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Auditor Report of Alchemist Ltd.

Mar 31, 2015

We have audited the accompanying standalone financial statements of ALCHEMIST LIMITED ("the Company"), which comprise the Balance Sheet as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow Statement, and a summary of the significant accounting policies and other explanatory information for the year then ended.

Management's Responsibility for the Standalone Financial Statements

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 of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the preparation 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' Responsibility

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, but not for the purpose of expressing an opinion on whether the Company has in place an adequate internal financial control system over financial reporting and the operating effectiveness of such controls. 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 qualified audit opinion on the standalone financial statements.

Basis for Qualified Opinion

The Company has not complied with the provisions of proviso to sub section 2 of Section 55 of the Act as out of the total value of preference shares (including premium) amounting to Rs. 102.20 lacs redeemed during the year, Rs. 96.84 lacs has been redeemed otherwise than out of the profits of the Company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purpose of such redemption. The Company has advanced as loan an amount of Rs. 13532.17lacs to 16 parties as interest free unsecured loan, the same is in violation of sub section 7 of Section 186 of the Act. The sub section requires that "No loan shall be given under this section at a rate lower than the prevailing yield of one year, three year, five year or ten year Government Security closest to the tenor of the loan".

The Company has computed the Depreciation on the tangible fixed assets using straight line method based on the useful life of the assets as prescribed in Schedule II of the Companies Act, 2013 and the management estimates of useful life for tangible and intangible assets not covered by the Schedule II. However, for the assets purchased/commissioned prior to 1st April, 2010, the purchase date of assets has been considered as 1st April, 2010. The same is in violation of Accounting Standard 6-Depreciation Accounting as this treatment not only enhances the useful life of the assets that have already been consumed but has an effect over the depreciation computed. The loss to that extent is under/over stated and similarly the assets, the effect however could not be quantified.

Qualified Opinion

In our opinion and to the best of our information and according to the explanations given to us, except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2015, and its loss and its cash flows for the year ended on that date.

Emphasis of Matters

a. Attention is invited to note no. 14 and 33 to the standalone financial statements wherein "the entire Capital advances amounting to Rs. 797.92 lacs have been considered as good and realisable by the Company. The Company has indicated it has undertaken legal action against one party whose outstanding is Rs. 459.80 lacs".

It is relevant to note that out of the total capital advances, advances amounting to Rs. 784.86 lacs are outstanding for a period of more than three years. No provision on such capital advances is made.

b. Attention is invited to note no. 18 to the standalone financial statements which states that "Trade receivables amounting to Rs. 21468.10 lacs out of the total trade receivables of Rs. 45529.76 lacs is outstanding for more than six months from the date they became due for payment".

Attention is also invited to note no. 51 wherein the Company has stated "The company extends credit from time to time as per market practices. In respect of export receivables, credit has been extended for export sales and regular follow up is being done to recover the amounts from all the parties involved. The management is confident of recovering all these dues and hence no provision is considered necessary against these receivables as of now".

c. Attention is invited to note no. 42 to the standalone financial statements "The balances of majority of the Trade Receivables, Trade Payables and Loan & Advances made and received, are subject to confirmation and as such there balances are reflected in the Balance Sheet as appearing in the books, pending reconciliation, the net effect is unascertainable".

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

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order, 2015 ("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 statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

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

(a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes 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, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) Except for the effects of the matter described in the Basis for Qualified Opinion paragraph above, in our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) The matters described in the Basis for Qualified Opinion paragraph and Emphasis of Matters paragraph above, in our opinion, may have an adverse effect on the functioning of the Company.

(f) On the basis of the written representations received from two directors as on 31st March, 2015 taken on record by the Board of Directors, the two directors are not disqualified as on 31st March, 2015 from being appointed as a director in terms of Section 164 (2) of the Act. However, since the representation from the balance five directors have not been provided to us, it is not possible for us to comment as to whether they are qualified to act as a director in terms of Section 164(2) of the Act.

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

(h) 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 on its financial position in its standalone financial statements - Refer note no. 30 to the standalone financial statements.

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

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

Annexure to the Independent Auditors' Report Referred to in paragraph 1 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 us, the Company has maintained fixed asset register however the same does not specify the quantity and exact location of the fixed assets.

(b) In our opinion and according to the information and explanations given to us, the Company has formulated a regular program of verification by which all the assets of Company have been physically verified. In our opinion the periodicity of the physical verification is reasonable having regard to the size of the Company and nature of its assets. However, since the fixed asset register does not specify the quantity and exact location of fixed assets, the comparison of the fixed assets identified during physical verification with the fixed asset register has not been done. Accordingly, variation could not have been noticed and hence no adjustment was made in the books.

(ii) (a) In our opinion and according to the information and explanations given to us, inventories have been physically verified during the year by the management at reasonable intervals except for the work in progress inventory.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories except for the work in progress inventory. Discrepancies were noticed on physical verification of stocks by the management as compared to book records and the same were duly adjusted in the books of accounts.

(iii) (a) According to the information & explanations given to us, the Company has granted loans, secured or unsecured outstanding at year end at Rs. 13482.05 to 14 companies covered in the register maintained under section 189 of the Act.

(b) It has been informed to us that with regard to the loan to Alchemist Foods Limited, subsidiary of the Company, outstanding at Rs. 12982.61 lacs can be recalled by the Company by giving a prior notice of at least twelve months, subject to concurrence of the loanee. However, no documentation to support the claim has been provided to us. With regard to balance loans it has been informed to us that the terms of repayment have not been defined, however, they are repayable on the mutual agreement of both the parties involved. In such circumstances, we are unable to comment whether receipt of principal is regular.

All the loans made are interest free, hence question of receipt of interest doesn't arises.

