APCOTEX Auditors Report

Report on the Financial Statements


We have audited the accompanying financial statements of APCOTEX INDUSTRIES LIMITED (“the Company”), which comprises the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, the 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 The Company''''s Board of Directors is responsible for the matters 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 principles generally accepted in India, including the Accounting Standards specified under 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 provision 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.


Auditor’s 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 thereunder.


We 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 the 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 financial control relevant to the Company''''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company''''s Directors, 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 on the financial statements.


Opinion


In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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, of the state of affairs of the Company as at March 31, 2017, and its profit and its cash flows for the year ended on that date. Emphasis of matter


Note 43 to the financial Statement, on October 27, 2016 the Honorable High Court of Judicature at Bombay has approved a scheme of amalgamation of Apcotex Solutions India Private Limited (ASIPL), the wholly owned subsidiary company, with the Company with effect from March 31, 2016. As per the scheme of Amalgamation the Company shall account for amalgamation of ASIPL in its books of accounts with effect from the appointed date (i.e. March 31, 2016) as per the “Purchase Method”, as prescribed in Accounting Standard-14 “Accounting for Amalgamation” issued by the Institute of Chartered Accountants of India.


Accordingly, all the assets and liabilities being the net assets excluding reserves of ASIPL have been recorded by the Company at their respective fair values, as decided by the Board of Directors of the Company as on March 31, 2016 and the Investment held by the Company in Apcotex Solutions India Private Limited amounting to Rs. 3016.50 lakh stands cancelled and excess of net assets of ASIPL amounting to Rs. 7402.48 lakh has been recorded as Capital Reserve.


Our opinion is not qualified in respect of this matter.


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 of the Act, we give in the “Annexure A”, a statement on the matters specified in the paragraph 3 and 4 of the Order.


2. As required by Section 143 (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 purposes of our audit.


b) In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books.


c) The Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.


d) In our opinion, 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 the written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164 (2) of the Act.


f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness o f such controls, refer to our separate report in “Annexure B”; and


g) With respect to the 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 to the best of our information and according to the explanations given to us:


i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements - Refer Note 26 to the financial statements.


ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contract including derivative contracts.


iii. There are no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.


iv. The Company has provided requisite disclosures in the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8th November, 2016 to 30th December, 2016. Based on audit procedures and relying on the management representation we report that the disclosures are in accordance with books of account maintained by the Company and as produced to us by the Management -Refer Note 42 to the financial statements.


Referred to in in Para 1 ''''Report on Other Legal and Regulatory Requirements'''' in our Independent Auditors'''' Report to the members of the Company on the financial statements for the year ended March 31, 2017.


Statement on Matters specified in paragraphs 3 & 4 of the Companies (Auditor''''s Report) Order, 2016:


i. (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.


(b) As explained to us, the Company has a programme for physical verification of fixed assets at periodic intervals. In our opinion, the period of verification is reasonable having regard to the size of the company and nature of its assets. The discrepancies reported on such verification were not material and have been properly dealt with in the books of account.


(c) According to the information and explanations given to us and on the basis of examination of the records of the company, the title deeds of immovable properties are held in the name of the Company, except:






































Sr.


No.



Total No. of Cases



Type of Assets



Gross Block as at March 31, 2017(Amt (Rs.))



Net Block as at March 31, 2017 (Amt (Rs.))



Remarks



1



1



Lease Hold Land



39,493,120



35,439,084



The Company is in the process of transferring the title deeds.



2



2



Lease Hold Land



21,193,800



18,918,025



It is in the name of erstwhile company i.e. Eliokem India Private Limited. The Company is in the process of transferring the title deeds.



3



1



Buildings



6,079,825



4,519,599



It is in the name of erstwhile company i.e. Eliokem India Private Limited. The Company is in the process of transferring the title deeds.



ii. In our opinion and according to the information and explanations given to us, physical verification of inventory has been conducted at reasonable intervals by the management and no material discrepancies were noticed on physical verification and the same have been properly dealt with in the books of account.


iii. The Company has not granted any loans, secured or unsecured, to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Act. Therefore, the provisions of sub-clause (a), (b) and (c) of paragraph 3(iii) of the Order are not applicable.


iv. In our opinion and according to the information and explanations given to us, the Company has not advanced any loans to the parties covered under section 185 of the Act. The Company has not given any loans and guarantees but has made investments in the securities of other body corporate within the limits specified by section 186 of the Act.


v. In our opinion and according to the information and explanations given to us, the Company has not accepted any Deposits from the public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the Rules framed thereunder are not applicable.


vi. In our opinion and according to information and explanations given us the maintenance of cost records under sub section (1) of Section 148 of the Act is not applicable to the Company under the Company (Cost Record and Audit) Rules, 2014.


vii. (a) According to the information and explanations given to us and the records examined by us, the Company is generally regular in depositing undisputed statutory dues including Provident Fund, Employees'''' State Insurance, Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and other material statutory dues with the appropriate authorities. According to the information and explanations given to us, there are no arrears of outstanding statutory dues in respect of above as on the last day of the financial year for a period of more than six months from the date they became payable.


