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Roselabs Finance Ltd.

BSE: 531324 Sector: Financials
NSE: N.A. ISIN Code: INE475C01012
BSE LIVE 13:30 | 17 Nov 20.20 -1.05
(-4.94%)
OPEN

20.20

HIGH

20.20

LOW

20.20

NSE 05:30 | 01 Jan Stock Is Not Traded.
OPEN 20.20
PREVIOUS CLOSE 21.25
VOLUME 200
52-Week high 58.90
52-Week low 19.35
P/E
Mkt Cap.(Rs cr) 20
Buy Price 0.00
Buy Qty 0.00
Sell Price 22.30
Sell Qty 100.00
OPEN 20.20
CLOSE 21.25
VOLUME 200
52-Week high 58.90
52-Week low 19.35
P/E
Mkt Cap.(Rs cr) 20
Buy Price 0.00
Buy Qty 0.00
Sell Price 22.30
Sell Qty 100.00

Roselabs Finance Ltd. (ROSELABSFIN) - Auditors Report

Company auditors report

INDEPENDENT AUDITOR'S REPORT

To the Members of Roselabs Finance Limited Report on the Financial Statements

We have audited the accompanying financial statements of Roselabs Finance Limited("the Company") which comprise the Balance Sheet as at 31st March2017 the Statement of Profit and Loss and the Cash Flow Statement for the year thenended and a summary 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 financial statements that give financialperformance trueandfairviewoftheposition and cash flows of the Company in accordance with accounting principles generallyaccepted in India including the Accounting Standards specified under Section 133 of theAct read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

Auditor's Responsibility

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control that give a truerelevanttotheCompany'spreparationofthe financial and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of the accounting policies used and the reasonableness of theaccounting estimates made by the Company's Directors as well as evaluating the overallpresentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis on the financial statements.

Basis of Qualified Opinion

Trade receivables of Rs. 1200 Lakhs are doubtful of recovery and have not beenprovided for in the books of account. Had the aforesaid provision been considered by theCompany the Net loss for the year would have been higher by the said amount. This matterwas also qualified in our limited review report for the quarter ended September 30 2016and December 31 limited review report of the predecessor auditors on the financialresults for the quarter ended 30 th June 2016.

Qualified Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above the aforesaid financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2017 and its loss and its cash flows for the year ended onthat date.

Emphasis of Matters

We draw attention to the following matters in the Notes to the financial statements: a)Receipt of Income tax demand of Rs. 119.74 lakhs towards penalties under Section 271D ofthe Income Tax Act 1961 and the Company has filed appeal there against with Commissionerof Income Tax (Appeals) Mumbai. No provision has been made for the same as in theopinion of the management based on expert opinion obtained and decision by the AppellateTribunals and Courts in similar matter the same is not sustainable. b) The Company hasreceived letter from Reserve Bank of India (RBI) dated 24th August 2016 suggesting toapply for voluntary exit from NBFC Business due to Net Owned Fund (NOF) being negative.However the Company has replied to RBI vide letter dated 20th September 2016 along withbusiness plan for increasing the Net Owned Funds. As on March 31 2017 the Company's NOFis negative.

Our opinion is not qualified in respect of these matter.

Other Matter a) The financial statements of the Company for the year ended 31stMarch 2016 were audited by another auditor whose report dated May 30 2016expressed an unmodified opinion on those statements.

Report on Other Legal and Regulatory Requirements

1. 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 purposes of our audit.

(b) Except for the effects of the matter described in the Basis for Qualified Opinionparagraph above in our opinion proper books of account as required by law have been keptby 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 Statementdealt 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 Opinionparagraph above in our opinion the aforesaid financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) In our opinion there are no matters that may have an adverse effect on thefunctioning of the Company

(f) On the basis of the written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 st March 2017 from being appointed as a director interms of Section 164 (2) of the Act.

(g) 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 A'

(h) 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 23(1) to the financial statements.

