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Alchemist Ltd.

BSE: 526707 Sector: Others
NSE: ALCHEM ISIN Code: INE964B01033
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OPEN 0.63
PREVIOUS CLOSE 0.66
VOLUME 1
52-Week high 2.20
52-Week low 0.61
P/E 1.80
Mkt Cap.(Rs cr) 1
Buy Price 0.64
Buy Qty 1500.00
Sell Price 0.61
Sell Qty 644.00
OPEN 0.63
CLOSE 0.66
VOLUME 1
52-Week high 2.20
52-Week low 0.61
P/E 1.80
Mkt Cap.(Rs cr) 1
Buy Price 0.64
Buy Qty 1500.00
Sell Price 0.61
Sell Qty 644.00

Alchemist Ltd. (ALCHEM) - Auditors Report

Company auditors report

To the Members of Alchemist Limited

Report on the Audit of Standalone Financial Statements

Qualified Opinion

We have audited the accompanying standalone financial statements of Alchemist Limited("the Company") which comprise the Balance Sheet as at 31st March2019 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Cash Flows and the Statement of Changes in Equity for the year then endedand a summary of the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion section of our report the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (‘Act’) in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India including Indian Accounting Standards (‘Ind AS’)specified under section 133 of the Act of the state of affairs (financial position) ofthe Company as at 31st March 2019 and its loss (financial performanceincluding other comprehensive income) its cash flows and the changes in equity for theyear ended on that date.

Basis for Qualified Opinion

a. Attention is invited to note no. 43 to the standalone financial statements whichstates that "The Company extends credit from time to time as per market practices. Inrespect of export receivables’ amounting to Rs. 46442.79 Lakhs credit was extendedfor export sales in the normal course of the business however it apparently got stuck.Though the Company is regularly following up on the same has initiated legal recourse andis hopeful of recovering such amount still considering the principal of conservatism theCompany had made a provision for expected credit loss allowance @ 10% of the outstandingexport receivables amounting to Rs. 4644.28 Lakhs and has not recognised unrealisedforeign exchange gain/loss on such export receivable and related trade payable during thefinancial year 2018-19. Hence forth the Company shall not be accounting for theunrealised foreign exchange loss on such export receivable and related trade payables andthe same will only be accounted for on actual realisation/payment".

Such export receivables are outstanding for more than three years as at the year enddate; provision @ 10% is made against such doubtful trade receivables. Since the actualrealisation of such doubtful export receivable cannot be ascertained we are unable tocomment on the adequacy of the provision of excepted credit loss made by the Company.

In the absence of the information on record the consequential impact if any on thestandalone financial statements is not ascertainable.

Though the Company admits that the export receivable is doubtful of recovery and hasmade partial provision on such export receivable still such export receivable and relatedtrade payable stand in the books hence require recognition of unrealised foreign exchangegain/loss as per the provisions of Ind AS 21 The Effects of Changes in Foreign ExchangeRates. Accordingly the loss is overstated by Rs. 2242.60 Lakhs for the year ended 31stMarch 2019 and accordingly the trade receivables and trade payable are understated by Rs.3054.51 Lakhs and Rs. 811.91 Lakhs respectively as at the year ended 31stMarch 2019.

b. Attention is invited to note no. 60 to the standalone financial statements whichstates that "The working capital limits of Rs. 350.00 Lakhs availed from Bank ofIndia for the working capital requirements of the pharmaceutical division has beenclassified as non-performing asset (herein referred to as ‘NPA’) on 30thNovember 2018. The outstanding as on the date of classification by the bank as NPA wasRs. 363.88 Lakhs. The Company has not recognised interest liability on such loan from theday it has become NPA in line with the practice followed by the respective bank".

The Company has not made provision of interest due on the borrowings from Bank ofIndia post the date the account was classified as non-performing assets by the bank.

