To the Members of
M/S STG LIFECARE LIMITED
(Formerly Known as Software Technology Group International Limited)
Report on the (Standalone) * Financial Statements
We have audited the accompanying financial statements of M/S STG LIFECARE LIMITED(Formerly Known as Software Technology Group International Limited) ("thecompany") which comprise the Balance Sheet as at 31 March 2016 the Statement ofProfit and Loss the Cash Flow Statement for the year then ended and a summary ofsignificant accounting policies and other explanatory information.
Managements Responsibility for (Standalone) the Financial Statements
The Companys Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes the maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial control that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
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 accordancewith the Standards on Auditing 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 theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of accounting policies used and the reasonableness of theaccounting estimates made by Companys 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 for our qualified audit opinion
Basis for Qualified Opinion
1. Note No. 4 in the financial statement which indicates that the Company hasaccumulated losses of Rs. 364760785/- and its Net worth has been substantially erodedthe Company has incurred a net loss of Rs. 9711874/- during the current financial yearand Rs. 12616970/- in the previous year and the Companys current liabilitiesexceeded its current assets as at the balance sheet date. These conditions along withother matters set forth in the Notes to the accounts indicate the existence of a materialuncertainty that cast significant doubt about the Companys ability to continue as agoing concern. However as per the representation made by the management they have receivedenquiries from the patients from India & abroad for their medical treatment by use thenewly designed Website of the Company and are also getting excellant response from thehospitals to associate with the company for patient referrals. But in our opinion theincome from this business is stil uncertain. The financial statements of the Company hasbeen prepared on a going concern basis for the reasons stated in the said Note.
2. Note no. 13 the company has net deferred tax assets Rs. 141807674 as on 31stMarch 2016. Since there was unabsorbed depreciation & accumulated losses of Rs.355048911/- as on 31.03.2015 and has also incurred losses of Rs. 9711874/- during thecurrent year. Further the management does not have sufficient reasons supported by theconvincing evidences that the company will have sufficient taxable income in the futureagainst which the said deferred tax asset could be realised. Had the company transferredthe said deferred tax asset of Rs. 141807674/- to the profit and loss account then theloss would have been higher by same amount.
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 the aforesaid financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India; a) in the case of the Balance Sheet ofthe state of affairs of the Company as at March 31 2016; b) in the case of the Statementof Profit and Loss of the Loss for the year ended on that date; and c) in the case of theCash 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 (Auditors Report) Order 2016 (" the Order)issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Act we give in the Annexure "A" a statement on the matters specified inparagraphs 3 and 4 of the Order.
2. As required by section 143(3) of the Act we report that:
a) We have sought and except for the possible effect of the matter described in theBasis for Qualified Opinion above obtained all the information and explanations which tothe best of our knowledge and belief were necessary for the purposes of our audit.
b) In our opinion except for the effect of the matters described in the Basis forQualified Opinion paragraph above proper books of account as required by law have beenkept by the Company so far as appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith by this Report are in agreement with the books of account.
d) In our opinion except for the effect of the matters described in the Basis forQualified Opinion paragraph above the aforesaid standalone financial statements complywith the Accounting Standards specified under Section 133 of the Act read with Rule 7 ofthe Companies (Accounts) Rules 2014.
e) The matters described in Basis for Qualified opinion paragraph above may have anadverse effect on the functioning of the Company.
f) On the basis of written representations received from the directors as on 31 March2016 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2016 from being appointed as a director in terms of Section 164(2) of theAct.
g) With respect to the adequacy of the internal financial controls over financialreporting of the Company and operating effectiveness of such controls refer to our reportin Annexure "B" and
h) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rule 2014 in our opinionand to the best of our information and according to the explanations given to us :
i. As informed by the management there was no litigations pending against the companyas on the date of its financial statements.
ii. The Company did not have any long-term contracts including derivatives contractsfor which there were any material foreseeable losses.
iii. There were no amounts which required to be transferred to the Investor Educationand Protection Fund.
