Alexander Stamps & Coin Ltd Directors Report.

To the Members of Alexander Stamps and Coin Limited

(Formerly known as Rudraksh Cap-Tech Limited)

Report on the Audit of the Financial Statements

ADVERSE OPINION

We have audited the Standalone financial Statement of Alexander Stamps and Coin Limited (‘the Company) (Formerly known as Rudraksh Cap-Tech Ltd) which comprises the Balance Sheet as at 31st March 2021, and the statement of Profit & Loss, the statement of changes in equity and the statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies and other explanatory information.

In our Opinion and to the best of our information and according to the explanations given to us, because of the significance of the matter discussed in the Basis for Adverse Opinion section of our report, the standalone financial statement do not give a true and fair view in conformity with accounting principles generally accepted in India, of their state of affairs of the standalone financial statement as at 31st March, 2021, of its Profit and Loss, Changes in Equity and the Cashflows for the year then ended.

Basis of Adverse Opinion

1. Revenue from operation and purchase of traded goods:

The Company is in trading business of buying and selling of artistic, aesthetic things, products, drawing, literatures, journals, newspapers and so on, but the majority of the transaction is routed through cash purchase (Purchase of stock in trade) and cash sales (Revenue from operation). We strongly advice management to keep record of identity of all transactions made through cash. We are unable to cross verify said transactions because of lack of availability of records. Below is the statistics of past 4 years revenue form operation assessing the accounting principles used and significant estimates made by Management. We believe that audit evidence obtained by us and other auditors in terms of their reports, is sufficient and appropriate to provide a basis for our adverse opinion.

(Sales)and holding of stock in trade (Closing Stock) which also shows tremendous decrease in sales and huge building up of a stock in trade.

Sr.no Years Sales in Rs. Closing Stock in Rs.
1. 2016-17 8,40,59,150 2,39,07,576
2. 2017-18 5,06,38,090 14,37,19,179
3. 2018-19 1,03,20,851 14,92,81,826
4. 2019-20 43,63,167 14,92,81,826
5. 2020-21 75,99,204 15,38,46,806

Company is keeping huge amount of stock and of a special nature, we strongly believe that management should keep perfect record of stock. Furthermore, company has not taken insurance of the stock in trade which also creates huge risk on company.

Looking at the working pattern, margins earned and assets held by the company, we strongly recommended management to give more focus on health of the companys performance and internal control of the company.

2. Note No: 4: - Loans & Advances: -

(Overstatement of Loans & Advances and Non-Provision for Bad & Doubtful Loans and Advances Non-Compliance of IND AS 37)- The balances under the head “loans and advances” amounting to Rs. 13.30 lakhs are without Balance Confirmation. In Absence of Confirmation, the Balances might be Overstated and provision for Bad and Doubtful is required which has not been provided by the Company. So financial statements do not give true and fair view with regards to financial impact of such Loans & Advances given. Furthermore, Balance under the head “other non-current assets” with advance to vendor amounting to Rs.5.02 lakhs is also long outstanding for which no confirmation has been received.

Mr. Anirudh Sethi who is director of the company has taken Rs.19.33 lakhs (Including entries of Unamortized cost as per IND AS) outstanding as on 31.03.2021 as Loans & Advances from company which is again violation of provisions of Sec 185 of Companies Act 2013.

3. Note No: 12 Borrowings:

Absence of balance confirmation-Company is carrying very old balance of unsecured loan. Company has not provided balance confirmation of loan received from Main Dhal Mills pvt ltd amounting to Rs. 4,68,889.00/-, Linkwise Exports Pvt Ltd amounting to Rs. 18,75,543.00/- and for Loan from retired director amounting to Rs. 11,92,769/-. so, we are unable to comment upon the same, so financial statements does not give true and fair view with regards to borrowings.

4. Details of statutory dues:-

The details regarding disputed statutory dues in respect of TDS, Advance Tax, VAT, Sales Tax, GST, PF, ESIC and other taxes has not been provided to us and hence we are unable to comment upon the adequacy of provision and its impact.

5. Non Compliance of SH-7:-

Non-Compliance of requirement of ROC Authorized share capital of the company is Rs. 7,20,00,000/- whereas paid-up share capital of the company is Rs. 8,64,00,000/- hence company has not increase its authorized share capital. Company has not provided for interest/penalty for the said default in the financial statement. Company has failed to file SH-7 form also with ROC resulting into non-payment of ROC fees also to increase authorized capital.

6. Violation of Sec 73: -

Company has received Rs.60,00,000.00 from 3 individuals and shown under application for share capital pending allotment. Out of the said amount, Rs.30,00,000 has been received in Dec-2018 and Rs. 30,00,000 has been received in Jan-2019. Company has neither allotted the shares nor refunded the amount back to them. Company has not followed any of the procedure prescribed under section 62 and Sec 42 of Companies Act, 2013 read with Rule 13. This is straight violation of Sec 73 of Companies Act, 2013.

