 2012 from being appointed as a Director in
terms of Section 274(1)(g) of the Companies Act, 1956.
8. We further report that, without considering our observations at
Para 2 above, the effect of which could not be determined, had the
observations made by us in Para 6 above been considered while compiling
accounts for the year, the profit after tax of Rs.71.62 lacs for the
year would have resulted into a loss of Rs 788.82 lacs and balance of
Reserves and Surplus would have been Rs1,302.02 lacs as against the
reported figure of Rs 2,162.46 lacs. Considering this, in our opinion
and to the best of our information and according to the explanations
given to us, the said Balance Sheet and Profit and Loss Account read
with the notes thereon give the information required by the Companies
Act, 1956 in the manner so required; and do not give a true and fair
in the case of the Balance Sheet, of the state of affairs of the
Company as at 31 st March 2012 in the case of the Profit and Loss
Account, of the profit for the year ended on that date in the case of
Cash Flow Statement, of the cash flows for the year ended on that date.
ANNEXURE TO THE AUDITORS' REPORT
(Annexure referred to in Paragraph 1 of our report of even date on the
accounts for the year ended 31st March 2012 of Aplab Limited)
I. (a) The Company has maintained reasonable records showing full
particulars including quantitative details and situation of fixed
(b) Physical verification of some items of fixed assets was conducted
by the management during the year and we are informed that no material
discrepancies were noticed on such verification.
(c) During the year, Company has not disposed of any substantial/major
part of fixed assets.
ii. (a) As explained to us, the inventory has been physically verified
during the year by the management. In our opinion, the frequency of
verification is reasonable.
(b) In our opinion and according to the information and explanations
given to us, the procedures of physical verification of inventory
followed by the management are reasonable and adequate in relation to
the size of the Company and the nature of its business.
(c) In our opinion and according to the information and explanations
given to us and on the basis of our examination of the records of
inventory, the Company is maintaining proper records of inventory. The
discrepancies noticed on physical verification of inventory as compared
to the book records were not material and have been properly dealt with
in the books of account.
iii. (a) According to the information and explanations given to us, the
Company has not granted any loan to parties listed in the Register
maintained under Section 301 of the Companies Act, 1956. Consequently,
the requirements of Clause (iii) (a) to (iii) (d) are not applicable.
(b) According to the information and explanations given to us, the
Company has taken unsecured loans amounting to Rs.961 lacs from its
Directors who are listed in the register maintained under section 301
of the Companies Act, 1956.
(c) The rate of interest and other terms and conditions of these loans
taken are prima facie not prejudicial to the interest of the Company.
(d) In respect of loans taken repayment of principal and payment of
interest are not stipulated.
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and nature of its business
with regard to the purchase of inventory and fixed assets, and with
regard to the sale of goods. On the basis of our examination and
according to the information and explanations given to us, we have
neither come across nor have been informed of any instance of major
weakness in the aforesaid internal control procedures.
v. In respect of transactions entered in the register
maintained in pursuance of Section 301 of the Companies Act, 1956,
(a) Based on audit procedures applied by us, to the best of our
knowledge and belief and according to the information and explanations
given to us, we are of the opinion that the particulars of contracts /
arrangements that needed to be entered into the register maintained
under Section 301 have been so entered.
(b) According to the information and explanations given to us the
transactions of purchase and sale of goods made in pursuance of such
contracts / arrangements with some parties / companies listed in the
register maintained under section 301 are for specialized items for
which alternative sources of supply are not
readily available; as such comparison of prices could not be made.
However, as certified by the management, these transactions are at
competitive prices considering the quality and non standard nature of
products and terms of payment and other commercial considerations.
vi. In our opinion and according to the information and explanations
given to us, the Company has complied with the directives issued by the
Reserve Bank of India, the provisions of Section 58A and 58AA of the
Companies Act, 1956 and the rules framed thereunder with regard to the
deposits accepted from the public.
vii. In our opinion, the Company has an internal audit system
commensurate with the size and the nature of its business.
viii. We have broadly reviewed the books of account maintained by the
Company relating to the manufacture of electronic products and
components thereof. We have not made an examination of the cost records
required to be maintained under companies (Cost Accounting Records)
rules 2011 in respect of their accuracy and completeness as the company
is in the process of obtaining the compliance report of the cost
ix. (a) According to the records of the Company and information and
explanations given to us, the Company has been generally regular in
depositing undisputed statutory dues including Provident Fund, Investor
Education and Protection Fund, Employees State Insurance, Income tax,
Wealth tax, Service tax, Customs Duty, Excise Duty, cess and other
statutory dues with the appropriate authorities during the year, though
there is a slight delay in few cases. There are no undisputed statutory
dues outstanding as of March 31, 2012 for a period of more than six
months since they became payable, except as under:
Name of Nature of Amount Period Due Date
Statute dues (Rs. in to which
VAT Tax 0.12 2011-12 15/10/2011
VAT Tax 0.02 2011-12 15/12/2011
VAT Tax 0.15 2011-12 15/02/2012
x. Subject to our observation in para 8 of the main report,
the Company does not have accumulated losses as at the end of the year.
The Company has not incurred cash losses during the current financial
year but has incurred cash losses in the immediately preceding
xi. Based on our audit procedures and on the basis of
information and explanations given by the management, we are of the
opinion that the Company has not defaulted in the repayment of dues to
xii. According to the information and explanations given to
us, the Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
xiii. The provisions of any special statute applicable to Chit Fund,
Nidhi or Mutual Benefit Fund/Societies are not applicable to the
xiv. In our opinion and according to information and
explanations given to us the Company is not a dealer or trader of
shares, debentures and other investments.
xv. According to the information and explanations given to
us & subject to our observation in para 2 of our main report, the
Company has given a guarantee for loans taken by its subsidiary from a
bank on terms and conditions, which in our opinion, are prima facie,
not prejudicial to the interest of the Company.
xvi. To the best of our knowledge and belief and according to the
information and explanations given to us, term loans availed by the
Company were, prima facie, applied by the Company for the purposes for
which the loans were obtained.
xvii. According to the information and explanations given to us and on
an overall examination of the balance sheet of the Company, funds
raised on short term basis have, prima facie, not been used for long
term investment and vice versa.
xviii. The Company has not made any preferential allotment to parties
and companies covered under register maintained under Section 301 of
the Companies Act, 1956, during the year.
xix. The Company has not issued any debentures during the year.
xx. The Company has not raised money by any public issues during
xxi. Based on information and the explanations furnished by the
management, which have been relied upon by us, there were no frauds on
or by the company noticed or reported during the year.
For M P Chitale & Co.
Ashutosh Pednekar Thane, Partner
August 14, 2012 ICAI M. No. 41037