To the Members of
QVC Realty Co. Limited
(formerly QVC Realty Co. Private Limited)
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of M/s.QVC RealtyCo. Limited (formerly QVC Realty Co. Private Limited) (the Company') which comprise theBalance Sheet as at 31 March 2017 the Statement of Profit and Loss and the Cash FlowStatement for the year then ended and a summary of significant accounting policies andother explanatory information.
Management's Responsibility on the Standalone Financial Statements
2. The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
4. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31 March 2017 and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
5. 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 ofthe Act we give in the "Annexure A" a statement on the matters specified in theparagraph 3 and 4 of the Order to the extent applicable.
6. As required by section 143(3) of the Act we report to the extent applicable 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 & Loss and (Cash Flow Statementdealt with by this Report are in agreement with the books of account;
(d) in our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014;
(e) on the basis of the written representations received from the directors as on31-Mar-2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31-Mar-2017 from being appointed as a Director in terms of Section164(2) of the Act; and
(f) In our opinion and based on the information and explanations provided to us theCompany has adequate Internal Financial Controls system in place and such controls areoperating effectively;
(g) 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 the best of our information and according to the explanations given to us:
i. the Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 26(a) to the financial statements;
ii. the Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts - Refer Note 1(ii) Note 1(xi) and Note 33 to the financialstatements;
iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
iv. The company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016 and these are in accordance with the books of accountsmaintained by the company. Refer Note 36 of Financial Statements.
| ||For RCE & Co. |
| ||Chartered Accountants |
| ||ICAI Firm Reg.No.009141S |
|Place: Bangalore ||Partner |
|Date : 22 May 2017 ||Membership No.202063 > |
ANNEXURE A - TO INDEPENDENT AUDITORS' REPORT
The Annexure referred to in Independent Auditors' Report to the members of the Companyon the standalone financial statements for the year ended 31 March 2017 we report that:
i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Fixed Assets of the Company have been physically verified by the Managementduring the year and no material discrepancies between the book records and the physicalinventory have been noticed. In our opinion the frequency of verification is reasonable.
(c) The Company does not have any immovable property.
ii) Inventories comprise Land acquistion costs Real Estate Project Development Costsand Costs of Construction Work-in-Progress. Cost includes direct expenditure during theperiod of construction borrowing costs and other indirect costs directly attributable tothe project. Physical verification of inventory has been conducted at reasonable intervalsby the management in our opinion the frequency of verification is reasonable.
iii) The Company has not granted loans to bodies corporate covered in the registermaintained under section 189 of the Companies Act 2013 (The Act').
iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans investments guarantees and securities made.
v) According to the information and explantions given to us the company has notaccepted any deposits from the public within the meaning of section 73 to 76 of the Actand the rules framed thereunder. Therefore the provision of the clause 3(v) is notapplicable to the company.
vi) The Company's turnover does not exceed the threshold limit of Rs.100 Croresaccordingly the maintenance of cost records as prescribed under section 148(1) of theCompanies Act 2013 in respect of the activities carried out by the Company is notapplicable.
vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income taxsales tax wealth tax service tax duty of customs value added tax cess and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities.
According to the information and explanations given to us no undisputed amountspayable other than what is mentioned below in respect of provident fund income tax salestax wealth tax service tax duty of customs value added tax cess and other materialstatutory dues were in arrears as at 31 March 2017 for a period of more than six monthsfrom the date they became payable.
(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income-tax sales tax wealth tax servicetax customs duty excise duty and cess which have not been deposited on account of anydispute.
viii) i The Company does not have any loans or borrowings from any financialinstitution banks government or debenture holders during the year. Accordinglyparagraph 3(viii) of the Order is not applicable.
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. Accordinglyparagraph 3 (ix) of the Order is not applicable.
x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraud on or by the Company noticed or reported during the year nor have webeen informed of such case by the Management.
xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
xii) In our opinion and according to the information and Explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
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. Accordingly paragraph 3(xv) ofthe Order is not applicable.
xvi) In our opinion the Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
| ||For RCE & Co. |
| ||Chartered Accountants |
| ||ICAI Firm Reg NO.009141S |
|Place: Bangalore ||Partner |
|Date: 22-May-2017 ||Membership No.202063 |