7. Notes No:7 Cash-in-Hand

During our audit of books of accounts, we have notice that cash-in-hand as per balance as on 31.03.2021 is Rs.29.44 lakhs which was not provided for verification to us. Looking at the business turnover, keeping such huge cash on hand is not preferable.

8. Related party Transactions discloser: -

During our audit, we have observed below mentioned related parties Transactions.

Sr.No Name of Related Parties Nature of Transaction Amount in Rs. Relationship of the party to the company
1. AnirudhSethi Purchase of Stock# 24,50,000.00 Director of the company
2. Vandana A Sethi Advance from Creditors 18,00,000.00 Relative of Director of Company

# Company has purchased goods (Stock in trade) worth Rs.24.50 lakhs from director of the company but we have not been provided with any of the confirmation w.r.t independent valuation of the transaction to determine arams length price.

9. Internal Control: -

There is a lack of internal control over financial reporting which is serious matter of concern as a statutory auditor of the company.

We conducted our audit in accordance with Standards of Auditing (SAs) specified under section 143(10) of the companies Act, 2013. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statement sections our report. We are Independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountant of India together with ethical requirements that are relevant to our audit of the financial statements under the provisions of the Companies Act, 2013 and the Rules there under, and we have fulfilled out other Ethical responsibilities in accordance with the requirements and Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our Opinion.

Responsibilities of the Management and Those Charged with Governance for the Standalone Financial Statement.

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 and presentation of these financial statements that give a true and fair view of the financial position, financial performance, changes in equity 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions 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.

In Preparing the financial statements, management is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, mattes related to going concern and using the going concern basis of accounting unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Auditors Responsibilities for the Audit of the Standalone Financial Statement

Our Objective are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.

As a part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

Identify and assess the risks of material misstatement of the Standalone Financial Statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section 143(3)(i) of the Companies Act, 2013, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place and the operating effectiveness of such controls;

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Companys ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the Standalone Financial Statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern;

• Evaluate the overall presentation, structure and content of the Standalone Financial Statements, including the disclosures, and whether the Standalone Financial Statements represent the underlying transactions and events in a manner that achieves fair presentation;

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit;

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards;

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the Standalone Financial Statements of the current period and are therefore the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

Report on other legal and Regulatory Requirement

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 Companies Act, 2013, we give in the “Annexure I” a statement on the matters specified in paragraphs 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 not been kept by the Company so far as appears from our examination of those books;

c) The Balance Sheet, and 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), 2014.

e) On the basis of written representations received from the directors for March 31, 2020, and on record by the Board of Directors, none of the directors is disqualified as on March 31, 2020, 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 of such controls, refer to our separate report in “Annexure II” to this report; and

g) With respect to the matters to be included in the Auditors 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 explanation given to us:

i. The Company has not disclosed the impact of pending litigation and taxation dues on its financial position in its financial Statements;

ii. The Company did not have any long-term contract including derivative contract for which there are any material foreseeable losses.

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

Annexure I to the Independent Auditors Report

Referred to in Paragraph 1 under the heading “Report on other regulatory requirements” of our report of even date

FIXED ASSETS: -

a) As informed to us, the Company has only one fixed assets i.e. LAPTOP and company has prepare Fixed Assets registered showing full particulars including quantitative details and situation of fixed assets.

b) As explained to us, fixed assets, according to the practice of the Company Fixed Assets are physically verified by the management at reasonable intervals and no material discrepancy has been noticed. Based on our audit procedures performed for the purpose of reporting the true and fair view of the Ind AS financial Statements and according to information and explanations given by the management, company is having only Laptop/computer which is available with the company which is reported in note-3 Property, plant & equipment.

c) According to the information and explanations given to us, the records examined by us and based on the examination of the invoice provided to us, we report that, the title, are held in the name of the Company as at the balance sheet date.

INVENTORY: -

a) As informed to us, the Inventory was physical verified by the management at reasonable intervals during the year. In our opinion, having regard to nature and size of the business, there is lack of internal control regards to possession of stock.

b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management were not reasonable and not adequate in relation to the size of the company and nature of its business.

c) In our opinion and according to the information and explanations given to us, the Company has not maintained proper records of inventory. Further company has not maintained proper record w.r.t. Movement of stock and its valuation.

LOANS GIVEN BY THE COMPANY: -

According to the information and explanations given to us, the Company has granted unsecured loans to companies, firms, Limited Liability Partnerships or other parties but company not maintained register under section 189 of the Companies Act.

Company has not provided complete list and balance confirmation. Loans and advances given by the company are prejudicial to the interest of the company as given without the repayment schedule and without proper security. We are unable to comment on overdue amount above 90 days in absence of repayment schedule and company has not taken any steps to recover the same.