(c) As mentioned in the above paragraph, since no documented loan agreement was provided, we are unable to comment on the overdue amount.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for the sale of goods and services. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

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

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

(vii) (a) Based on our audit procedures and on the information and explanations given by the management, we report that undisputed statutory dues including Provident Fund, Employees' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, Value Added Tax, Cess and any other statutory dues, to the extent applicable, have generally been regularly deposited with the appropriate authorities, though there have been slight delays in few cases. According to the information and explanations given to us there was an amount of Rs. 1.79 lacs pertaining to labour cess outstanding as on 31s March, 2015, for a period of more than six months from the date it became payable.

(b) Details of excise duty which has not been deposited as on 31s March, 2015 by the Company on account of dispute is given below:

Name of the Nature of Forum where Total Amount Statute the dues pending involved* (Rs. Lacs)

Central Excise Commissioner of 173.55 Excise Act, Duty Central Excise 1944 Commissionerate, Chandigarh.



Name of the Statute Amount paid Period to which under protest amount relates (Rs. Lacs)

Central Excise Act, 1944 63.13 December, 2007 to September, 2012

* Amount as per demand order, not including interest and penalty as not quantified in the demand order.

(c) According to the information and explanations given by the management, the amount which was required to be transferred to the Investor Education and Protection Fund by the Company was transferred within time.

(viii) The accumulated losses of the Company as at the end of the financial year are less than fifty percent of the net worth of the Company. The Company has incurred cash loss during the financial year covered by our audit but not in the immediately preceding financial year.

(ix) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, during the year there have been delays in repayment of dues by the Company to financial institutions, banks or debenture holders. The details of the continuing default as on 31s March, 2015 in repayment of principle and interest is as follows:

Details of continuing default as on 31st March, 2015 in repayment of loans and interest:

Sanction Default amount as Default cleared

Name of Bank - Type of Loan Amount on 31/03/15 Amount

Punjab National Bank - Project Term Loan 210000000 8074085 3,986,703

UCO Bank - Vehicle Loan 612000 39177 0

UCO Bank - Vehicle Loan 1143000 81270 0

UCO Bank - Vehicle Loan 716000 61176 0

UCO Bank - Vehicle Loan 529000 42528 0

Total 213000000 8298236 3,986,703



Name of Bank - Type of Loan Default cleared Default outstanding date as on 28/05/15

Punjab National Bank - Project Term Loar 19/5/15 4,087,382

UCO Bank - Vehicle Loan - 39,177

UCO Bank - Vehicle Loan - 81,270

UCO Bank - Vehicle Loan - 61,176

UCO Bank - Vehicle Loan - 42,528

Total 4,311, 533

(x) According to the information and explanations given to us, the Company has given guarantee for loan taken by others from banks or financial institutions to an extent of Rs. 2761.99 lacs. The terms and conditions of the guarantees issued except for guarantees amounting to Rs. 700.00 lacs are not prejudicial to the interest of the Company. The Company could not have issued guarantees for Rs. 700.00 lacs as the same is in violation of the requirements of Section 185 of the Act.

(xi) Based on our audit procedures and on the information and explanation given by the management, we report that the term loans have been applied for the purpose for which they were raised.

(xii) Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

For N. Kumar Chhabra & Co.

Chartered Accountants

Firm's Registration Number: 000837N

CA. Ashish Chhabra

Partner

Membership Number: 507083

Place of Signature: New Delhi

Date: 28th May, 2015


Mar 31, 2014

We have audited the accompanying financial statements of Alchemist Limited ("the Company") which comprise the Balance Sheet as at March 31,2014, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act") read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013. This responsibility includes the design, implementation and maintenance of internal control relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from materia! misstatement, whether due to fraud or error.

Auditor''s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate.in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity''s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31,2014;

b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Emphasis of Matter

Without qualifying our report, we draw attention to the note no. 43 to the financial statements "The balances of some of the trade receivables, trade payables and loans & advances made and received, are subject to confirmation and as such there balances are reflected in the Balance Sheet as appearing in the books, pending reconciliation, the net effect is unascertainable,". In view of the same, the impact, if any, on the financial statements could not be ascertained.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) we have 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 appears from our examination of those books;

c) the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 read with the General Circular 15/2013 dated 13th September, 2013 of the Ministry of Corporate Affairs in respect of Section 133 of the Companies Act, 2013; and

e) on the basis of written representations received from the directors as on March 31, 2014, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2014, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

Referred to in paragraph 1 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 us, the Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) In our opinion and according to the information and explanations given to us, the Company has formulated a regular program of verification by which all the assets of Company have been physically verified. No material discrepancies were noticed on physical verification conducted by the management during the year as compared with the book records.

(c) in our opinion and according to the information and explanations given to us, no substantial part of fixed asset has been disposed during the year and therefore it does not affect the going concern status of the company.

(ii) (a) In our opinion and according to the information and explanations given to us, inventories have been physically verified during the year by the management at reasonable intervals except for the work in progress inventory.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories except for the work in progress inventory. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

(iii) (a) According to the information & explanations given to us, the Company has granted loans to subsidiary companies namely Alchemist Foods Limited and Alchemist Hospitality Group Private Limited (Parties covered in the register maintained under section 301 of the Companies Act, 1956) for which the maximum amount outstanding during the year was Rs. 12185.01 Lacs and Rs. 25.16 Lacs respectively and amount outstanding on 31st March, 2014 was Rs. 12180.26 Lacs and Rs. 25.15 Lacs respectively.

(b) According to the information & explanations given to us, the loans given by the Company are interest free unsecured loans and the loans can be recalled by the Company by giving a prior notice of at least twelve months, subject to concurrence of the loanee. Accordingly the terms of the loans are prima-facie prejudicial to the interest of the Company.

