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Apt Packagings | Auditor's Report > Chemicals > Auditor's Report from Apt Packagings - BSE: 506979, NSE: N.A
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Apt Packagings

BSE: 506979|ISIN: INE046E01017|SECTOR: Chemicals
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Mar 13
Auditor's Report (Apt Packagings) Year End : Mar '14
We have audited accompanying financial statements of APT Packaging
 Limited (''the Company''), which comprise the Balance Sheet as at
 31** March 2014, the Statement of Profit & Loss and the Cash Flow
 Statement for the year ended and a summary of significant accounting
 policies and other explanatory information.
 
 Management'' Responsibility for the Financial Statements
 
 Management is responsible for the preparation of these financial
 statements that give a true and fair view of the financial position,
 financial performance and cash flow of the company in accordance with
 Accounting Standard referred to in-sub section (3C) of section 211 of
 the Companies Act, 1956(''the Act'') read with the General Circular
 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs
 in respect of Section 133 of the Companies Act, 2013; General Circular
 08/2014 dated 4'' April, 2013 of the Ministry of Corporate Affairs
 the financial statement, auditor''s report and board reports are
 prepared and presented according to the relevant provisions / schedules
 / rules of the Companies Act 1956 and in accordance with the accounting
 prindples generally accepted in India. This responsibility includes the
 design, implementation and maintenance of internal control 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 conducted our audit in accordance
 with the Standards on Auditing issued by the Institute of Chartered
 Accountant of India. Those standards require that we comply with
 ethical requirement and plan and perform the audit to obtain reasonable
 assurance about whether the financial statements are free from material
 misstatements.
 
 An audit involves performing procedures to obtain audit evidence about
 the amounts and disclosure in the financial statements. The procedures
 selected depend on the auditor''s judgment, including the assessment
 of the risk 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 statement in order
 to design audit procedures that are appropriate in the circumstances,
 but not for the purpose of expressing opinion on the effectiveness of
 the company''s internal control. An audit also includes evaluating the
 appropriateness of accounting policies used and the reasonableness of
 the accounting policies used and the reasonableness of the accounting
 estimate 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.
 
 Opinion
 
 1) The accounts of the Company for the year have been prepared on a
 ''Going Concern'' basis, as the Company has once again declared as a Sick
 Company by The Board for Industrial and Financial Reconstruction (BIFR)
 as per hearing held on 01 10-2013 vide their order dated 20 / 11 /
 2013.The PNB has been appointed as the ''Operating Agency'' [OA] by
 the BIFR. According to information and explanation given to us the
 company is in the process of preparing the draft rehabilitation scheme
 which is to be submitted before the BIFR and OA
 
 2) The outstanding balances of debtors, creditors, loans and advances
 including inter corporate deposit (taken and given),balance with
 statutory/fisca! liabilities (Assets & Liabilities) i.e. Excise &
 Service tax deposits/balances subject to confirmations, reconciliation
 and consequent adjustment, if any. (Refer Note No.37 )
 
 3) There is certain unimplemented portion of sanction scheme (SS07) to
 be implemented specifically recovery of special capital incentives and
 interest thereon by Government of Maharashtra, extension of sales tax
 deferral period for further eight years and past & future interest on
 the sales tax deferral dues of the resulting company Machhar Industries
 Ltd. while discharging the company as SICK Industrial company which was
 declared as a SICK Company on 17.12.2002 by the Hon''ble BIFR vide its
 order dated 16.06.2011 and accordingly, while preparing and presenting
 the financial statements for the year under consideration the company
 has followed the order of BIFR.  (Refer Note No 34)
 
 4) In our opinion subject to stated above and to the best of our
 information and according to the explanations give to us, the aforesaid
 financial statements give the information required the Act in the
 manner so required and give a true and fair view in conformity with
 accounting principles generally accepted in India:
 
 a) In the case of Balance Sheet, of the state of affairs of the company
 as at March 31, 2014;
 
 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.
 
 Report on Other Legal and Regulatory Requirements
 
 1) As required by the Companies (Auditor''s Report) Order, 2003(''the
 Order'') as amended, issued by the Central Government of India in terms
 of Section 227(4A) of the Companies Act, 1956, and on the basis of test
 checks of the books and the records of the company and according to the
 information and explanations given to us, we annexed hereto a statement
 on the matters specified in paragraphs 4 and 5 of the said Order.
 
