To the Members of Alchemist Realty Limited.
Report on the Financial Statements as per Ind AS
We have audited the accompanying Standalone Financial Statements of Alchemist Realty
Limited ("the Company"), which comprise the Balance Sheet as at March
31,2018, 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.
Managements Responsibility for the Financial Statements
The Companys Board of Directors is responsible for the matters stated 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 Indian Accounting
Standard Ind AS specified under Section 133 of the Act, read with the provision of the
Companies (Accounts) Rules, 2014. This responsibility 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; making
judgments 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
presentations of the financial statements that give a true and fair view and free from
material misstatement, whether due to fraud or error.
Auditors Responsibility
Our responsibility is to express an opinion on these Standalone 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 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 auditors
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 Companys 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 entitys 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 on the Standalone financial statement.
Basis of Qualified Opinion
a) Attention is invited to Note No 10 of the financial statements Trade receivables
amounting to Rs. 15205.27 Lakhs out of which export debtors for merchant trade transaction
are Rs. 14902.25 Lakhs and other receivables are Rs. 303.00 Lakhs which are outstanding
for more than six months from the date they become due from payment. Credit was extended
for export sales in the normal course of the business, however it apparently got stuck.
The Company has initiated legal recourse against the defaulting customers and is regularly
following up on the same. The management is confident of recovering all such dues and
hence no provision is considered necessary.
"These are long outstanding and we are unable to comment of the recoverability of
the same for which no provision has been created for doubtful trade receivables."
The loss to that extent is under stated and similarly the receivables, the effect
however could not be quantified.
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 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 generally accepted in India, of the state of
affairs of the Company as at March 31,2018 and its loss and its Cash Flow for the year
ended on that date.
Emphasis of the Matter
a. Attention is invited to Note No 5,5.1 and 5.2 of the financial statements wherein
amount of Rs. 6089.62 Lakhs has been shown under the head of long term advances, "out
of which Rs. 1249.40 Lakhs has been given to various parties and the matter is Sub-Judice
in various courts for acquiring properties and advances amounting to Rs. 1842.97 Lakhs
given to various other parties but the sale deeds for properties has not been executed so
far in favor of the Company". These advances have been considered as good by the
management of the Company. It is relevant to point out that these are material advances
and are pending since long, more than three years, and the management has not made any
provision for the same.
Attention is also invited to Note No 5.3 of the financial statements for amount shown
under the head "long term advance Rs. 1887.92 Lakhs given to various parties
on account of franchisee fee and other expenses for acquiring rights of Realogy Corpn.
Inc. USA for their brand (Century 21) which is recoverable from its Subsidiary Century 21
Properties (India) Pvt. Ltd as and when the rights will be transferred to it". It is
relevant to note that the amount has been advanced since long and rights have not been
transferred so far. b. We draw attention to Note 5.4, the Company has advanced as loan a
sum of Rs. 952.83 Lakhs to two parties as interest free unsecured loan, the same is in
violation of Sub Section Rs. of Section 186 of the Companies Act 2013. This Sub Section
requires the "No loans shall be given under this section at a rate lower than the
prevailing yield of one year, three year, five year or ten year Government Security
closest to the tenure of the loan.
Our opinion is not modified 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 the paragraph
3 and 4 of the Order, to the extent applicable.
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 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 above, in our opinion, the aforesaid standalone financial statements comply with
the Indian Accounting Standards (Ind As) specified under Section 133 of the Companies Act,
2013, read with Rule Rs. of the Companies (Accounts) Rules, 2014;
e) The matters described in the basis for Qualified Opinion paragraph and
Emphasis of matter paragraph above, in our opinion, can adversely affect the functioning
of the Company.
f) On the basis of written representations received from the Directors as on March
31,2018, and taken on record by the Board of Directors, none of the Directors is
disqualified as on March 31, 2018, from being appointed as a Director in terms of Section
164(2) of the Companies Act, 2013.
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 control, refer to our
separate report in Annexure "B and
i) With respect to the other matters included in the Auditors Report in accordance
with Rule 11 of Companies (Audit and Auditors) Rules, 2014 in our opinion and to the best
of our information and according to explanations given to us:
i. The Company has not disclosed the impact of pending litigations in its financial
statements with respect to suits on or by the Company in respect of suits filed by the
company for acquisition of properties or recovery of advances as referred to in Note 5.1
and 5.2 of the 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 no amounts which required to be transferred, to the Investor Education and
Protection Fund by the Company.
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FOR SOIN ASSOCIATES |
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CHARTERED ACCOUNTANTS |
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Firm Regn. No. 010637N |
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Sd /- |
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Paramjit Singh |
| Place : New Delhi |
Prop. |
| Dated : 21/05/2018 |
Membership No.086047 |
Annexure- A to the Independent Auditors Report
Referred to in paragraph 1 under ‘Report on other Legal and Regulatory
Requirements section of our report of even date.
We report that:
1. (a) The Company has maintained proper records showing full particulars including
quantitative details and situation of its fixed assets.
