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Imagicaaworld Entertainment Ltd.

BSE: 539056 Sector: Services
NSE: IMAGICAA ISIN Code: INE172N01012
BSE 00:00 | 26 Nov 11.53 -0.60
(-4.95%)
OPEN

12.70

HIGH

12.70

LOW

11.53

NSE 00:00 | 26 Nov 11.55 -0.50
(-4.15%)
OPEN

12.30

HIGH

12.30

LOW

11.45

OPEN 12.70
PREVIOUS CLOSE 12.13
VOLUME 37564
52-Week high 14.29
52-Week low 4.45
P/E
Mkt Cap.(Rs cr) 102
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 12.70
CLOSE 12.13
VOLUME 37564
52-Week high 14.29
52-Week low 4.45
P/E
Mkt Cap.(Rs cr) 102
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Imagicaaworld Entertainment Ltd. (IMAGICAA) - Auditors Report

Company auditors report

TO THE MEMBERS OF ADLABS ENTERTAINMENT LIMITED

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying standalone financial statements of Adlabs Entertainment Limited (the Company) which comprise the balance sheet as at 31st March 2019 the statement of profit and loss (including other comprehensive income) 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 (hereinafter referred to as the standalone financial statements).

In our opinion and to the best of our information and according to the explanations given to us the aforesaid standalone financial statements give the information required by the Companies Act 2013 (the Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read with The Companies (Indian Accounting Standards) Rules 2015 as amended and other accounting principles generally accepted in India of the state of affairs of the Company as at 31st March 2019 and its loss and total comprehensive income changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditor's Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. 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 statements.

Material Uncertainty related to Going Concern

We draw attention to Note 33 in the standalone financial statements of the Company which indicates that the Company has incurred a net loss of ? 34742.95 Lakhs during the year ended 31st March 2019 and as of that date the net worth of the Company has been substantially eroded. Further borrowings of the company have been called back by the secured lenders due to material breach of debt covenants by the company and consequently the company has re-classified the borrowings as current borrowings in the standalone financial statements. Subsequent to this reclassification the current liabilities are substantially higher than current assets of the company as at 31st March 2019. In addition to this application has also been made against the company by one of the secured lenders to National Company Law Tribunal (NCLT) Mumbai under the provisions of the Insolvency Bankruptcy Code 2016 as referred in the aforementioned note. These events or conditions indicate the existence of material uncertainty that may cast significant doubt on the company's ability to continue as a going concern.

However the standalone financial statements of the company have been prepared on a going concern basis for the reasons stated in the said note.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of most significance in our audit of the standalone financial statements for the year ended 31st March 2019. These matters were addressed in the context of our audit of standalone financial statements as a whole and in forming our opinion thereon and we do not provide a separate opinion on these matters. Key audit matters that may cast significant doubt on the Company's ability to continue as a going concern in accordance with Standards of Auditing (SA) 570 (Revised) - Going Concern are described in the Material Uncertainty related to Going Concern section of this report. Apart from these key audit matters we have determined the matter described below to be the key audit matter to be communicated in our report.

1. De-recognition of Deferred Tax Asset

The Company has de-recognised Deferred Tax Assets (DTA) of Rs.16540.55 Lakhs on uncertainty offuture taxable profits. This amount mainly comprises of carry forward of business losses and unabsorbed depreciation under the provisions of Income Tax Act 1961. Refer note 32 to the Standalone Financial Statements.

Principal Audit Procedures

We have evaluated the appropriateness of the management's judgment on uncertainty or non-availability of convincing other evidence that sufficient taxable profits will be available in future. We have involved our internal experts to review the management estimation of the future taxable profits of the company. Further we have also considered the matters which may cast significant doubt on the Company's ability to continue as a going concern as reported above which impacts the assessment of de-recognition of Deferred Tax Asset in the standalone financial statements.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis Board's Report including Annexures to Board's Report Corporate Governance and Shareholder's Information but does not include the financial statements and our auditor's report thereon. The above mentioned reports are expected to be made available to us after the date of this auditor's report.

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

In connection with our audit of the financial statements our responsibility is to read the other information identified above when it becomes available and in doing so consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. When we read the above mentioned reports if we conclude that there is a material misstatement therein we will communicate the matter to those charged with governance and will take appropriate actions as per the applicable laws and regulations.

Responsibilities of Management and Those Charged With Governance

The Company's 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 standalone financial statements that give a true and fair view of the financial position financial performance (including other comprehensive income) cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India including the Indian Accounting Standards specified in the Companies (Indian Accounting Standards) Rules 2015 (as amended) 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.

Auditor's Responsibilities for the Audit of Financial Statements

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 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 the disclosures in the financial statements. The procedures selected depend on the auditor's judgment including the assessment of the risks of material misstatement of the financial statements whether due to fraud or error. In making those risk assessments the auditor considers internal financial control relevant to the Company's preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Company's Directors as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the standalone financial statements.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 (the Order) issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act we give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we report that:

a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the 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 it appears from our examination of those books.

c. The Balance Sheet the Statement of Profit and Loss (including other comprehensive income) the Cash Flow Statement and the statement of changes in equity dealt with by this Report are in agreement with the books of account.

d. In our opinion the aforesaid standalone financial statements comply with Indian Accounting Standards specified under section 133 of the Act read with rule 3 of the Companies (Indian Accounting Standards) Rules 2015 (as amended).

e. On the basis of the written representations received from the directors as on March 31 2019 taken on record by the Board of Directors none of the directors are disqualified as on March 31 2019 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 B.

g. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31st March 2019 on its financial position in its standalone financial statements - Refer Note no. 30;

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 were required to be transferred to the Investor Education and Protection Fund by the Company.