(c) According to the information & explanations given to us, there has been no incidence of default in repayment.

(d) In our opinion and according to the information and explanations given to us, there is no overdue amount in respect of the loan given by the Company.

(e) According to the information & explanations given to us, the Company has taken unsecured loan from KDS Corporation Private Limited and Technology Parks Limited (Party covered in the register maintained under section 301 of the Companies Act, 1956) for which the maximum amount outstanding during the year was Rs. 72555.94 Lacs and Rs. 70460.00 Lacs respectively and amount outstanding on 31st March, 2014 was Rs. 4971.17 Lacs and Rs. 70460.00 Lacs respectively.

(f) According to the information & explanations given to us, the loans accepted by the Company are interest free unsecured loans. The terms of repayment with respect to loan from KDS Corporation Private Limited has not been defined and is repayable on the mutual agreement of both the parties involved. Loan from Technology Parks Limited is repayable on service of a minimum notice of 12 months by the lender for a repayment in excess of Rs. 50.00 Crores, however upon the concurrence of the Company. Hence terms of both the loans prima-facie are not prejudicial to the interest of the Company.

(g) According to the information & explanations given to us, there has been no incidence of default in repayment.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods and services. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed.

(v) a) In our opinion and according to the information and explanations given to us, the transactions made in the pursuance of contracts or arrangements, that need to be entered into the register maintained under section 301 ofthe Companies Act, 1956 for the year have been so entered.

(b) In our opinion and according to the information and explanations given to us, the transaction made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year to Rs. 5.00 Lacs or more in respect of each party have been made at prices which in our opinion, are reasonable having regard to prevailing market price at relevant time.

(vi) The Company has not accepted deposits from the public during the year covered by our audit report. However, the deposits have been repaid during the year. The Company has complied with all the provisions of Section 58Aand 58AAof the Act and the rules framed there under.

(vii) As per information & explanations given by the management, the Company has a separate internal audit department constituting of professionals undertaking audit exercises throughout the year. Accordingly the internal audit system in the Company seems commensurate with its size and the nature of its business.

(viii) We have broadly examined the books of accounts maintained by the Company pursuant to the rules by the Central Government for the maintenance of cost records under section 209 (1 )(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) Based on our audit procedures and on the information and explanations given by the management, we report that undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues, have generally been deposited in time with the appropriate authorities, though there have been slight delays in few cases. According to the information and explanations given to us there was an amount of Rs. 26884/- pertaining to labour cess outstanding as on 31st March, 2014, for a period of more than six months from the date it became payable.

(b) Details of excise duty which has not been deposited as on 31st March, 2014 by the Company on account of dispute is given below:

Name of Nature of Forum Total Amount the Statute the dues where pending involved* (Rs. Lacs)

Central Excise Excise Duty Commissioner 173.55 Act, 1944 of Central Excise Commissionerate, Chandigarh.

Name of Amount paid Period to the Statute under protest which amount (Rs. Lacs) relates

Central Excise 63.13 December, Act, 1944 2007 to September, 2012

* Amount as per demand order, not including interest and penalty as not quantified in the demand order.

(x) The Company does not have any accumulated loss and has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

(xi) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, during the year there have been delays in repayment of dues by the Company to financial institutions, banks or debenture holders. The details of the continuing default as on 31st March, 2014 in repayment of principle and interest is as follows:

Name of Bank Sanction Default Default Default -Type of Loan amount amount cleared cleared as on amount date 31/03/14

Punjab National Bank- 210000000 4484969 4484969 05-04-2014

Project Term Loan

UCO Bank-Vehicle Loan 612000 21222 9017 02-05-2014 12205 27-05-2014

UCO Bank-Vehicle Loan 1143000 50251 15880 02-05-2014 24541 27-05-2014

UCO Bank-Vehicle Loan 716000 41366 9617 02-05-2014 15375 27-05-2014

UCO Bank-Vehicle Loan 529000 28111 - -

Total 213000000 4625919 4571604

Name of Bank Default -Type of Loan outstanding as on 29/05/14 Punjab National Bank- -

Project Term Loan

UCO Bank-Vehicle Loan -

UCO Bank-Vehicle Loan 9830

UCO Bank-Vehicle Loan 16374

UCO Bank-Vehicle Loan 28111

Total 54315

(xii) According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company is not a chit fund or a nidhi/ mutual benefit fund/society. Therefore, the provision of clause 4(xiii) of the Order is not applicable to the Company

(xiv) Based on our audit procedures and on the information and explanation given by the management, the Company is maintaining proper records in respect of transactions and contract, in shares, securities, debentures and other investments and timely entries have been made therein, The shares and other investments have been held by the company in its own name.

(xv) According to the information and explanations given to us, the Company has given guarantees to the tune of Rs. 3597.49 Lacs for loans taken by others from banks and financial institutions, the terms whereof are prima-facie not prejudicial to the interest of the Company.

(xvi) Based on our audit procedures and on the information and explanation given by the management, we report that the term loans have been applied for the purpose for which they were raised.

(xvii) Based on our audit procedures and on the information and explanation given by the management, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

(xviii) According to the information and explanations given to us, the Company has not issued shares to parties and companies covered in the register maintained u/s 301 of the Companies Act, 1956, during the year. Therefore, the provision of clause 4(xviii) of the Order is not applicable to the Company.

(xix) According to the information and explanations given to us, the Company has not issued any secured debentures during the year. Therefore, the provision of clause 4(xix) of the Order is not applicable to the Company.

(xx) During the year, the Company has not raised any money by way of the public issue. Therefore, the provision of clause 4(xx) of the Order is not applicable to the Company.