(b) As explained to us, fixed assets have been physically verified by the management at
reasonable intervals; no material discrepancies were noticed on such verification.
(c) In our opinion and according to the information and explanations given to us, the
Company does not have any immovable properties in its name. Therefore para 3 (1) (c) are
not applicable
2. As explained to us, inventories have been physically verified during the year by the
management at reasonable intervals and no material discrepancy was noticed on physical
verification of stocks by the management as compared to book records.
3. According to information and explanations given to us, the Company has granted
unsecured loan to two Subsidiary Company, i.e. Alchemist Hill Resorts Private Limited and
Century 21 Properties India Private Limited (party covered under Section 189 of the
companies Act. 2013) amounting to Rs. 952.83 Lakhs.
a) The terms and conditions on which these loans have been given appears to be
prejudicial to the interest of the Company as the loans are not carrying any interest.
b) No Schedule for repayment of principal and interest has been stipulated, however it
has been informed to us that these loans have been given in accordance with the agreement,
which intra-alia provides these loans are interest fee in lieu of option to convert them
into equity shares at valuations which will compensate the Company for the interest
component. In such circumstances we are unable to comment whether the receipt of principle
and interest is regular.
c) We are unable to comment on the overdue amount of principle and interest more than
ninety days as loans have been given to companies on mutual inter-alia agreements as
informed to us, however necessary documents, terms and conditions on which loans have been
given have not been made available to us.
4. The Company has not given any loans to Directors or to any other persons in whom the
Director is interested or given any guarantee or provided any security in connection with
any loan taken by him or such person as covered under Section 185 of the Companies act
2013, however the Company has given loan to Subsidiaries a sum of Rs. 952.83 Lakhs as
interest free unsecured loan, the same is in violation of Sub Section (7) of Section 186
of the Companies Act 2013.
5. The Company has not accepted deposits. Hence the provisions of Section 73 to 76 or
any other relevant provisions of the Act and the rules framed there under are not
applicable to the Company.
6. The Company is not required to maintain cost records as specified by the Central
Government under Sub Section (1) of Section 148 of the Act. Therefore, the provisions of
para 3(vi) of the Order is not applicable to the Company.
7. (a) Based on our audit procedures and on the information and explanations given by
the management, and on the basis of our examination of records of the Company amount
deducted/accrued in the books of accounts in respect of undisputed statutory dues
including Provident Fund, Employees State Insurance, Income-tax, Sales- tax, Service Tax,
Custom Duty, Excise Duty, Value Added Tax, Cess and any other statutory dues, required to
be deposited have been deposited with some delays.
According to the information and explanation given to us, no undisputed amount payable
in respect of provident fund, income tax, service tax, cess of other material dues we in
arrears as at 31st March 2018 for a period of more than six months from the
date they become payable.
(b) Based on our audit procedures and on the information and explanations given by the
management, there are no dues outstanding in respect of Income Tax, Sales Tax, Service
Tax, Customs Duty, Excise Duty, Value Added Tax, Cess or any other Statutory dues, to be
deposited on account of any dispute.
8. The Company has not obtained loans during the year and neither any dues/loans were
outstanding from financial institution, bank, Government or debenture holders, therefore,
the provisions of para 3(viii) of the Order is not applicable to the Company.
9. The Company did not raise any money by way of initial public offer or further public
offer (including debt instruments) and term loans during the year, therefore, the
provisions of para 3(ix) of the Order is not applicable to the Company.
10. According to the information and explanations given to us, no fraud by the Company
or on the Company by its officers or employees has been noticed or reported during the
year.
11. The Company has paid any managerial remuneration during the financial year ending
31st March 2018, however the Company has sought the necessary approval and
mandated as per the provisions of Section 197 read with schedule V of the Companies Act
2013.
12. In our opinion and according to the information and explanations given to us, the
Company is not a Nidhi company, therefore, the provisions of para 3(xii) of the Order is
not applicable to the Company.
13. According to the information and explanations given to us and based on our
examination of the records of the Company, transactions with the 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.
14. According to the information and explanations 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.
15. According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not entered into non-cash
transactions with Directors or persons connected with him, therefore, the provisions of
para 3(xv) of the Order is not applicable to the Company.
16. 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 SOIN ASSOCIATES |
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CHARTERED ACCOUNTANTS |
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Firm Regn. No. 010637N |
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Sd/- |
|
Paramjit Singh |
| Place : New Delhi |
Prop. |
| Dated : 21/05/2018 |
Membership No.086047 |
Annexure - B to the Auditors Report
Report on the Internal Financial Controls 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 Alchemist
Realty Limited ("the Company") as of 31st March, 2018 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 (‘ICAI). 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 auditors judgment, 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 authorisations of
management and Directors of the Company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised 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.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at 31st March, 2018,
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 ICAI.
|
FOR SOIN ASSOCIATES |
|
CHARTERED ACCOUNTANTS |
|
Firm Regn. No. 010637N |
|
Sd/- |
|
Paramjit Singh |
| Place : New Delhi |
Prop. |
| Dated : 21/05/2018 |
Membership No.086047 |
+91-9892691696
