The Members of Intec Capital Limited
Report on the Financial Statements
We have audited the accompanying standalone financial statements of Intec CapitalLimited ("the Company") which comprise the Balance Sheet as at March 31 2017the Statement of Profit and Loss and Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
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 preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance withaccounting principles generally accepted in India including the Accounting Standardsspecified under section 133 of the Act and the Companies (Accounting Standards) AmendmentRules 2016. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
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 accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder. We conducted our audit inaccordance with the Standards on Auditing issued by the Institute of CharteredAccountants of India as specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders 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 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 issufficient and appropriate to provide a basis for our audit opinion on the standalonefinancial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the standalone financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2017 its profit/loss and its cash flows for the year ended on that date.
Emphasis of Matter
(a) Without qualifying our opinion we draw attention to note 2.30 to the financialresults. The Company has obtained the shareholder's approval for payment of managerialremuneration upto 11% of the limits as specified under section 197 and 198 of theCompanies Act 2013 ("the Act") and an amount of Rs. 17.03 lakhs is charged tostatement of Profit & Loss account for year ended March 31 2017 as a managerialremuneration. Pending approval from the Central Government for payment of excessmanagerial remuneration of Rs. 112.97 lakhs over and above 11% of the limits as specifiedunder section 197 and 198 of the Act the excess amount paid is shown as an advance to theManaging Director and the Company is in process of recovering the same.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure 1 a statement on the matters specified in paragraphs 3and 4 of the Order.
2. As required by section 143 (3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof 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 theCompany so far as it appears from our examination of those books;
(c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account;
(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 and the Companies (Accounting Standards) Amendment Rules2016;
(e) On the basis of written representations received from the directors as on March 312017 and taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of section 164 (2) ofthe Act;
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure 2" to this report;
(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 2.26 (iv) to the standalone financialstatements;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company; and
iv. The Company has disclosed in Note 2.32 to the financial statements the holding ofSpecified Bank Notes on November 8 2016 and December 30 2016 ('the Period') as well asthe dealings in Specified Bank Notes during the Period. Based on our audit proceduresperformed and management representations obtained with regard to the holding and nature ofcash transactions including those in Specified Bank Notes we report that thesedisclosures are in accordance with the books of account maintained by the Company and asproduced to us by the management except as mentioned below. We report that the Companyhas received amount aggregating Rs. 15.23 lakhs from borrowers which were not permitted.
Further we report that we were not made available sufficient appropriate auditevidence for denomination wise details and accordingly do not comment on the following:
a) Details of amount exchanged Rs. 36.55 lakhs of Specified Bank Notes (SBN) with otherdenomination notes with the banks during the period November 8 2016 to December 30 2016;and
b) Denomination wise details of petty cash expenses incurred of Rs. 2.85 lacs forpayment made during the period from November 9 2016 to December 30 2016.
For S.R. Batliboi & Associates LLP
ICAI Firm Registration Number: 101049W/E300004
Membership Number: 094533
Place of Signature: Jaipur
Date: May 26 2017
Annexure 1 referred to in paragraph 1 under the heading "Report on other legal andregulatory requirements" of our report of even date
Re: Intec Capital Limited ('the Company')
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets except for fixed assets of Rs. 24.82lacs for which the records are maintained for group of similar assets and not for eachindividual asset.
(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.
(c) According to the information and explanations given by the management the titledeeds of immovable properties included in fixed assets are held in the name of theCompany.
(ii) The Company's business does not involve inventories and accordingly therequirements under paragraph 3(ii) of the Order are not applicable to the Company.
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013. Accordingly the provisions of clause 3(iii)(a) (b) and (c) of theOrder are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Companies Act 2013 in respect of loans todirectors including entities in which they are interested and in respect of loans andadvances given investments made and guarantees and securities given have been compliedwith by the company.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.
(vi) To the best of our knowledge and as explained the Company is not in the businessof sale of any goods. Therefore in our opinion the provisions of clause 3(vi) of theOrder are not applicable to the Company.
(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales- tax service tax duty of custom duty of excise valueadded tax cess and other material statutory dues have generally been regularly depositedwith the appropriate authorities.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax servicetax sales-tax duty of custom duty of excise value added tax cess and other statutorydues were outstanding at the year end for a period of more than six months from the datethey became payable.
(c) According to the information and explanations given to us there are no dues ofincome tax sales- tax service tax customs duty excise duty value added tax and cesswhich have not been deposited on account of any dispute.
(viii) In our opinion and according to the information and explanations given by themanagement the Company has not defaulted in repayment of dues to a financial institutionbank or debenture holders or government.
(ix) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not raised any money by way of initialpublic offer or further public offer hence not commented upon.
Further monies raised by the Company by way of term loans were applied for the purposefor which those were raised though idle/surplus funds which were not required forimmediate utilization were gainfully invested in liquid assets payable on demand.
(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the company or no fraud on the companyby the officers and employees of the Company has been noticed or reported during the year.
(xi) Based on our audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that the Company has obtained the shareholder'sapproval for payment of managerial remuneration upto 11% of the limits as specified undersection 197 and 198 of Companies Act 2013 (Act) and an amount of Rs. 17.03 lakhs ischarged to statement of Profit & Loss account for year ended March 31 2017 as amanagerial remuneration. Pending approval from the Central Government for payment ofexcess managerial remuneration of Rs. 112.97 lakhs over and above 11% of the limits asspecified under section 197 and 198 of the Act the excess amount paid is shown as anadvance to the managing director which is detailed as under:
|S. No. Name of the Director MD WTD or any other person to whom remuneration is provided or paid which is not in accordance with section 197 ||Amount involved (in excess of the limit prescribed) ||Amount due for recovery as at Balance sheet date ||Steps taken to recover the amount ||Remarks |
|1 Mr. Sanjeev Goel ||Rs. 9.29 lakhs ||Rs. 112.97 lakhs ||See Remarks ||The Company has obtained the approval from the Shareholders in the annual general meeting held on September 24 2016. Further excess paid to be recovered from salary. |
(xii) In our opinion the Company is not a nidhi company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe company and not commented upon.
(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of Companies Act 2013.
(xvi) According to the information and explanations given to us we report that theCompany has registered as required under section 45-IA of the Reserve Bank of India Act1934.
For S.R. BATLIBOI & ASSOCIATES LLP
ICAI Firm Registration Number: 101049W/E300004
Membership Number: 094533
Place of Signature: Jaipur
Date: May 26 2017