(xxi) Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

Sd/- C.A. Ashish Chhabra Partner Membership No. 507083 N. Kumar Chhabra & Co. Date: 29 May, 2014 Chartered Accountants Place: New Delhi Firm Registration No. 000837N


Mar 31, 2013

Report on the Financial Statements

We have audited the accompanying financial statements of Alchemist Limited ("the Company") which comprise the Balance Sheet as at March 31, 2013, the Statement of Profit and Loss and Cash Flow Statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management''s Responsibility for the Financial Statements

Management is responsible for the preparation of these financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956 ("the Act"). This responsibility includes the design, implementation and maintenance of internal control 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 Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India. 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 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 control relevant to the Company''s preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by management, 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.

Opinion

In our opinion and to the best of our information and according to the explanations given to us, the financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2013;

b) in the case of the Statement of Profit and Loss, of the profit for the year ended on that date; and

c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor''s Report) Order, 2003 ("the Order") as amended, issued by the Central Government of India in terms of sub-section (4A) of section 227 of the Act, we give in the Annexure a statement on the matters specified in paragraphs 4 and 5 of the Order.

2. As required by section 227(3) of the Act, we report that:

a) we have 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 appears from our examination of those books;

c) the Balance Sheet, Statement of Profit and Loss and Cash Flow Statement dealt with by this Report are in agreement with the books of account;

d) in our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards referred to in sub-section (3C) of section 211 of the Companies Act, 1956; and

e) on the basis of written representations received from the directors as on March 31, 2013, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2013, from being appointed as a director in terms of clause (g) of sub-section (1) of section 274 of the Companies Act, 1956.

ANNEXURE TO THE INDEPENDENT AUDITORS'' REPORT

Referred to in paragraph 1 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 us, the Company has maintained proper records showing full particulars including quantitative details and situation of its fixed assets.

(b) In our opinion and according to the information and explanations given to us, the Company has formulated a regular program of verification by which all the assets of Company have been physically verified. No material discrepancies were noticed on physical verification conducted by the management during the year as compared with the book records.

(c) In our opinion and according to the information and explanations given to us, no substantial part of fixed asset has been disposed during the year and therefore it does not affect the going concern status of the company.

(ii) (a) In our opinion and according to the information and explanations given to us, inventories have been physically verified during the year by the management at reasonable intervals.

(b) In our opinion and according to the information and explanations given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) In our opinion and on the basis of our examination of the records, the Company is generally maintaining proper records of its inventories. No material discrepancy was noticed on physical verification of stocks by the management as compared to book records.

(iii) (a) According to the information & explanations given to us the Company has granted loans to subsidiary companies namely Alchemist Foods Limited, Alchemist Infrastructure Private Limited and Alchemist Hospitality Group Limited (Parties covered in the register maintained under section 301 of the Companies Act, 1956) for which the maximum amount outstanding during the year was Rs. 12425.02 Lacs, Rs. 237.50 Lacs and Rs. 1500.00 Lacs respectively and amount outstanding on 31st March, 2013 was Rs. 9772.66 Lac, Rs. 237.50 Lacs and Rs. 25.00 Lacs respectively. The Company has taken unsecured loan from KDS Corporation Pvt. Ltd. (Party covered in the register maintained under section 301 of the Companies Act, 1956) for which the maximum amount outstanding during the year was Rs. 35237.68 Lacs and amount outstanding on 31st March, 2013 was Rs 26737.68 Lacs.

(b) The loan taken/given by the company are interest-free and the other terms and conditions of the loan taken/given by the company from/to parties covered in registered maintained under Section 301 are not prima-facie prejudicial to the interest of the Company.

(c) The terms of the repayment for both the loan taken and given have not been defined and are repayable/receivable on the mutual agreement of both the parties involved.

(d) In our opinion and according to the information and explanations given to us, there is no overdue amount in respect of the loan taken/given by the Company.

(iv) In our opinion and according to the information and explanations given to us, there is an adequate internal control procedure commensurate with the size of the Company and the nature of its business, for the purchase of inventories & fixed assets and payment for expenses & for sale of goods. During the course of our audit, no major instance of continuing failure to correct any weaknesses in the internal controls has been noticed. (v) a) In our opinion and according to the information and explanations given to us, the transactions made in the pursuance of contracts or arrangements, that need to be entered into the register maintained under section 301 of the Companies Act, 1956 for the year have been so entered. (b) In our opinion and according to the information and explanations given to us, the transaction made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year to Rs. 5.00 Lacs or more in respect of each party have been made at prices which in our opinion, are reasonable having regard to prevailing market price at relevant time. (vi) The Company has not accepted deposits from the public during the year covered by our audit report. However, the deposits have been repaid during the year and also the balance stands in the books at the year end. The Company has complied with all the provisions of Section 58A and 58AA of the Act and the rules framed there under.

(vii) As per information & explanations given by the management, the Company has a separate internal audit department constituting of professionals undertaking audit exercises throughout the year. Accordingly the internal audit system in the Company seems commensurate with its size and the nature of its business.

(viii) We have broadly examined the books of accounts maintained by the Company pursuant to the rules by the Central Government for the maintenance of cost records under section 209 (1)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and records have been made and maintained. We have however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) Based on our audit procedures and on the information and explanations given by the management, we report that undisputed statutory dues including Provident Fund, Investor Education and Protection Fund, Employees'' State Insurance, Income-tax, Sales-tax, Wealth Tax, Service Tax, Custom Duty, Excise Duty, cess to the extent applicable and any other statutory dues have generally been regularly deposited with the appropriate authorities, though there have been slight delays in few cases. According to the information and explanations given to us there were no outstanding statutory dues as on 31st of March, 2013 for a period of more than six months from the date they became payable.