(b) According to the information and explanation given to us and the records examined by us, there are no material dues of Income Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise and Value added tax outstanding on account of any dispute except:






































































Sr.


No.



Name of the Statute



Nature of Dues



Amount (Rs. In lakh)



Period to which the amount relates



Forum where dispute is pending



1



Income Tax Act, 1961



Income Tax



3.75



2002-03



Commissioner of Income Tax (appeals)



2



Income Tax Act, 1961



Income Tax



8.00



2007-08



Commissioner of Income Tax (appeals



3



Income Tax Act, 1961



Income Tax



189.78



2009-10



Income Tax Appellant Tribunal



4



Income Tax Act, 1961



Income Tax



147.06



2010-11



Commissioner of Income Tax (appeals)



5



Income Tax Act, 1961



Income Tax



455.39



2011-12



Commissioner of Income Tax (appeals)



7



Income Tax Act, 1961



Income Tax



94.24



2012-13



Commissioner of Income Tax (appeals)



8



Income Tax Act, 1961



Income Tax



23.75



2013-14



Commissioner of Income Tax (appeals)
























































































9



Customs Act



Customs Duty



284.18



August 2000 to July 2004



Supreme Court of India



10



Central Excise Act & Service Tax



Excise Duty



1.59



2009-10 to 2011-12



Deputy Commissioner Central Excise and Service Tax



11



Central Excise Act & Service Tax



Service Tax



0.13



2007-08



The Customs, Excise and Service Tax Appellate Tribunal



12



Central Excise Act & Service Tax



Service Tax



11.24



2005-06 to 2009-10



The Customs, Excise and Service Tax Appellate Tribunal



13



Central Excise Act & Service Tax



Service Tax



81.80



2010-11 to 2014-15



The Customs, Excise and Service Tax Appellate Tribunal



14



Central Excise Act and Service Tax



Service Tax



17.50



Nov 2013- Nov 2014



Commissioner of Central Excise and Service Tax ( Appeals)



15



Central Excise Act & Service Tax



Service Tax



8.70



April 2015 to December 2015



Commissioner of Central Excise and Service Tax ( Appeals)



16



Central Excise Act and Service Tax



Service Tax



164.95



September 2012-Jan 2016



Additional Commissioner of Central Excise and Customs



17



Maharashtra Value Added Tax Act



Value Added Tax



1.70



2006-07



Bombay High Court



18



Maharashtra Value Added Tax Act



Value Added Tax



73.49



2007-08 to 2011-12



Joint Commissioner of Sale Tax( Appeals)



viii. According to information and explanation given to us and based on examination of the records, the Company has not defaulted in repayment of loans or borrowings to bank. The Company does not have any dues to financial institution, government or debenture holders.


ix. The Company has not raised money through initial public offer or further public offer (including debt instruments). In our opinion and according to the information and explanations given to us and based on the documents and records examined by us on an overall basis, the term loans obtained by the Company were applied for the purpose for which the loans were obtained.


x. During the course of our examination of the books of account and records of the Company, and according to the information and explanation given to us and representations made by the Management, no material fraud by or on the Company by its officers or employees, has been noticed or reported during the year.


xi. According to the information and explanation given to us and based on our examination of the records of the Company, the Company has paid/provided for managerial remuneration in accordance with requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.


xii. In our opinion and according to the information and explanation given to us, the Company is not a Nidhi Company. Accordingly, provisions of paragraph 3(xii) of the Order are not applicable.


xiii. According to the information and explanation given to us and based on our examination of the records of the Company, transactions with related parties are in compliance with sections 177 and 188 of the Act, where applicable, and details of such transactions have been disclosed in the financial statements as required by the applicable accounting standards.


xiv. According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.


xv. According to the information and explanation given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with the directors or persons connected with him. Hence the provisions of Section 192 of the Act are not applicable.


xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934, hence the provisions of paragraph 3 (xvi) of the Order are not applicable.


For KALYANIWALLA & MISTRY LLP


CHARTERED ACCOUNTANTS


Firm Reg.No. 104607W/W100166


Ermin K. Irani


Partner


Membership No.: 35646


Place: Mumbai


Dated: May 05, 2017

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