To the members of APEX BUILDSYS LIMITED Report on the standalone financial statements
We have audited the accompanying standalone financial statements of APEX BUILDSYS LIMITED (the Company) which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year than ended and a summary of significant accounting policies and other explanatory information.
Managements responsibility for the standalone financial statements
The Companys 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 standalone 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 the maintenance of adequate accounting records in accordance with the provision of the Act for safeguarding of the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design, implementation and maintenance of internal financial control, 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 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 auditorsjudgment, 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 Companys preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial controls system over financial reporting and the operating effectiveness of such controls. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Companys 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 qualified audit opinion on the financial statements.
Basis for Qualified Opinion
1. Out of total trade receivables of Rs 12,758.91 lacs as on 31st March 2016, trade receivables for Rs 2,211.67 lacs are outstanding from the period prior to 1st April 2014. No provision has been made for bad or doubtful debts for Rs. 2,211.67 lacs by the Company. In view of the above mentioned facts, the Total Assets of the Company are presently being inflated by the same amount, the Loss for the year and the total accumulated losses of the Company will increase by the same amount.
2. The BSE Limited have levied a penalty of Rs 13.36 lacs for non- approval / publishing / filing of financial results of quarter ended 30th June 2015 and 30th September 2015 on time. No provision has been made for the same as Management expects it to be waived off. In view of the above mentioned facts, the Total liability of the Company are presently being understated by an amount of Rs. 13.36 lacs and as perthe effects of the said treatment, the Loss fortheyear and the total accumulated losses of the Company will increase by the same amount. Further financial results of quarter ended 31st December 2015 was also not-published & filled within the prescribed limit of 45 days, resulting suspension of trading w.e.f 25th February 2016.
3. There is delay in deposit of statutory dues including VAT, Service Tax, Excise & Income Tax, Entertainment Tax, Professional Tax, ESI & Provident Fund etc. and other similar dues and also delay in filing of returns & forms. No provisions have been made for possible interest and Penalty which may be levied due to delay/ non compliances as exact quantification is not possible. The total undisputed amount of statutory dues pertaining to VAT, Service Tax, Excise & Income Tax, Entertainment Tax, Professional Tax, ESI & Provident Fund etc. is Rs. 1,057.89 lacs out of which Rs 904.28 lacs. is outstanding for more than six months as on 31.03.2016.
4. The loans/ credit facilities provided by lenders have been classified as Non-Performing Assets (NPA) by 4 lenders out of 5 lenders as on balance sheet date.
5. The company is in process of complying with the relevant provisions of the Companies Act 2013 & the SEBI Act, 1992, as amended, which were earlier non complied, more particularly with respect to, quorums, meetings of board of directors, various committees, submission and publication of quarterly results, filing of various forms & declarations, compliance with listing regulations etc.
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 matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone 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 ge1nerally accepted in India,
i. in the case of the Balance Sheet, of the state of affairs of the Company as at 31st March, 2016;
ii. in the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and
iii. in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.
Emphasis of Matters
Attention is drawn to the following:
(a) note no. 4(d) of Financial Statements, the loan is secured by first paripassu charge over entire fixed assets other than those exclusively charged and second paripassu charge over current assets both present and future of the company and personal guarantee of Shri H. S. Bharana & corporate guarantee of Era Infra Engineering Limited . NOC from other banks are pending for creation of charge.
Our opinion is not qualified in respect of these matters.
Report on other legal and regulatory requirements
1. As required by the Companies (Auditors 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 paragraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act, we report that:
a) We have sought, except for the possible effect of the matter described in the Basis for Qualified Opinion paragraph above, 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, Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, 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 Cash Flow Statement dealt with by this Report are in agreement with the books of account.
d) Except for the effects ofthe matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid standalone 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) The matter described in the Basis for Qualified Opinion paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.
f) On the basis of written representations received from the directors as on 31 March, 2016, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2016, from being appointed as a director in terms of Section 164(2) of the Act.
g) The qualification relating to the maintenance of accounts and other matters connected therewith are as stated in the Basis for Qualified Opinion paragraph above.
h) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in Annexure B.
i) With respect to the other matters included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditor) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company does not have any pending litigations on its financial position in its financial statements.
ii. The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses.
iii. There were no amounts which required to be transferred to the Investor Education and Protection Fund by the Company.
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For P. C. Bindal & Co. |
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Chartered Accountants |
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FRN:- 003824N |
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(CA. K. C. Gupta) |
| Place: Noida |
Partner |
| Dated : |
Membership No. 088638 |
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT
The Annexure referred to in paragraph 1 under the heading of Report on Other Legal and Regulatory Requirements of our report to the members of ApEX BUlLDSYS LIMITED (the company) for the year Ended on 31 March 2016, we report that:
i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.
(b) According to the information and explanation given to us, fixed assets are physically verified by the management during the year No material discrepancies were noticed on such verification. In our opinion, frequency of physical verification of fixed assets is reasonable.