 2) Further to our comments in the Annexure referred to above, we report
 that:
 
 a) Subject to what is stated at point no.2 in section ''Opinion'', we
 have obtained all the information and explanation which to the best of
 our knowledge and belief were necessary for the purpose of our audit;
 
 b) In our opinion, proper books of accounts as required by Law have
 been kept by the company as so far as appears from our examination of
 those books;
 
 c) The Balance Sheet and Statement of Profit & Loss Account and Cash
 Flow Statement dealt with by this report are in agreement with the
 books of account;
 
 d) In our opinion, Balance Sheet, the statement of Profit & Loss
 Account and the Cash Flow Statement comply with Accounting Standards
 notified under the Act read with the General Circular 15/2013 dated
 13th September, 2013 of the Ministry of Corporate Affairs in respect of
 Section 133 of the Companies Act, 2013; General Circular 08/2014 dated
 4th April, 2013 of the Ministry of
 
 Corporate Affairs the financial statement;
 
 e) On the basis of the written representations received from the
 Directors, taken on record by the Board of Directors, and according to
 the information and explanations given to us, none of the directors is
 disqualified as on 31st March 2014 from being appointed as a
 
 Director under section 274(1) (g) of the Companies Act, 1956.
 
 ANNEXURE TO THE INDEPENDENT AUDITORS* REPORT
 
 Statement referred to in paragraph 4 & 5 of the Auditor'' Report of even
 date to the member of APT PACKAGING LIMITED (the Company1) on the
 financial statements for the year ended 31st March, 2014.
 
 1) a) The company has maintained proper records showing full
 particulars including quantitative details and situation of fixed
 assets.
 
 b) Some of the fixed assets are physically verified during the year by
 the management in accordance with a program of verification, which in
 our opinion provides for physical verification of all the fixes assets
 at reasonable intervals. According to the information and explanations
 given to us, no material discrepancies were noticed on such
 verification.
 
 c) Fixed Assets are disposed off by the company during the year do not
 form substantial part thereof.
 
 2) a) As informed to us, the stock of finished goods, work-in-process
 and raw materials at all the units of the Company have been physically
 verified by the Management once in a year except for the goods lying
 with the third parties. In our opinion it should be conducted at least
 twice in a year.
 
 b) In our opinion and according to the information and explanations
 given to us, the procedures of physical verification of stock followed
 by the management are reasonable and adequate in relation the size of
 Company and the nature of its business.
 
 c) On the basis of our examination of the records of inventory, we are
 of the opinion that the company is maintaining proper records of
 inventory. The discrepancies noticed on physical verification of stocks
 as compared to book records were not material and have been properly
 dealt with in the books of account.
 
 3) a) The Company has taken loans from two directors, one ex-director,
 six shareholders, three relatives of the director, three promoters
 Group Company and Resulting Company covered in the register maintained
 under Section 301 of the Companies Act, 1956 to meet the short fall of
 Sanctioned Scheme and as per banker''s clause. The maximum amount
 involved during the year is Rs. 1203.10 Lacs including Opening Balance
 of Rs. 1084.13 Lacs and the yearend balance of loans taken from such
 parties was Rs. 947.98 Lacs.
 
 b) According to the information and explanation given to us, out of the
 above, loan amount of Rs. 68.20 Lacs is Interest free and balance Rs.
 879.78 Lacs is interest bearing. For interest bearing unsecured loans
 the interest is provided. The terms and conditions of these toans are
 not prejudicial to the interests of the company. The company is regular
 in repaying the loan amount and interest whenever applicable and as
 stipulated.
 
 c) The company has not given loans to any firms covered in the register
 maintained under section 301 of the companies Act, 1956.
 
 4) In our opinion and according to the information and explanation
 given to us, there are adequate internal control procedures
 commensurate with the size of the company and the nature of its
 business with regard to purchase of inventory, fixed assets and sale of
 goods. During the course of our audit, we have not observed any
 continuing failure to correct major weaknesses in the internal control
 system.
 
 5) a) According to the information and explanation given to us, we are
 of the opinion that the transaction that needs to be entered in to the
 register maintained u/s 301 of the Companies Act, 1956 have been so
 entered.
 
 b) in our opinion and according to the information and explanation
 given to us, there are transactions exceeding Rs.5 Lacs each which have
 been made at prices, which are reasonable having regard to the
 prevailing market prices, for such goods materials or services at the
 relevant time.
 
 6) The Company has not accepted any deposits from the public within the
 provisions of section 58A and 58AA of the Companies Act, 1956 and rules
 framed there under.
 
 7) A In our opinion, the company has an adequate Internal Audit system
 commensurate with its size and the nature of its business.
 
 8) We have broadly reviewed the books of account maintained by the
 company pursuant to the Rules made by the Central Government for
 
 the maintenance of cost records under section 209(1) (d) of the
 Companies Act, 1956 and are of the opinion that prima facie,the
 prescribed accounts have been made and maintained. ''
 
 9) a) According to the records of the company, the company is generally
 regular in depositing with the appropriate authorities undisputed
 statutory dues including P.F., customs, excise duty, income tax,- sales
 tax, investors education and protection fund, Service Tax, Custom Duty
 Cess and other material statutory dues applicable except Rs.4.68 lacs.
 