According to the information and explanations given to us, the Company has taken unsecured loan but company has not maintained proper records.

LOAN TO DIRECTORS AND INVESTMENT BY THE COMPANY: -

In our opinion and according to the information and explanations given to us, Provision of section 185 of the Act in respect of loans, investment, guarantee and security made have not been complied with by the company. Loan given to director Mr. Anirudh Sethi amounting to Rs. 19.33 lakhs which fall under contravention of section 185 of companies Act.

DEPOSITS:-

According to the Information and Explanation given to us, the Company has accepted deposit in form of unsecured loan Rs.4,68,889 from Main Dhal Mills Pvt Ltd, Rs.18,75,543 from Linkwise Exports Pvt Ltd and Rs.11,92,769 from director.

COST RECORD: -

As per the information and explanation provided by us to the management and to the best of our knowledge and as explained, the Central Government has not specified the maintenance of cost records under clause 148 (1) of the Act, for the services of the Company.

STATUTORY DUES:-

There are undisputed amounts payable in respect of Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise Duty, Custom Duty, Cess and other material statutory dues in arrears as at 31st March, 2021 for a period of more than six months for the date they become payable.

According to the information, explanation and records verified by us the Company has generally been regular in depositing goods and services Tax but company has not paid Income Tax, Service Tax, Cess, local authority Taxes and other material statutory dues applicable to it with the appropriate authorities.

REPAYMENT OF LOANS:-

The Company has neither issued debentures nor availed any loan from Banks, financial institutions or government. Therefore, the provision of clause 3(viii) of the order are not applicable the company.

THE UTILIZATION OF FUNDS:-

Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanation given by the management, the company has not raised any fund by way of initial public offer or further public offer including debt instrument.

REPORTING OF FRAUD: -

Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanation given by the management, we report that no fraud on or by the management has been noticed or reported during the year.

APPROVAL OF MANAGERIAL REMUNERATION: -

Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanation given by the management, We report that the managerial remuneration has been paid if any or provided in accordance with the requisite approvals mandated by the provision of section 197 read with schedule V to the Act.

NIDHI COMPANY: -

In our opinion, the Company is not a Nidhi company. Therefore, the provision of clause 3 (xiii) of the order are not applicable to the company and hence not commented upon.

RELATED PARTY TRANSACTIONS: -

Based upon the audit procedures performed for the purpose of reporting the ture and Fair view of the financial statements and according to the information and explanations given by the management, transaction with the related parties except below are in compliance with section 177 and 188 of the companies Act, 2013 where applicable and the details have been disclosed in the notes to the financial statements, are required by the applicable accounting standards.

Sr. No. Name of Related Parties Nature of Transaction Amount in Rs.

Relationship of the party to the company

1. Anirudh Sethi Purchase of Stock in trade 24,50,000.00 Director of the company
2. Vandana A Sethi Advance from Creditors 18,00,000.00 Relative of Director of Company

PRIVATE PLACEMENT OF PREFERENTIAL ISSUES: -

According to the information and explanations given to us and on overall examination of the balance sheet, the company has made preferential allotment of equity shares amounting to Rs.9,07,50,000 by way of shares issued for consideration other than cash by way of preferential allotment in the financial year 2017-18.

Company has received Rs.60,00,000.00 from 3 individuals and shown under preferential issue application for share capital pending allotment. Out of the said amount, Rs.30,00,000 has been received in Dec-2018 and Rs.30,00,000 has been received in Jan-2019. Company has neither allotted the shares nor refunded the amount back to them. Company has not followed any of the procedure prescribed under section 62 and Sec 42 of Companies Act, 2013 read with Rule 13. This is straight violation of Sec 73 of Companies Act, 2013.

NON-CASH TRANSACTIONS: -

Based on our audit procedures performed for the purpose of reporting the true and fair view of the financial statements and according to the information and explanation given by the management, the Company has not entered into any non-cash transaction with directors or persons connected with him.

REGISTRATION UNDER RBI ACT: -

According to information and explanation given us, the provision of section of section 45-IA of the Reserve Bank of India Act, 1934 are not applicable to the company.

Annexure II to the Independent 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 Alexander Stamps and Coin Limited (‘the company) (Formerly known as Rudraksh Cap-Tech Ltd.) as of 31st March 2021 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 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.

Adverse Opinion

In our opinion, the Company has, an inadequate internal financial controls system over financial reporting and internal financial controls over financial reporting were operating less than effectively as at 31 March 2021, 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 strongly suggest companys management to have independent internal inspection department along with internal audit system from independent agency to improve transparency.

For Sheetal Samriya & Associates
Chartered Accountants,
Firm Registration No.: 011478C
Sd/-
CA Ankit Agrawal
(Partner)
Membership No.: 173127
UDIN: 21173127AAAACU1055
Place: Vadodara
Date: 25.06.2021