In the absence of the information on record the consequential impact if any on thestandalone financial statements is not ascertainable.

c. Attention is invited to note no. 10 and note no. 49 to the standalone financialstatements which considers capital advances of Rs. 769.70 lakhs as good and recoverableand also states that out of the same the Company is pursuing legal action in HonourableKolkata High Court against Medisphere Marketing Limited for recovery of the amount of Rs.459.80 Lakhs outstanding in its books. Further The Company is hopeful of recovering theabove amounts and hence no provision is considered necessary.

Out of the total capital advances capital advances of Rs. 755.07 Lakhs are outstandingfor more than three years as at the year end date and seems doubtful of recovery oradjustment however no provision is made against such doubtful capital advances.

In the absence of the information on record the consequential impact if any on thestandalone financial statements is not ascertainable.

Emphasis of Matters

a. Attention is invited to note no. 61 to the standalone financial statements whichstates that "The income tax department has through its order dated 7thFebruary 2019 has demanded an amount of Rs. 29129.34 Lakhs in lieu of the assessmentcarried out by the income tax departments for the assessments years 2009-10 to 2015-16.The Company has not provided for such liability in its books as it shall appeal suchdemand raised by the income tax department. Since the order was served on the Company on 3rdMay 2019 the Company has still time to appeal against such order".

b. Attention is invited to note no. 50 to the standalone financial statements whichstates that "The pharma division of the Company has adjusted trade payables amountingto Rs. 1021.40 Lakhs (Previous Year Rs. 1095.58 Lakhs) by way of a book entry on accountof direct payment to them by some trade receivables or by making direct payment to thesuppliers of the supplier from whom the Company is getting the products manufactured asper the Company’s specification. Such adjustments are only in the case of thefranchise arrangement and in case of a third party manufacturer".

c. Attention is invited to note no. 57 to the standalone financial statements whichstates that "Cash in hand includes cash amounting to Rs. 180.54 Lakhs which wasseized by the Income tax authorities during the search and seizure operation u/s 132 ofthe Income Tax Act 1961 during the month of June 2014".

d. Attention is invited to note no. 53 to the standalone financial statements whichstates that "The balances of majority of the Trade Receivables Trade Payables andLoan made and received are subject to confirmation and as such their balances arereflected in the Balance Sheet as appearing in the books pending reconciliation the neteffect is unascertainable".

e. Attention is invited to note no. 62 to the standalone financial statements whichstates that "The two subsidiaries companies viz. Alchemist Infrastructure PrivateLimited and Alchemist Hospitality Group Limited are in the process of voluntary strikeoff. The forms required to be filed with the Registrar of Companies have been filed andapproval is awaited. Hence the Company has written off the investment and loans extendedto such subsidiaries amounting to Rs. 4.74 Lakhs and Rs. 0.43 Lakhs respectively.

Our opinion is not qualified in respect of the matters as stated in the Emphasis ofMatters paragraph.

Key Audit Matter

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. In addition to the matters described in the Basisfor Qualified Opinion section we have determined the matter described below to be thekey audit matter to be communicated in our report.

Key audit matter How our audit addressed the key audit matter
Going concern assessment
Attention is invited to note no. 62 to the standalone financial statements which states that "The accumulated losses of the Company had exceeded its net worth. The Company’s operations were adversely affected in earlier financial years due to sluggish market demand working capital getting stuck in trade receivables and loss making manufacturing activity of the pharmaceutical unit. The Company has initiated legal recourse against the defaulting customers and is regularly following up on the same and the Company during the last year has even closed down its loss making pharmaceutical manufacturing. The units of the company now continue to operate at satisfactory capacity utilization levels and are generating positive Earnings before Interest Depreciation Tax and Amortization (EBIDTA). With strong management focus on strategic initiatives for cost rationalization optimum product mix and efficient plant operations the management believes that accumulated losses would reasonably be paired in due course. The standalone financial statements as such have been prepared on a going concern basis". The availability of sufficient funding and the testing of whether the company will be able to continue meeting its obligations under the financing covenants are important for the going concern assumption and as such are significant aspects of our audit. This test or assessment is largely based on the expectations of and the estimates made by management. The expectations and estimates can be influenced by subjective elements such as estimated future cash flows forecasted results and margins from operations. Estimates are based on assumptions including expectations regarding future developments in the economy and the market. Our audit procedures were focused on obtaining sufficient appropriate audit evidence that the going concern assessment made by the Company is not materially misstated. These procedures included but were not limited to the following:
We analysed management’s report to gain an understanding of the inputs and process underpinning the cash flow model prepared for the purpose of the going concern assessment.
We reviewed the operating performances of the various units of the Company to evaluate whether or not they are actually generating positive EBIDTA.
We assessed the possible mitigating actions identified by management in the event that actual cash flows are below forecast.