(b) Details of excise duty which has not been deposited as on 31st March, 2013 by the Company on account of dispute is given below:

Name of Nature of Forum Total Amount Amount paid Period to the Statute the dues where pending involved* under protest which amount (Rs. Lacs) (Rs. Lacs) relates

Central Excise Excise Duty Commissioner 173.55 63.13 December, Act, 1944 of Central Excise 2007 to Commissionerate, September, Chandigarh 2012

* Amount as per demand order, not including interest and penalty as not quantified in the demand order.

(x) The Company does not have any accumulated loss and has not incurred cash loss during the financial year covered by our audit and in the immediately preceding financial year.

(xi) Based on our audit procedures and on the information and explanations given by the management, we are of the opinion that, the Company has not defaulted in repayment of dues to a financial institution, bank or debenture holders.

(xii) According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xii) The Company is not a chit fund or a nidhi/mutual benefit fund/society. Therefore, the provision of clause 4(xiii) of the Order is not applicable to the Company.

(xiv) Based on our audit procedures and on the information and explanation given by the management, we report that the Company is not dealing or trading in Shares, Securities, Debentures & other Investments. Therefore, the provision of clause 4(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us, the Company has given guarantees to the tune of Rs. 3049.45 Lacs for loans taken by others from banks and financial institutions, the terms whereof are prima-facie not prejudicial to the interest of the Company.

(xvi) Based on our audit procedures and on the information and explanation given by the management, we report that the term loans have been applied for the purpose for which they were raised.

(xvii) Based on our audit procedures and on the information and explanation given by the management, we report that no funds raised on short-term basis have been used for long-term investment by the Company.

(xviii) The Company has made preferential allotment of 6,75,000 shares to KDS Corporation Pvt. Ltd., Company covered in the register maintained u/s 301 of the Companies Act, 1956, during the year. In our opinion the price at which shares have been issued is not prejudicial to the interest of the Company.

(xix) According to the information and explanations given to us, the Company has not issued any secured debentures during the year. Therefore, the provision of clause 4(xix) of the Order is not applicable to the Company.

(xx) During the year, the Company has not raised any money by way of the public issue.

(xxi) Based on the audit procedures performed and the information and explanations given to us, we report that no fraud on or by the Company has been noticed or reported during the year, nor have we been informed of such case by the management.

Sd/-

C.A. Ashish Chhabra

Partner

Membership No. 507083

N. Kumar Chhabra & Co.

Date: 30 May, 2013 Chartered Accountants

Place: New Delhi Firm Registration No. 000837N


Mar 31, 2012

We have audited the Balance Sheet of Alchemist Limited as at 31st March, 2012, the related Statement of Profit and Loss and Cash Flow Statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our Audit.

We conducted our audit in accordance with auditing standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We Report that:

1. As required by the Companies (Auditors' Report) Order, 2003 as amended by the Companies (Auditor's Report) Amendment Order, 2004, issued by the Central Government of India in terms Section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in Paragraph 4 & 5 of the said order.

2. Further to our comments in the Annexure referred to in paragraph 1 above, we report that:

(i) We have obtained all the information and explanations, which to the best of our knowledge and belief were necessary for the purpose of our audit

(ii) In our opinion the proper books of account, as required by law, have been kept by the Company, so far as appears from our examination of those books of account.

(iii) The Balance Sheet, Statement of Profit and Loss and Cash Flow Statement are in agreement with the books of account;

(iv) Based on representations received from the Directors as on 31st March, 2012 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March 2012 from being appointed as a Director in terms of clause(g) of sub-section(1) of section 274 of the Companies Act, 1956;

(v) In our opinion and to the best of our information and according to the explanations given to us, the financial statement dealt within by this report comply with the Accounting Standards referred to in Sub Section (3C) of Section 211 of the Act and give the information required by the act , in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of the Balance Sheet, of the state of the company's affairs as at 31s1 March, 2012.

(b) in the case of the Statement of Profit & Loss, of the Profit of the Company for the year ended on that date and,

(c) in the case of Cash Flow Statement of the cash flow for the year ended on that date.

ANNEXURE TO THE AUDITORS' REPORT

Referred to in Paragraph 1 of the Auditor's Report to the Members of the company as required by the Companies (Auditors' Report) Order, 2003 as amended by the companies (Auditor's Report) Amendment Order, 2004, issued by the Central Government of India and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that: (i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The company has formulated a regular program of verification by which all the assets of company have been physically verified. No material discrepancies were noticed on physical verification conducted by the management during the year as compared with the book records.

(c) There was no disposal of a substantial part of fixed assets.

(ii) (a) The physical verification of stocks of finished goods, stores, spare parts and raw materials was carried out during the year by the management.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventories followed by the management was reasonable and adequate in relation to the size of the company and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of operations of the company.

(iii) (a) According to the information & explanations given to us the company has granted loans to Subsidiary Company, Alchemist Foods Limited (Party covered in the register maintained under section 301 of the Companies Act, 1956) for which the maximum amount outstanding during the year was Rs. 11813.43 Lac and amount outstanding on 31st March, 2012 was Rs. 11774.38 Lac, also granted loan to subsidiary company, Alchemist Infrastructures Pvt. Ltd. (Party covered in the register maintained under section 301 of the Companies Act, 1956) for which the maximum amount outstanding during the year was Rs. 7.50 Lacs and amount outstanding on 31st March 2012, was Rs. 7.50 Lacs and also the Company has taken unsecured loan from KDS Corporation Pvt. Ltd. (Party covered in the register maintained under section 301 of the Companies Act, 1956) for which the maximum amount outstanding during the year was Rs. 37561.69 Lacs and amount outstanding on 31 st March, 2012 was Rs 27917.69 Lacs.