For A.T. Jain & Co.

Chartered Accountants

(Firm Registration No.: 103886W)

Hiten Sarvaiya

Partner

Membership No.: 164094

Place: Mumbai

Date: 16th May 2019

Annexure A to the Independent Auditor's Report of even date on the Standalone Financial Statements of ADLABS ENTERTAINMENT LIMITED

We report that

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

b) As per the information and explanations given to us Fixed Assets were physically verified during the year by the management as per its programme. The frequency of verification is reasonable and no material discrepancies have been noticed on such verification.

c) According to the information and explanation given to us and on the basis of our examination of the records of the Company the title deeds of immovable property are held in the name of the company.

2. As explained to us inventories have been physically verified during the year by the management at reasonable intervals. Stock of food items merchandise stores and spare parts are reported to be physically verified in accordance with the procedure followed by the management. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

3. The company has granted loan to one party covered in the register maintained under Section 189 of the Act.

a) In our opinion and on the basis of explanation given to us the terms and conditions on which the loans had been granted to the party were not prima facie prejudicial to the interest of the Company.

b) The loan is repayable on demand and there is no overdue.

4. In our opinion and according to the information and explanation given to us the Company has complied with the provisions of Section 185 and 186 of the Act with respect to the loans given and investment made.

5. As per the information's and explanations given to us the company has not accepted any deposits from the public during the year. Therefore the provisions of paragraph 3(v) of the Order are not applicable to the ompany.

6. According to the information and explanations given to us the Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Companies Act 2013.

7. a) According to the information and explanations given to us and on the basis of our examination of the records of the Company amounts deducted/ accrued in the books of account in respect of undisputed statutory dues including provident fund income tax sales tax service tax duty of customs duty of excise value added tax cess and other statutory dues have been regularly deposited during the year by the Company with the appropriate authorities.

As explained to us the Company did not have any dues on account of employees' state insurance. According to the information and explanations given to us no undisputed amounts payable in respect of provident fund income tax sales tax service tax duty of customs duty of excise value added tax cess and other statutory dues were in arrears as at 31st March 2019 for a period of more than six months from the date they became payable.

b) According to the information and explanations given to us there are no material dues of income tax sales tax service tax duty of excise value added tax which have not been deposited with the appropriate authorities on account of any dispute. However according to information and explanation given to us the following dues have not been deposited by the Company on account of disputes:

Name of StatuteNature of DuesAmount ( Rs. in Lakhs)Period to which it RelatesForum where dispute is Pending
Custom Act 1962Special Additional Duty (SAD)77.49(1)June - 2012 to September -2013CESTAT
Custom Act 1962Penalty1118.49June - 2012 to September -2013CESTAT

 

Name of StatuteNature of DuesAmount ( Rs. in Lakhs)Period to which it RelatesForum where dispute is Pending
Finance tax Act 1994Service Tax57.83(2)April - 2010 to March - 2012CESTAT
Finance tax Act 1994Penalty64.74April - 2010 to March - 2012CESTAT

Note(s):-

(1) Total demand Rs.1118.49 Lakhs - amount deposited Rs.1041.00 Lakhs.

(2) Total demand Rs. 64.74 Lakhs - amount deposited Rs. 6.91 Lakhs.

8. According to the information and explanation given to us and based on the documents and records examined by us the company has defaulted in repayment of loans due to following banks and financial institutions:-

Name of the LendersAmount of default as at the balance sheet date (Rs. in Lakhs)Period of default (Maximum No. of days delayed)
A. Banks
1. Union Bank of India25925.73372 days
2. Bank of Baroda13907.75366 days
3. Vijaya Bank5460.95336 days
4. Syndicate bank5147.36244 days
5. Punjab and Sind Bank5218.89244 days
6. Jammu and Kashmir Bank6833.61244 days
7. Indian Overseas Bank9294.13244 days
8. Corporation Bank7305.03244 days
9. Dena Bank4383.47244 days
10. Central Bank of India4941.34244 days
11. Bank of India6033.88244 days
B. Financial Institutions
1. Life Insurance Corporation of India4628.61366 days
2. Tourism Finance Corporation of India5313.39366 days

9. In our opinion and on the basis of information and explanations given to us money raised by way of public offer and the term loans were applied for the purposes for which they were raised.

10. According to the information and explanations given to us no fraud on or by the company was noticed or reported during the course of our audit.

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

12. In our opinion and according to the explanations given to us the Company is not a Nidhi company. Accordingly paragraph 3(xii) of the order is not applicable.

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 Section 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 explanation given to us and based on our examination of the records of the company the company has complied with the provision of section 42 of the Act while making preferential allotment or private placement of shares during the year and the amount raised were utilized for the purpose for which the funds were raised.

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 noncash transactions with directors or persons connected with him. Accordingly paragraph 3(xv) of the order is not applicable.

16. The Company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For A.T. Jain & Co.

Chartered Accountants

(Firm Registration No.: 103886W)

Hiten Sarvaiya

(Partner)

Membership No.: 164094

Place: Mumbai

Date: 16th May 2019

Annexure B to the Independent Auditor's Report of even date on the Standalone Financial Statements of ADLABS ENTERTAINMENT LIMITED

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 Adlabs Entertainment Limited (the Company) as of March 31 2019 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's 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 company's 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 Company's 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 ICAI. 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 auditor's judgement 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 Company's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's 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 company's 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 company'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 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 2019 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.

For A.T. Jain & Co.

Chartered Accountants

(Firm's Registration No.:103886W)

Hiten Sarvaiya

Partner

Membership No.: 164094

Place: Mumbai

Date: 16th May 2019

   

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