To the Members of Landmarc Leisure Corporation Limited Report on theAudit of the Financial Statements
We have audited the financial statements of Landmarc LeisureCorporation Limited ("the Company") which comprise the Balance Sheet as at31st March 2021 the Statement of Profit and Loss (including otherComprehensive Income) the Statement of Changes in Equity) and the Statement of Cash Flowsfor the year ended on that date and notes to the Financial Statements including asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "the Financial Statements").
In our opinion and to the best of our information and according to theexplanations given to us except for the effect of the matters described in the Basis ofQualified Section of our report the aforesaid financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the India Accounting Standards prescribedunder Section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended ("Ind As") and other accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2021 the loss and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
Basis for Our Qualified Opinion
(i) Refer Note No. 33a.to the financial statement regardingnon-provision for doubtful Security deposit given by the Company and non-availability ofconfirmation as the said Company has gone into Liquidation and liquidator has beenappointed amounting to Rs. 1500 Lacs having consequential impact on the Loss for theyear Deposits and Provisions to the said extent.
(ii) Refer Note No. 32 to the financial statement regarding nonreorganization of interest income on security deposit given to two parties as mutuallyagreed with both the body corporate amounting to Rs 295.51 Lakhs and total interest incomenot recognized since the time the said security deposit has been given by the Companyamounting to Rs 4528.76 Lakhs. Further the Company has not provided for rentals payableto the said company amounting to Rs. 898.37 Lakhs for the premises being used in lieu ofthe unreceived interest income having consequential impact on the Interest income Rentalexpenses Loss and Deposit to the said extent.
(iii) Refer Note no. 34 to the financial statement that the Company hasduring the quarter and year ended has not carried out Actuarial valuation as per therecommendations of Ind AS 15 "Employee Benefits" issued by the Institute ofChartered Accountants of India and instead provided for Gratuity on accrual basis as perManagement Estimates. The amount of shortfall in such provision is currentlyunascertainable since the Actuarial Valuation was not carried out. However the managementis of the opinion that the provision created in the books is sufficient considering thenumber of employees.
(iv) Refer Note no. 33 b. to the financial statement that the Companyregarding no provision has been made towards doubtful recovery considered by us of prorata security deposit (interest free) amounting Rs 1218.28 Lakhs representing depositgiven against unutilized vacant space forming part of the total deposit given by theCompany in terms of the agreement having year-end balance of Rs 2218.28 Lakhs which ishigher than space occupied by the Company the management has also evaluated the depositfor the space occupied by them which should be approximately 1000 Lakhs thereby nonprovision against the excess deposit is having consequential impact on the Loss for theyear which has been understated and Deposits which has been overstated to the extent ofRs. 1218.28 Lakhs.
(v) Refer Note no. 50 to the financial statement of the Companyregarding the fact that the company has paid an amount of Rs. 83.84 Lakhs to vendors fromwhom the services have been availed and bills are pending to be received. The said billspertain to a film project which is under development however the impact of such on Capitalwork in progress and Advance to vendors is presently unascertainable in absence of bills.
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (CAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules made thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics issued by the ICAI. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.
Emphasis of Matter
1) Refer Note no. 49 to the financial statement of the Company whichstates that an outbreak of Corona virus (COVID-19) pandemic globally and in India iscausing significant disturbance and slowdown of economic activity. Based on the Companyassessment of impact of COVID-19 including the second wave on its liquidity position andon the recoverability and carrying values of its assets and has concluded that there is nosignificant impact on account of the same on its financial statement as at 31st March2021. Further the impact assessment of COVID 19 is a continuous process given theuncertainties associated with its nature and duration. The management will continue tomonitor material changes to the future economic conditions which may have an impact on theoperations of the Company.