(b) The Company has taken/given interest free loans and other term and conditions of the loan taken/ given by the company to/from parties covered in register maintained under Section 301 are not prima-facie prejudicial to the interest of the company.

(c) The company is regular in repayment.

(d) There is no overdue amount in respect of the loan taken/given by the company.

(iv) In our opinion, the internal control procedures are adequate and commensurate with the size and the nature of its business for purchase of inventories and fixed assets and with regard to the sale of goods. (v) (a) In our opinion and according to the information and explanations given to us, the transactions made in the pursuance of contracts or arrangements, that need to be entered into the register maintained under section 301 of the Companies Act, 1956 for the year have been so entered. (b) In our opinion and according to the information and explanations given to us, the transaction made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956 aggregating during the year to Rs.5,00,000/- or more in respect of each party have been made at prices which in our opinion, are reasonable having regard to prevailing market price at relevant time.

(vi) The Company has not accepted deposits from the public during the year covered by our audit report. However, the deposits have been repaid during the year and also the balance stands in the books at the year end, the Company has complied with the provisions of Section 58Aand 58AAof the Act and the rules framed there under.

(vii) In our opinion, the Company has an internal audit system commensurate with the size and nature of its business. (viii) We have broadly examined the books of account maintained by the company pursuant to the rules by the Central Government for the maintenance of cost records under section 209 (l)(d) of the Companies Act, 1956 and are of the opinion that, prima facie, the prescribed accounts and record have been made and maintained. We have however, not made a detailed examination of the records with a view to determine whether they are accurate or complete.

(ix) (a) Undisputed Statutory dues including provident fund, investors education and protection fund, employees state insurance, income tax, sales tax, wealth tax, service-tax, customs duty, excise duty, cess and other material statutory dues, as applicable, have generally been regularly deposited with the appropriate authorities, though there has been a slight delay in the few cases. No undisputed amount payable in respect thereof were outstanding at the year-end for a period of more than six month from the date they became payable.

(b) According to the information and explanations given to us, there are no dues outstanding in respect of Sales tax, Income tax, Customs Duty, Excise Duty, Cess and any other Statutory Dues to be deposited on account of any dispute.

(x) The company has no accumulated losses and has not incurred any cash losses during the financial year and in the immediately preceding financial year.

(xi) According to the information and explanations given to us, the Company has not defaulted in repayment of dues to financial institutions, banks and other securities.

(xii) According to the information and explanations given to us, the Company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The Company in not a Chit fund or a nidhi/mutual benefits fund/society. Therefore the provisions of Clause 4(xiii) of the Order are not applicable to the company.

(xiv) According to the information and explanations given to us, the company is not dealing or trading in shares, securities and debentures. Therefore, provisions of clause 4(xiv) of the Order are not applicable to the Company.

(xv) In our opinion and according to the information & explanation given to us, the terms and conditions on which the company has given guarantee to the tune of Rs. 1877 Lacs for loans taken by others from banks and financial institutions are prima-facie not prejudicial to the interest of the company.

(xvi) In our opinions and according to the information and explanation given to us, the term loans have been applied for the purpose for which they were raised

(xvii) According to the information and explanations given to us, and on an overall examination of the Balance sheet of the Company, we report that no funds raised on short term basis have been utilized for long term investments and vice versa.

(xviii) The Company has made preferential allotment of 6,40,000 shares to KDS Corporation Pvt. Ltd., Company covered in the register maintained u/s301 of the Companies Act, 1956, during the year. In our opinion the price at which shares have been issued is not prejudicial to the interest of the company.

(xix) According to the information and explanations given to us, the Company has not issued any secured debentures during the year. Accordingly, the provision of Clause (xix) of the Order is not applicable to the Company.

(xx) During the year, the Company has not raised any money by way of the public issue.

(xxi) To the best of our knowledge and belief and according to the information and explanation given to us, no fraud on or by the company has been noticed or reported during the year.

sd/-

CA. Ashish Chhabra

Partner

Membership No: 507083

N. Kumar Chhabra & Co.

Dated: 30th August,2012 Chartered Accountants

Place: New Delhi Firm Registration No: 000837N


Mar 31, 2011

We have audited the Balance Sheet of ALCHEMIST LIMITED as at 31st March, 2011 and the related Profit and Loss Account and cash flow statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Company's Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the Auditing Standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We Report that:

1. As required by the Companies (Auditors' Report) Order, 2003 as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in Paragraphs 4 and 5 of the said order.

2. Furthertoourcomments in theAnnexure referred to in paragraph 1 above, we report that:

i) we have obtained all the information and explanations, which to the best of our knowledge and belief, were necessary for the purpose of our audit.

ii) In our opinion, proper books of accounts, as required by law, have been kept by the Company, so far as appears from our examination of those books of accounts.

iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement are in agreement with the books of accounts.

iv) In our opinion the Balance Sheet & Profit and Loss Account and the cash flow statement comply with the Accounting Standards referred to section 211 (3C) of the Companies Act, 1956.

v) Based on representations received from the Directors as on 31st March, 2011 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2011 from being appointed as a director in terms of clause [g] of sub section [1] of Section 274 of the Companies Act, 1956.

vi) The accounts of the company has been prepared on a going concern basis.

vii) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts read with notes thereon and attached thereto, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of Balance Sheet, of the state of company's affairs as at 31st March,2011,

(b) in the case of Profit & Loss Account, of the Profit of the Company for the year ended on that date and

(c) in the case of Cash Flow Statement of the cash flow for the year ended on that date.