 The statements of Arrears of Statutory dues outstanding for more than
 six months are as follows:
 
 TYPE OF TAXES       AMOUNT IN LACS
 
 Property Tax            3.92
 
 Sales Tax               0.77
 
 b) As at 31st March 2014 according to the records of the company, the
 following are the particulars of disputed dues on Account on
 
 Sales Tax have not been deposited:
 
 Name of Statute       Disputed Liability Rs.  Forum where dispute 
                             In Lacs           is pending
 
 Sales Tax Govt, of             4.75           Sales Tax Authority,
 Maharashtra                                   Aurangabad /
                                               Haridwar.
 
 Property Tax                   1.35           Muncipal Corporation 
                                               Authority, Aurangabad.
  
 Income Tax - Carried           0 00           Commissioner of Income
 Forward                (Being Loss Return)    Tax Appeals, Aurangabad 
 Unabsorbed 
 Depreciation of Rs.
 1354.42 Lacs.
 
 10) The company has accumulated losses exceeding its net worth as on
 March 31, 2014. The Company has not incurred any cash losses during the
 financial year covered by our audit considering exceptional items
 profit at Rs. 177.66 Lacs and there was a cash loss in the financial
 year immediately preceding current financial year amounting to Rs.
 196.36 Lacs.
 
 11) Based on our audit procedures and on the information and
 explanations given by the management, the company has delayed repayment
 of loans to banks in respect of term loans. The following are the
 details of the delays.
 
 Particulars                 Amount in Lacs   Period of Delays
 
 Term loans upto Dec             172.18       Up to 120 days. Paid on
 2013 (incl interest                          or vefore 31-03-2014
 of Rs.53.65 Lacs)
 
 Term loans upto Mar             117.30       Lacs 90 days 104.19 Lacs
 2014 (Incl Interest                          Not paid till
 of Rs.3997 Lacs                              31-03-2014. 
 
 
 As at the year end, out of the above delays, term loan amounting to Rs.
 172.18 Lacs have been rectified and hence no delays exist to that
 extent, whereas Rs. 104.19 Lacs still unpaid accordingly delay exist as
 at March 31, 2014.
 
 12) According to the information and explanations given to us and
 records of the company, the company has not granted any loans and
 advances on the basis of securities by way of pledge of shares,
 debentures and securities. According to the provisions of clause 4(xii)
 of the Companies (Auditors Report) order, 2003 the same are not
 applicable to the Company.
 
 13) In our opinion, the company is not a Chit Fund or a Nidhi / Mutual
 benefit fund/Society. Accordingly, the provisions of clause 4 (xiii) of
 the Companies (Auditors Report) order, 2003 are not applicable to the
 Company.
 
 14) In our opinion, the company is not dealing in or trading in shares,
 securities, debentures and other instruments. Accordingly, the
 provisions of clause 4(xiv) of the Companies (Auditors Report) order,
 2003 are not applicable to the Company.
 
 15) In accordance with the sanctioned scheme of Demerger and the order
 of Honorable BIFR, for resulting company, the company has given
 Guarantees to banks and other creditors for their respective
 outstanding balances as on cut off date i.e. 01.04.2007 incase if the
 resulting company fails to pay or shortfall to pay the same. As this is
 stipulated as per the Sanctioned Scheme ordered by the BIFR, the same
 is not treated as prejudicial to the interest of the company. According
 to information and explanations given to us by the managment there is
 outstanding balance of Rs. 399.36 lacs as on 31.03.2014 on account of
 Sales tax deferral.
 
 16) According to the records of the Company, information and
 explanation given to us, the company has obtained term loans during the
 year under audit and the same were applied for the purpose for which
 they are raised except Rs.12.16 Lacs kept in cash credit account with
 lien mark at Punjab National Bank.
 
 17) According to the information and explanations given to us and on
 overall examination of the balance sheet of the company, we are of the
 opinion that the Company has used funds to the extent of Rs. 33.77 Lacs
 raised on short-term basis has been utilized for the repayment of
 long-term loan (Term Loan) except permanent working capital.
 
 18) During the year, the company has not made any allotment of shares,
 hence the provisions of clause 4(xviii) of the Companies (Auditors
 Report) order, 2003 are not applicable to the company.
 
 19) According to the records of the Company, the company has not issued
 any debentures as per the provisions under clause 4(xix) of the
 Companies (Auditors Report) order, 2003.
 
 20) The company has not raised any money by Public-issues during the
 period covered by our Audit report as per the provisions under clause
 4(xx) of the Companies (Auditors Report) order, 2003.
 
 21) During the course of our examination of the books records of the
 company, carried out in accordance with the generally accepted auditing
 practices in India, and according to the information and explanations
 given to us, we have neither come across any instances of material
 fraud on or by the Company, noticed or reported during the year, nor
 have been informed of such case by the management.
 
                                                     For Rathi & Bangad 
                                                  Chartered Accountants 
                                                [Firm Reg. No. 108702W]
 
 
 Date: 30/05/2014                                      Dilip D.Jain
 Place: Aurangabad                                      Proprietor
                                                       M. No. 044301
Source : Dion Global Solutions Limited
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