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

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the

Company.

iv. The Company did not have any holdings or dealings in Specified Bank Notes duringthe period from 8 th November 2016 to 30th December 2016 Refer Note (23(8) of thefinancial statements)

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of subsection 11 of section 143 of the Act wegive in the ‘Annexure B' a statementonthemattersspecifiedin paragraphs 3 and 4 ofthe Order.

For MZSK & Associates
Chartered Accountants
Firm Registration No. 105047W
Abuali Darukhanawala
Place : Mumbai Partner
Date : 30th May 2017 Membership No. 108053

ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF ROSELABS FINANCE LIMITED

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of RoselabsFinance Limited ("the Company") as of March 31 2017 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI) (the "GuidanceNote". These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to Company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. financialreporting included obtaining Ourauditofinternalcontrolsover reporting assessing the risk that a materialanunderstandingofinternalfinancialcontrolsoverfinancial weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriateCompany's internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financialcontrol over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financialstatements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a materialeffect statements . onthe financial

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financialcontrolsover financialreporting were operating effectively as at March 31 2017 based on theinternal control over financialreporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note.

For MZSK & Associates
Chartered Accountants
Firm Registration No. 105047W
Abuali Darukhanawala
Place : Mumbai Partner
Date : 30th May 2017 Membership No. 108053

ANNEXURE B TO INDEPENDENT AUDITORS' REPORT

Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' in the Independent Auditors' Report of even date to the members of RoselabsFinance Limited on the financial statements for the year ended 31st March 2017

i. The Company does not have any fixed assets. Accordingly the provisions stated inparagraph 3(i) (a) to (c) of the Order are not applicable to the Company.

ii. The inventory has been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable. No material discrepancies werenoticed on verification between the physical stock and the book records.

iii. The Company has not granted any loans secured or unsecured to Companies FirmsLimited Liability Partnerships (LLP) or other parties covered in the register maintainedunder section 189 of the Companies Act 2013 (‘the Act'). Accordingly the provisionsstated in paragraph 3 (iii) (a) to (c) of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanations given to us theCompany has not either directly or indirectly granted any loan to any of its directors orto any other person in whom the director is interested in accordance with the provisionsof section 185 of the Act and the Company has not made investments through more than twolayers of investment companies in accordance with the provisions of section 186 of theAct. Accordingly provisions stated in paragraph 3(iv) of the Order are not applicable tothe Company.

v. In our opinion and according to the information and explanations given to us thereare no amounts outstanding which are in the nature of deposits as on 31stMarch 2017 and the Company has not accepted any deposits during the year.

vi. The provisions of sub-section (1) of section 148 of the Act are not applicable tothe Company as the Central Government of India has not specified the maintenance of costrecords for any of the products of the Company. Accordingly the provisions stated inparagraph 3 (vi) of the Order are not applicable to the Company.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is regular in depositing withappropriate authorities undisputed statutory dues including provident fund employees'state insurance income-tax service tax value added tax cess and any other statutorydues applicable to it.

(b) According to the information and explanation given to us and the records of theCompany examined by us there are no dues of income tax service tax value added taxcess and any other statutory dues which have not been deposited on account of any dispute.

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in repayment of

dues to the financial institution bank or debenture holders.

ix. The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordingly theprovisions stated in paragraph 3 (ix) of the Order are not applicable to the Company.

x. During the course of our audit examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employees.

xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not paid / provided formanagerial remuneration. Accordingly the provisions stated in paragraph 3(xi) of theOrder are not applicable to the Company.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly the provisions stated in paragraph 3(xii) ofthe Order are not applicable to the company.

xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly the provisions stated in paragraph 3 (xiv) of the Order are notapplicable to the Company.

xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly provisions statedin paragraph 3(xv) of the Order are not applicable to the Company.

xvi. In our opinion the Company is required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and it has obtained the registration.

For MZSK & Associates
Chartered Accountants
Firm Registration No. 105047W
Abuali Darukhanawala
Place : Mumbai Partner
Date : 30th May 2017 Membership No. 108053
INDEPENDENT AUDITOR'S REPORT