Annexure to the Auditors' Report

Referred to in Paragraph 1 of the Auditors' Report to the Members of the company as required by the Companies (Auditors' Report) Order, 2003 as amended by the Companies (Auditor's Report) (Amendment) Order, 2004 issued by the Central Government of India and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that:

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The company has formulated a regular program of verification by which all the assets of company have been physically verified. No material discrepancies were noticed on physical verification conducted by the management during the year as compared with the book records.

(c) There was no disposal of a substantial part of fixed assets.

(ii) (a) The physical verification of stocks of finished goods, stores, spare parts and raw materials

was carried out during the year by the management.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventories followed by the management was reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of operations of the company.

(iii) (a) According to the information & explanations given to us the company has granted loans to Subsidiary Company, Alchemist Foods Limited (Party covered in the register maintained under section 301 of the Companies Act, 1956) for which the maximum amount outstanding during the year was Rs. 16779.66 Lac and amount outstanding on 31st March, 2011 was Rs. 7638.08 Lac and also the Company has taken unsecured loan from KDS Corporation Pvt. Ltd., (Party covered in the register maintained under section 301 of the Companies Act, 1956) for which the maximum amount outstanding during the year was Rs. 14331.68 Lacs and amount outstanding on 31st March, 2011 was Rs. 13481.68 Lacs.

(b) The Company has taken/given interest free loans and other term and conditions of the loan taken/given by the company to/from parties covered in register maintained under Section 301 are not prima-facie prejudicial to the interest of the company.

(c) The company is regular in repayment.

(d) There is no overdue amount in respect of the loan taken/given by the company.

(iv) In our opinion, the internal control procedures are adequate and commensurate with the size and the nature of its business for purchase of inventories and fixed assets and with regard to the sale of goods.

(v) (a) In our opinion and according to the information and explanations given to us, the transactions made in the pursuance of contracts or arrangements, that need to be entered into the register maintained under section 301 of the Companies Act, 1956 for the year have been so entered.

(b) In our opinion and according to the information and explanation given to us, the transaction

made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956, aggregating during the year to Rs. 5,00,000/- or more in respect of each party have been made at prices which in our opinion, are reasonable having regard to prevailing market price at the releventtime.

(vi) The company has accepted deposits from the public during the year covered by our audit report. However, the deposits have been repaid during the year and also the balance stand in the books at the year end the company has complied with the provisions of Section 58A and 58AA of the Act and the rules framed there under.

(vii) in our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, the Central Govt has not prescribed any records to be maintained under section 209(1 )(d) of the Companies Act, 1956.

(ix) (a) According to the records available with the company, the company was regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Custom Duty, Excise Duty and Cess and any other Statutory Dues. According to the information & explanation given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at 31 st March, 2011, for a period of more than six months from the date they become payable.

(b) According to the information and explanations given to us, there are no dues of sale tax, income tax, custom duty, excise duty, cess and any other statutory dues to be deposited on account of any dispute.

(x) The company has no accumulated losses and has not incurred any cash losses during the financial year and in the immediately preceding financial year.

(xi) According to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks and other securities.

(xii) According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The company is not a Chit fund or a nidhi/mutual benefit fund/society. Therefore the provisions of Clause 4(xiii) of the Order are not applicable to the company.

(xiv) According to the information and explanations given to us, the company is not dealing in shares, securities and debentures. Therefore, provisions of clause 4(xiv) of the Order are not applicable to the company.

(xv) In our opinion and according to the information and explanation given to us, the terms and conditions on which the company has given corporate guarantee to the tune of Rs.1877 Lacs for loans taken by others from banks and financial institutions are prima-facie not prejudicial to the interest of the company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the company, we report that no funds raised on short term basis have been utilised for long term investment and vice versa.

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment during the year.

(xix) According to the information and explanations given to us, the company has not issued any secured debentures during the year. Accordingly, the provisions of Clause (xix) of the Order is not applicable to the company.

(xx) During the year, the company has not raised any money by way of a pubic issue.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year, that causes the financial statement to be materially mis stated.

C A. Ashish Chhabra

Partner

Membership No.: 507083

N.KUMAR CHHABRA & CO.

Date : 1st September, 2011 Chartered Accountants

Place : New Delhi Firm Registration No. 000837N


Mar 31, 2010

We have audited the Balance Sheet of ALCHEMIST LIMITED as at 31st March, 2010 and the related Profit and Loss Account and cash flow statement for the year ended on that date, annexed thereto. These financial statements are the responsibility of the Companys Management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the Auditing Standards generally accepted in India. These standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by the management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

We Report that:

1. As required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India in terms of section 227(4A) of the Companies Act, 1956, we enclose in the annexure a statement on the matters specified in Paragraphs 4 and 5 of the said order.

2. Further to our comments in the Annexure referred to in paragraph 1 above, we report that:

i) we have obtained ail the information and explanations, which to the best of our knowledge and belief, were necessary for the purpose of our audit.

ii) In our opinion, proper books of accounts, as required by law, have been kept by the Company, so far as appears from our examination of those books of accounts.

iii) The Balance Sheet, Profit and Loss Account and Cash Flow Statement are in agreement with the books of accounts.

iv) In our opinion the Balance Sheet & Profit and Loss Account comply with the Accounting Standards referred to section 211 (3C) of the Companies Act, 1956.

v) Based on representations received from the Directors as on 31st March, 2010 and taken on record by the Board of Directors, we report that none of the Directors is disqualified as on 31st March, 2010 from being appointed as a director in terms of clause [g] of sub section [1] of Section 274 of the Companies Act, 1956.

vi) The accounts of the company has been prepared on a going concern basis.

vii) In our opinion, and to the best of our information and according to the explanations given to us, the said accounts read with notes thereon and attached thereto, give the information required by the Companies Act, 1956, in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India:

(a) in the case of Balance Sheet, of the state of Companys affairs as at 31st March, 2010,

(b) in the case of Profit & Loss Account, of the Profit of the Company for the year ended on that date and

(c) in the case of Cash Flow Statement of the cash flow for the year ended on that date.