2) Refer Note no. 48 to the financial statement of the Company whichstates that SEBI had passed a Confirmatory Order dated June 05 2018 confirming theInterim Order whereby the directions issued by Bombay Stock Exchange (BSE) dated December22 2017 to the Company for conducting Forensic Audit was to be considered. However theCompany has filed an appeal to the Hon'ble Securities Appellate Tribunal (SAT) on July 262018 in this regard. In the hearings carried on October 11 2018 SAT has rejected therequest for stay on the forensic audit & directed to co-operate with the ForensicAuditor appointed by BSE on 22.12.2017. The Company has provided some details to theForensic Auditor and further working on the requirements given by Forensic Auditor. TheCompany had a hearing before SAT on 08.02.2019 and the matter stands over to next hearingdated 12.03.2019 in which the Company and SEBI are directed to bring out the latestposition relating to the ongoing forensic audit. Further in the hearing dated 25.04.2019an undertaking was given by BSE officials that the Forensic Audit Report will be issuedbefore 15.06.2019. The Company has not received any further communication from the BSE onthe said matter nor received any aforesaid report. The Company its current and thendirector and KMPS have received a Notice from SEBI regarding the details furnished byForensic Auditor to SEBI on 17.02.2020 the Company has request extension of time to replyto the said notice and have appointed a legal counsel to respond on it. Further a responsewas filed by the Legal Counsel and a hearing was fixed for 9th December'2020 with SEBIwhich was attended by Officials of the Company and the matter is pending with SEBI. In themeanwhile Company is in discussion with Legal Counsel has decided to file a SettlementScheme with SEBI for which application for the Company has already been made.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have nit determined the following matter to be the Key audit matter tobe communicated in our Report.
Information Other than the Financial Statements and Auditor'sReport Thereon
The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in theManagement Discussion and Analysis Board's Report including Annexures to Board's ReportBusiness Responsibility Report and Shareholder's Information but does not include thefinancial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon. In connectionwith our audit of the financial statementsOur responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the financial statements or our knowledge obtained during the course ofour audit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard expect thatstated in Basis of Qualified Opinion and Emphasis of Matter above.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financialperformance total Comprehensive Income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing 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 financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
The Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whetherthefinancial statements as a whole are free from material misstatement whether due tofraud or 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 SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements. As a part of an audit inaccordance with the SAs we exercise professional judgment and maintain professionalskepticisms throughout the Audit.
Identify and assess the risk of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis of our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under Section 143(3)(i) of the Act we are also responsible for expressingan opinion on whether the Company has adequate internal financial controls system in placeand the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis 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 the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the resultsof our work; and
(ii) to evaluate the effect of any identified misstatements in thefinancial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards. From the matterscommunicated with those charged with governance we determine those matters that were ofmost significance in the audit of the financial statements of the current period and aretherefore the key audit matters.
We describe these matters in our auditor's report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits of such communication.
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 Companies Act 2013 we give in the "Annexure A"a statement on the matters specified in paragraphs 3 and 4 of the Order to the extentapplicable.
2. As required by Section 143(3) of the Act we report that:
a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b) In our opinion proper books of account as required by law have beenkept 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 otherComprehensive Income Statement of Changes in Equity and the Statement of Cash Flow dealtwith by this Report are in agreement with the relevant books of accounts.
d) Except for the effects of the matter described in the Basis forQualified Opinion paragraph above in our opinion the aforesaid financial statementscomply with the Ind As specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) The qualification relating to the maintenance of accounts and othermatters connected therewith are as stated in the Basis for Qualified Opinion paragraphabove.
f) On the basis of the written representations received from theDirectors as on 31stMarch 2021 taken on record by the Board of Directors noneof the Directors is disqualified as on 31stMarch 2021 from being appointed asa director in terms of Section 164 (2) of the Act.
g) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure B". Our report expresses an modified opinionon the adequacy and operating effectiveness of the Company's internal financial controlsover financial reporting.
h) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of Section 197(6) of the Act as amended Rule11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best ofour information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements.
ii. The Company does not have long-term contracts including derivativecontracts requiring provision for material foreseeable losses.
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
Annexure A to the Auditors' Report
In terms of the information and explanations given to us and the booksand records examined by us and on the basis of such checks as we considered appropriatewe further report as under:
1. Fixed Assets
(a) The Company has maintained proper records showing full particularsincluding quantitative details and situation of Property Plant and Equipment's.
(b) The Company has a regular program of physical verification of itsProperty Plant and Equipment's by which all fixed assets are verified in a phased mannerover a period of three years. No material discrepancies were noticed on such verification.
(c) According to the information and explanation given to us and on thebasis of our examination of the records of the Company the Company does not have anyimmovable properties.
During the year the management has conducted physical verification ofinventories comprising of shares and CDs at regular intervals. As explained to us therewere no discrepancies noticed upon physical verification conducted by the management.
3. Loans to parties of Directors' interest
During the year the Company has not granted any loans secured orunsecured to the parties covered in the register maintained under Section 189 of the Act.
4. Loans/Guarantees/Investments in / Provision of Security to certainparties
Based on the information and explanation given to us and on the basisof records verified by us the company has complied with the provision of sec 185 and 186of the act to the extent applicable.