(c) The title deeds of immoveable properties are held in the name of the company.
ii) As explained to us, the inventories of the company (except Stock in transit) have been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable having regard to the nature of business.
iii) According to the information and explanations given to us, 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 Companies Act 2013. Accordingly Clauses (a), (b) and (c) of sub para iii of paragraph 3 of the order are not applicable.
iv) The company has not given any loans, investments, guarantees, and security hence provisions of section 185 and 186 of the Companies Act, 2013 is not applicable.
v) In our opinion and according to the information and explanations given to us, the company has not accepted any deposits from public to which the directives issued by Reserve Bank of India and provisions of sections 73 to 76 of the Companies Act, 2013, including rules framed there under, apply. Further, no order has been passed by the Company Law Board or National Company Law Tribunal or Reserve Bank of India or any other tribunal.
vi) We have broadly reviewed the books of accounts maintained by the Company pursuant to the Rules made by the Central Government regarding the maintenance of Cost Records under clause of sub section (1) of section 148 of the Companies Act, 2013 and are of the opinion that prima facie, the prescribed accounts and records have been maintained. We have however not made a detailed examination of the records with a view to determine whether they are accurate or complete.
vii) (a) According to the information and explanations given to us and according to the books and records produced before us, the company is not regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees state insurance, income-tax, sales-tax, wealth tax, service tax, duty of customs, duty of excise, value added tax, cess and any other statutory dues with the appropriate authority, as applicable to it, the following arrears of outstanding statutory dues appearing as at year end for a period of more than six months from the date they became payable:
| Particulars |
Amount (Rs. Lacs) |
| Liability Under various Acts |
|
| Income Tax Act, 1961 (TDS) |
136.31 |
| Employees Provident Fund Act |
73.14 |
| Employee State Insurance Act |
17.03 |
| Finance Act, 1994 (Service Tax) |
346.14 |
| VAT/WCT under various state Acts |
319.96 |
| Professional Tax under various state Acts |
10.32 |
| Entertainment Tax |
1.38 |
(b) According to the information and explanations given to us, there are no dues of income tax or sales tax or wealth tax or service tax or duty of customs or duty of excise or value added tax or cess which have not been deposited on account of any dispute.
viii) In our opinion and according to information and explanations given to us, There were no dues to debenture holders during the year. The Company has defaulted in repayment of dues to financial institutions and banks during the year. The details of defaults are given hereunder:
| Particulars |
Amount (Rs. Lacs) |
Period of Default (Days) |
| Interest on Bank / |
392.55 |
01-60 Days |
| Institution Term Loan |
405.74 |
61-120 Days |
|
310.99 |
121-180 Days |
|
281.94 |
181-240 Days |
|
295.44 |
241-300 Days |
|
283.29 |
301-365 Days |
| Principal on Term Loans from Banks |
3,332.60 |
365 Days & above |
ix) During the year the company has not raised moneys by way of initial public offer or further public offer (including debt instrument) and term loans.
x) According to the information and explanations given to us, no fraud by the company or any fraud on the company by its officers or employees has been noticed or reported during the course of our audit that causes the financial statements to be materially misstated.
xi) The Managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act.
xii) The company is not a Nidhi Company hence this clause is not applicable.
xiii) Based upon the audit procedures performed and according to the information and explanations given to us, All transactions with related parties are in compliance with sections 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the Financial statements etc. as required by the applicable accounting standards.
xiv) The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review.
xv) The company has not entered into non-cash transactions with directors or persons connected with him. Accordingly the provisions of section 192 of Companies Act, 2013 is not applicable.
xvi) The company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934.
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For P. C. Bindal & Co. |
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Chartered Accountants |
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FRN:- 003824N |
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(CA. K. C. Gupta) |
| Place: Noida |
Partner |
| Dated : |
Membership No. 088638 |
Annexure B to the Independent Auditors Report(Referred to in paragraph 1 (h), relating to Report on Internal Financial Controls, under the heading of Report on Other Legal and Regulatory Requirements of our report)
Report on the Internal Financial Controls over financial reporting under Clause (i) of sub-section 3 of Section 143 of the Companies Act, 2013 (the Act)
We have audited the internal financial controls over financial reporting of Apex Buildsys Limited. (the Company) as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the Guidance Note) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditorsjudgement, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A companys internal financial control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Qualified Opinion
According to the information and explanations given to us and based on our audit, the following material weaknesses have been identified as at March 31, 2016:
a) The Company did not have an appropriate internal control system for credit evaluation and establishing customer credit limits for sales, which could potentially result in the Company recognizing revenue without establishing reasonable certainty of ultimate collection.
b) The Company did not have an appropriate internal control system for reconciliation and deposition of applicable taxes and returns, which could potentially result as extra financial burden & departmental litigations.
A material weakness is a deficiency, or a combination of deficiencies, in internal financial control over financial reporting, such that there is a reasonable possibility that a material misstatement of the companys annual or interim financial statements will not be prevented or detected on a timely basis.
In our opinion, except for the effects of the material weaknesses described above on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 31, 2016, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.
We have considered the material weaknesses identified and reported above in determining the nature, timing, and extent of audit tests applied in our audit of the March 31, 2016 standalone financial statements of the Company, and these material weaknesses do not affect our opinion on the standalone financial statements of the Company.
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For P. C. Bindal & Co. |
|
Chartered Accountants |
|
FRN:- 003824N |
|
(CA. K. C. Gupta) |
| Place: Noida |
Partner |
| Dated : |
Membership No. 088638 |
+91-9892691696