Information other than the Financial Statements and Auditor’s Report thereon

The Company’s Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual Report but does notinclude the standalone financial statements and our auditor’s report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we will not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management’s Responsibility for the Standalone Financial Statements

The Company’s Board of Directors are responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) prescribed undersection 133 of the Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company’s ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company’sfinancial reporting process.

Auditor’s Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor’s report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with Standards on Auditing will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with Standards on Auditing we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management’s use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany’s ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor’s report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor’s report. However future events or conditions may cause theCompany to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

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

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor’s report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to out weigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under section 197 read with Schedule V to the Act.

2. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure A a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

3. 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 bestof 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 theCompany so far as it appears from our examination of those books.

(c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.

(d) Except for the matter described in the Basis for Qualified Opinion sectionin our opinion the aforesaid standalone financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended.

(e) The matters described in the Basis for Qualified Opinion section and Emphasis ofMatters section above in our opinion may have an adverse effect on the functioning ofthe Company.

(f) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in termsof Section 164 (2) of the Act.

(g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion section above.

(h) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B".

(i) With respect to the other matters to be included in the Auditor’s Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to thebest ofour information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements – Refer note no.45 to the standalonefinancial statements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There was a delay of 43 days in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

for Anu and Associates
Chartered Accountants
Firm’s Registration Number: 019624N
Sd/-
CA. Parveen Kumar
Place: New Delhi Partner
Date: 27th May 2019 Membership Number: 531655

Annexure – A to the Independent Auditors’ Report

Referred to in paragraph 2 under 'Report on other Legal and Regulatory Requirements'section of our report of even date. We report that:

i) (a) In our opinion and according to the information and explanations given to usthe Company has maintained fixed asset register however the same does not specify thequantity and exact location of the fixed assets.

(b) In our opinion and according to the information and explanations given to us theCompany has not physically verified the fixed assets during the year. In our opinion theperiodicity of the physical verification is not reasonable having regard to the size ofthe Company and nature of its assets.

(c) In our opinion and according to the information and explanation given to us theCompany holds valid title for all the immovable properties in the books of the Company exceptfor one land valuing ? 55.59 Lakhs the title deed of which has not been produced beforeus for our verification of the same.

ii) In our opinion and according to the information and explanations given to usinventories have been physically verified during the year by the management at reasonableintervals. The material discrepancies if any noticed have been properly dealt with inthe books of accounts.

iii) According to the information & explanations given to us the Company hasgranted loans secured or unsecured outstanding at year end at Rs. 62.20 Lakhs to 7parties covered in the register maintained under section 189 of the Act.

(a) It has been informed to us that the terms of repayment have not been definedhowever they are repayable on the mutual agreement of both the parties involved. Moreoverthe loans granted are unsecured and interest free thus the terms of such loans areprejudicial to the interests of the Company.

(b) All the loans made are interest free and schedule of repayment are not definedhence the timeliness of repayment cannot be commented upon.

(c) As mentioned in the above paragraphs since terms of repayment of loans are notdefined we are unable to comment on the overdue amount.

iv) The Company has given loans/amount recoverable to/from two parties whose year endoutstanding balance is Rs. 19.07 Lakhs in contravention of provisions of Section 185 ofthe Companies Act 2013.