ANNEXURE "A" TO THE AUDITORS REPORT
Referred to in paragraph 1 under the heading "Report on other Legal and Regulatoryrequirements" of our Report of even date to the members of M/S STG LIFECARELIMITED (Formerly Known as Software Technology Group International Limited) on theaccounts of the company for the year ended 31st March 2016 we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets ;
(b) As explained to us fixed assets have been physically verified by the management atregular intervals; as informed to us no material discrepancies were noticed on suchverification;
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable properties areheld in the name of the Company.
(ii) The Companies business does not involve inventories and accordingly therequirements under paragraph 3(ii) of the Order are not applicable to the Company.
(iii) Accoding to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited Liability Partnershipsor other parties covered in the register maintained under section 189 of the companiesAct 2013. Accordingly the provisions of clause 3(iii)(a)(b) and (c) of the Order arenot applicable to the Company and hence not commented upon.
(iv) In our opinion and accoding to the information and explanations given to us theprovisions 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 are not applicableto the Company.
(v) The Company has not accepted any deposits from the public.
(vi) As informed to us the Central Government has not prescribed the maintenance ofcost records under sub-section (1) of Section 148 of the Act for any of the servicesrendered by the Company.
(vii) a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccounts in respect of undisputed statutory dues including income tax Employee stateinsurance service tax cess have not been deposited by the company with the appropriateauthorities. As explanies to us the company does not have any dues on account ofprovident fund sales tax value added tax duty of cutoms and other material statutorydues.
b) According to the information and explanations given to us and also based onmanagement representations undisputed statutory dues payable towards Income tax deductedat sources of Rs. 45.36 lacs Employees State Insurance of Rs. 7.04 Lacs ServiceTax of Rs. 147.65 Lacs have not been deposited with the appropriate authorities whichwere outstanding at the year end for a period of more than six months from the date theybecome payable. c) According to the information and explanation given to us and also basedon the records of the company there are no dues of Sales Tax Custom Duty Excise dutyWealth Tax cess which have not been deposited on account of any dispute except thefollowing
|Nature of Statute ||Nature of Dues ||Amount (Rs.) ||Forum where dispute is pending |
|Income Tax Act 1961 ||Income Tax u/s 143 (3) ||832030/- ||CIT (Appeals ) |
|Income Tax Act 1961 ||Income Tax demad u/s 143(1) Asstt year 2010-11 ||1031440/- ||Rectification u/s154 of Income Tax Act. Pending before AO/ CPC Bangaluru. |
(viii) According to the records of the company examined by us and as per theinformation and explanations given to us the company has not availed of any loans orborrowings from any financial institution banks government or debenture holders duringthe year. Accordingly paragraph 3(viii) of the Order is not applicable.
(ix) According to the records of the company examined by us and as per the informationand explanations given to us the company did not raise any money by way of initial publicoffer or further public offer (including debt instruments) and term loans during the year.Accordingly paragraph 3(ix) of the Order is not applicable.
(x) According to the information and explanations given to us no fraud by the Companyor on the Company by its officers or employees has been noticed or reported during thecourse of our audit.
(xi) According to the records of the company examined by us and as per the informationand explanations given to us the company has not paid/provided for any managerialremuneration during the year. Accordingly paragraph 3(xi) of the Order is not applicable.
(xii) In our opinion and According to the information and explanations given to us thecompany is not nidhi company. Accordingly paragraph 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with related parties are incompliance with Section 177 and 188 of the Act where applicable and details of suchtransaction have been disclosed financial statements as required by the applicableaccounting standards. the
(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xiv) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
ANNEXURE " B " TO THE AUDITORS REPORT
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 ofM/S STGLIFECARE LIMITED (Formerly Known as Software Technology Group International Limited)("the company") as of 31 March 2016 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to companys policies the safeguarding of its assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial Internal Financial Controls and both issuedby the Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects. Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditors judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompanys assets that could have a material effect on the financial statements.
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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting financial controls over financialreporting were operating effectively as at 31st March2016 based on the internalandsuchinternal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls over Financial Reporting issued by the Institute ofChartered Accountants of India (ICAI).
| ||For H.K. BATRA & Associates |
| ||CharteredAccountants |
| ||FRN: 009889N |
|Place : New Delhi ||(H. K. BATRA) |
|Date : 27.05.2016 ||Partner |
| ||M. No: 088790 |