Annexure to the Auditors Report

Referred to in Paragraph 1 of the Auditors Report to the Members of the company as required by the Companies (Auditors Report) Order, 2003 as amended by the Companies (Auditors Report) (Amendment) Order, 2004 issued by the Central Government of India and on the basis of such checks as we considered appropriate and according to the information and explanations given to us, we further report that:

(i) (a) The company has maintained proper records showing full particulars including quantitative details and situation of fixed assets.

(b) The company has formulated a regular program of verification by which all the assets of company have been physically verified. No material discrepancies were noticed on physical verification conducted by the managementduring the year as compared with the book records.

(c) There was no disposal of a substantial part of fixed assets.

(ii) (a) The physical verification of stocks of finished goods, stores, spare parts and raw materials was carried out during the year by the management.

(b) In our opinion and according to the information and explanations given to us, the procedure of physical verification of inventories followed by the management was reasonable and adequate in relation to the size of the Company and the nature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticed on verification between the physical stocks and the book records were not material having regard to the size of operations of the company.

(iii) (a) According to the information & explanations given to us the company has granted loans to Subsidiary Company, Alchemist Foods Limited (Party covered in the register maintained under section 301 of the Companies Act, 1956) for which the maximum amount outstanding during the year was Rs.414.00 Lac and amount outstanding on 31st March, 2010 was Rs.414.00 Lac and also the Company has taken unsecured loan from KDS Corporation Pvt. Ltd., (Party covered in the register maintained under section 301 of the Companies Act, 1956) for which the maximum amount outstanding during the year was Rs.6191.69 Lacs and amount outstanding on 31st March, 2010 was Rs.2471.69 Lacs.

(b) The Company has taken/given interest free loans and other term and conditions of the loan taken/given by the company to/from parties covered in register maintained under Section 301 are not prima-facie prejudicial to the interest of the company.

(c) The company is regular in repayment.

(d) There is no overdue amount in respect of the loan taken/given by the company.

(iv) In our opinion, the internal control procedures are adequate and commensurate with the size and the nature of its business for purchase of inventories and fixed assets and with regard to the sale of goods.

(v) (a) In our opinion and according to the information and explanations given to us, the transactions made in the pursuance of contracts or arrangements, that need to be entered into the register maintained under section 301 of the Companies Act, 1956 for the year have been so entered.

(b) In our opinion and according to the information and explanation given to us, the transaction made in pursuance of contracts or arrangements entered in the register maintained under section 301 of the Companies Act, 1956, aggregating during the year to Rs.5,00,000/- or more in respect of each party have been made at prices which in our opinion, are reasonable having regard to prevailing market price at the relevent time.

(vi) The company has accepted deposits from the public during the year covered by our audit report. The company has complied with the provisions of Section 58A and 58AA of the Act and the rules framed there under.

(vii) In our opinion, the company has an internal audit system commensurate with the size and nature of its business.

(viii) According to the information and explanations given to us, the Central Govt has not prescribed any records to be maintained under section 209(1 )(d) of the Companies Act, 1956.

(ix) (a) According to the records available with the company, the company was regular in depositing with appropriate authorities undisputed statutory dues including Provident Fund, Employees State Insurance, Income Tax, Sales Tax, Custom Duty, Excise Duty and Cess and any other Statutory Dues. According to the information & explanation given to us, no undisputed amount payable in respect of the aforesaid dues were outstanding as at 31 st March, 2010, for a period of more than 6 months from the date they become payable.

(b) According to the information and explanations given to us, there are no dues of sale tax, income tax, custom duty, excise duty, cess and any other statutory dues to be deposited on account of any dispute.

(x) The company has no accumulated losses and has not incurred any cash losses during the financial year and in the immediately preceding financial year.

(xi) According to the information and explanations given to us, the company has not defaulted in repayment of dues to financial institutions, banks and other securities.

(xii) According to the information and explanations given to us, the company has not granted loans and advances on the basis of security by way of pledge of shares, debentures and other securities.

(xiii) The company is not a Chit fund or a nidhi/mutual benefit fund/society. Therefore the provisions of Clause 4(xiii) of the Order are not applicable to the company.

(xiv) According to the information and explanations given to us, the company is not dealing in shares, securities and debentures. Therefore, provisions of clause 4(xiv) of the Order are not applicable to the company.

(xv) In our opinion and according to the information and explanation given to us, the terms and conditions on which the company has given corporate guarantee to the tune of Rs.1877 Lacs for loans taken by others from banks and financial institutions are prima-facie not prejudicial to the interest of the company.

(xvi) In our opinion and according to the information and explanations given to us, the term loans have been applied for the purpose for which they were raised.

(xvii) According to the information and explanations given to us, and on an overall examination of the Balance Sheet of the company, we report that no funds raised on short term basis have been utilised for long term investment and vice versa.

(xviii) According to the information and explanations given to us, the company has not made any preferential allotment during the year.

(xix) According to the information and explanations given to us, the company has not issued any secured debentures during the year. Accordingly, the provisions of Clause (xix) of the Order is not applicable to the company.

(xx) During the year, the company has not raised any money by way of a pubic issue.

(xxi) To the best of our knowledge and belief and according to the information and explanations given to us, no fraud on or by the company has been noticed or reported during the year, that causes the financial statement to be materially mis stated.

CA. Ashish Chhabra

Partner

Membership No. : 507083

N.KUMAR CHHABRA & CO.

Date : 27th August, 2010 Chartered Accountants

Place : New Delhi Firm Registration No. 000837N