Further the Company has given interest free loans/amount recoverable to/from 11parties whose yearend outstanding balance is Rs. 876.93 Lakhs which is in contravention ofsub section 7 of section 186 of the Companies Act 2013 which requires that "No loanshall be shall be given under this section at a rate of interest lower than the prevailingyield of one year three year five year or ten year Government Security closest to thetenor of the loan".

v) The Company has not accepted deposits. Hence the provisions of Section 73 to 76 orany other relevant provisions of the Act and the rules framed there under are notapplicable to the Company.

vi) We have broadly examined the cost records maintained by the Company specified bythe Central Government under sub section (1) of section 148 of the Act and are of theopinion that prima facie the prescribed accounts and records have been made andmaintained. We have however not made a detailed examination of the records with a view todetermine whether they are accurate or complete.

vii) (a) Based on our audit procedures and on the information and explanations given bythe management we report that there has been delays in deposit of undisputed statutorydues including Provident Fund Employees' State Insurance Income-tax Goods and ServiceTax Sales Tax Service Tax Custom Duty Excise Duty Value Added Tax Cess and any otherstatutory dues to the extent applicable during the financial year. According to theinformation and explanations given to us statutory dues amounting to ? 92.82 Lakhswere outstanding as on 31st March 2019 for a period of more than six months from thedate it became payable.

(b) Details of statutory dues which have not been deposited as on 31stMarch 2019 by the Company on account of dispute is given below:

Nature of dues Name of the Statute Period to which amount relates

Amount demanded (Rs. in Lakhs)

Amount deposited under protest (Rs. in Lakhs) Forum where dispute is pending
Income Tax Income Tax Act 1961 2007-08

62.17

- Assessing Officer
Income Tax Income Tax Act 1961 2008-09 to 2014-15

29129.34

- Pending to be appealed with CIT (Appeals) New Delhi
Excise Duty Central Excise Act 1944 December 2007 to September 2012

173.55

63.13 Supreme Court

viii) Based on our audit procedures and on the information and explanations given bythe management we are of the opinion that during the year there have been delays inrepayment of dues by the Company to financial institutions banks or debenture holders.The details of the continuing default as on 31st March 2019 in repayment of principle andinterest is as follows:

(Rs. in Lakhs)

Name of Bank - Type of Loan

Sanction Amount

Default amount as on 31/03/19

Default cleared Amount

Default cleared date

Default outstanding as on 27/05/19

Punjab National Bank - Term Loan

2100.00

59.70

29.60

30-04-2019

30.10

Bank of India - Working Capital Limit

350.00

363.88

-

-

363.88

Total

2450.00

423.58

29.60

-

393.98

ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year therefore theprovisions of para 3(ix) of the Order is not applicable to the Company.

x) Based on the audit procedures performed and the information and explanations givento us we report that no fraud on or by the Company has been noticed or reported duringthe year nor have we been informed of such case by the management.

xi) Based on the audit procedures performed and the information and explanations givento us we report that the managerial remuneration has been paid or provided in accordancewith requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Companies Act 2013.

xii) In our opinion and according to the information and explanations given to us theCompany is not a nidhi company therefore the provisions of para 3(xii) of the Order isnot applicable to the Company.

xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him therefore the provisions ofpara 3(xv) of the Order is not applicable to the Company.

xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

for Anu and Associates
Chartered Accountants
Firm’s Registration Number: 019624N
Sd/-
CA. Parveen Kumar
Place: New Delhi Partner
Date: 27th May 2019 Membership Number: 531655

Annexure - B to the Independent Auditors' Report

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of AlchemistLimited ("the Company") as of 31st March 2019 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ('ICAI'). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's 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 financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2019based on the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the ICAI.

for Anu and Associates
Chartered Accountants
Firm’s Registration Number: 019624N
Sd/-
CA. Parveen Kumar
Place: New Delhi Partner
Date: 27th May 2019 Membership Number: 531655