5. Acceptance of Deposits
The Company has not accepted deposits as per the directives issued byReserve Bank of India and the provisions of Sections 73 to 76 or any other relevantprovisions of the Act and the rules framed there under.
6. Maintenance of Cost Records
As explained to us maintenance of cost records has not been prescribedby the Central Government for the Company under Section 148(1) of the Act.
7. Undisputed & Disputed Statutory Dues.
As per the records verified by us the Company is generally regular indepositing the undisputed statutory dues involving Provident Fund Income tax Service Taxand Value Added Tax with the appropriate authorities during the year under review andthere were no outstanding undisputed statutory dues with the Company for a period of morethan six months as at the close of the year except Tax deducted at source amounting toRs 15.73 Lacs and Employee State Insurance amounting to Rs. 0.20 Lacs. The provisionsof the statutes governing Wealth Tax Customs Duty Investor Education and ProtectionFund Excise Duty and Cess are as explained to us not applicable to the Company duringthe year under review.
As per the records of the Company and based on information andexplanation given to us there are no disputed dues except Income Tax and Service Taxaggregating to Rs 109.77 Lacs as given below:
|Assessment Year ||Amount (Rs in Lacs) ||Forum where dispute is pending |
|2006-2007 ||16.74 ||Commissioner of Income Tax (Appeals) |
|2010-2015 ||93.03 ||Commissioner of Central Excise (Appeals) |
8. Loans from Banks/Financial Institutions/ Government/Debentures
The Company has not borrowed from any financial institution or bank norhas it issued any debentures during the year under review.
9. Proceeds of Public issue (including debt instruments) /Term Loans
The Company has not raised any money during the year through initial /further public offer (including debt instruments) nor has the Company availed any termloan during the year under review.
10. Frauds on or by the Company
During the course of our examination of the books and records of theCompany carried out in accordance with the generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any instance of fraud on or by the Company or its officers/employees noticed orreported during the year nor have we been informed of such case by the management.
11. Managerial Remuneration
As per the Company's records managerial remuneration paid by theCompany is in accordance with section 197 of the Act read with schedule V.
12. Nidhi Companies
The Company is not a Nidhi company during the year under review andhence the criterion as stipulated under Nidhi Rules 2014 is not applicable to theCompany.
13. Related Party Transactions
As per the information and explanations given during the course of ourverification in our opinion all transactions with the related parties made by theCompany were in compliance with Sections 177 and 188 of the Act to the extent applicableto the Company during the year. The relevant details in respect of the same have beenappropriately disclosed as per the requirements of the Indian Accounting Standards (IndAS)-24.
14. Preferential Issue
During the year the Company has not made any preferential allotment orprivate placement of shares or convertible debentures and hence the requirements ofSection 42 of the Act are not applicable.
15. Non-cash Transactions with Directors etc.
As per the information and explanations provided to us during theyear the Company has not entered into any non-cash transactions with directors or personsconnected with the directors within the purview of Section 192 of the Act.
16. Provisions of 45-IA of the Reserve Bank of India Act1934
As per the information and explanations provided to us and based on theoverall operations of the Company during the year the Company is not required to beregistered under Section 45-IA of the Reserve Bank of India Act 1934.
Annexure B to the Independent Auditor's Report of even date on thefinancial statement of the Landmarc Leisure Corporation Limited
Report on the Internal Financial Controls under Section 143(3)(i) ofthe Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of Landmarc Leisure Corporation Limited("the Company") as of 31stMarch 2021 in conjunction with our audit of the financial statements of the Companycomprising of the Balance Sheet as at March 31st 2021 the Statement of Profitand Loss and the Cash Flow Statement for the period then ended.
Management's Responsibility for Internal Financial Controls:
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India (the ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to Company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting and the Standards on Auditing issued by the ICAI deemed to be prescribed undersection 143(10) of the Companies Act 2013 to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those standards and the Guidance Note that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness.
Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting. Meaning of Internal Financial Controls overFinancial Reporting:
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that
(1) Pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) Provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorizations of management and directors of thecompany; and
(3) Provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over FinancialReporting:
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31st2021 Subject to Loans Other Financial Asset and Expenses and its documentation based onthe 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 Institute ofChartered Accountants of India.
| ||For S K H D & Associates |
| ||Chartered Accountants |
| ||Firm Registration No. 105929 W |
| ||Hemanshu Solanki |
| ||Partner |
| ||Membership No. 132835 |
| ||UDIN : 21132835AAAABZ7749 |
|Mumbai dated 30th June 2021 || |