You are here » Home » Companies » Company Overview » Religare Enterprises Ltd

Religare Enterprises Ltd.

BSE: 532915 Sector: Financials
NSE: RELIGARE ISIN Code: INE621H01010
BSE 00:00 | 24 May 26.55 0.80
(3.11%)
OPEN

25.45

HIGH

27.50

LOW

25.00

NSE 00:00 | 24 May 26.35 1.05
(4.15%)
OPEN

25.30

HIGH

27.15

LOW

24.80

OPEN 25.45
PREVIOUS CLOSE 25.75
VOLUME 21539
52-Week high 54.30
52-Week low 17.05
P/E
Mkt Cap.(Rs cr) 576
Buy Price 25.40
Buy Qty 25.00
Sell Price 26.55
Sell Qty 50.00
OPEN 25.45
CLOSE 25.75
VOLUME 21539
52-Week high 54.30
52-Week low 17.05
P/E
Mkt Cap.(Rs cr) 576
Buy Price 25.40
Buy Qty 25.00
Sell Price 26.55
Sell Qty 50.00

Religare Enterprises Ltd. (RELIGARE) - Auditors Report

Company auditors report

Independent Auditor’s Report

TO THE MEMBERS RELIGARE ENTERPRISES LIMITED Report on the Standalone FinancialStatements

We have audited the accompanying standalone financial statements of ReligareEnterprises Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2018 and the Statement of Profit and Loss and Cash Flows Statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation (herein after referred to as "Financial Statements").

Management’s Responsibility for the Standalone Financial Statements.

The Company’s Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("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 in accordance with the Accounting Standardsgenerally accepted in India including the accounting standards prescribed under Section133 of the Act read with rule 7 of the Companies (Accounts) Rules 2014 as amended andother accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; the design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditor’s Responsibility

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 and Rules made thereunderincluding the accounting standards and matters which are required to be included in theaudit report.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act and other authoritative pronouncements issued by the Instituteof Chartered Accountants of India. Those Standards and pronouncements require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the standalone 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 theauditor’s judgment including the assessment of the risks of material misstatement ofthe standalone financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to theCompany’s preparation of the standalone financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstances.An audit also includes evaluating the appropriateness of the accounting policies used andthe reasonableness of the accounting estimates made by the Company’s directors aswell as evaluating the overall presentation of the standalone financial statements.

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

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at March 31 2018 and its loss its cash flows for the year ended on that date.

Emphasis of Matter

Attention is invited to note No. 14 (b) of the standalone financial statement regardingsignificant decline in the net worth of Religare Finvest Limited (RFL) subsidiary of thecompany adjustment of Fixed deposit of Rs. 75000 Lakhs (representing ' 79145 Lakhs asper financial statement as on March 31 2018 by Laxmi Vilas Bank (LVB) which is underlitigation besides concerns raised by the RBI on the operations of RFL and restriction onexpansion of credit/ investment portfolio. Management of the RFL is in the process oftaking various action including the definitive additional capital infusion plan inductionof new management personnel discussion with RBI for relaxing the restriction imposed onthe business capability of the company initiating detailed diligence from a law firm ofrepute of (i) corporate loan book and (ii) Recoverable from Strategic Credit CapitalPrivate Limited and Perpetual Credit Services Private Limited besides strengthening theinternal controls and corporate governance mechanism

Considering all these measures management is of the view that there would besignificant improvement in the financial position of RFL. Hence decline in the net worthof RFL is considered as temporary and consequently no impairment provision has beenconsidered necessary.

Our opinion is not qualified in respect of this matter.

Report on Legal and Other Regulatory Requirements

1. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of section 143(11) of theAct and on the basis of such checks of the books and records of the Company as weconsidered appropriate and according to the information and explanations given to us wegive in the "Annexure A" a statement on the matters specified in the paragraph3 and 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 purposes of our audit.

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The balance sheet the statement of profit and loss and the cash flows statementdealt with by this Report are in agreement with the books ofaccount;

(d) In our opinion the aforesaid financial statements comply with the AccountingStandards prescribed under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

(e) On the basis of written representation received from the Directors as on March 312018 taken on record by the Board of Directors none of the Directors is disqualified ason March 312018 from being appointed as a director in terms of Section 164(2) of theAct.

(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 B".

(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 as amended inour opinion and to the best of our information and according to the explanations given tous:

(i) The Company has disclosed the impact of pending litigations on its financialposition in its financial statements- Refer Note 28.

(ii) The Company has made provisions as at March 31 2018 as required under theapplicable law or accounting standards for material foreseeable losses if any onlong-term contracts - Refer Note 7. The Company did not have any derivative contracts asat March 312018.

(iii) There were no amount which were required to be transferred to the InvestorEducation and Protection Fund by the Company during the yearended March 31 2018- ReferNote 10.1

For S.S. KOTHARI MEHTA & Co.
Chartered Accountants
Firm Registration Number: 000756N
Sd/-
Naveen Aggarwal
Place: Gurugram Partner
Date: May 30 2018 Membership Number: 094380

Annexure ‘A’ to the Independent Auditor’s Report of even date on theStandalone Financial Statements of Religare

Enterprises Limited.

The Annexure as referred in paragraph (1) "Report on Legal and Other RegulatoryRequirements" of the Independent Auditor’s Report of even date to the members ofReligare Enterprises Ltd on the standalone Financial Statements for the year ended March312018 we report that:

i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation of

fixed assets.

b) According to the information and explanation provided to us the management has notconducted physical verification during the year. As informed the management has initiateda program to conduct physical verification of fixed asset.

c) The title deeds of immovable properties as disclosed in Note 12 on fixed assets tothe standalone financial statements are held in the name of the company.

ii) The Company is engaged in the business of financing and other servicesconsequently does not hold any inventory. Accordingly Clause (ii) of Para 3 of the orderis not applicable to the Company.

iii) As per the information and explanation given to us and on the basis of ourexamination of the records the Company has not granted any loans secured or unsecuredto companies firms Limited Liability Partnerships or other parties required to becovered in the register maintained under section 189 of the Companies Act 2013.

iv) As per the information and explanation given to us and on the basis of ourexamination of the records the Company has

not granted any loans or made any investment or provided any guarantees or security toparties covered under section

185.

As per the information and explanation given to us and on the basis of our examinationof the records the company has complied with the provisions of section 186 of theCompanies Act 2013 in respect of the loans and investments made and guarantees andsecurity provided by it.

v) As per the information and explanation provided to us the Company has not acceptedany deposits from the public within the meaning of directives issued by the Reserve Bankof India and provisions of sections 73 to 76 or any other relevant provisions of theCompanies Act 2013 and the rules framed thereunder to the extent notified.

vi) As per the requirement under section 148(1) of Companies Act 2013 the Centralgovernment has not prescribed for

maintenance of the cost records for any of the products of the company. AccordinglyClause (vi) of Para 3 of the order is

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 generally regular in depositing undisputed statutory dues inrespect of provident fund employees’ state insurance income tax sales tax valueadded tax service tax Goods and Services Tax though there has been slight delays in fewcases and other material statutory dues as applicable with the appropriate authorities.Further there were no undisputed amounts outstanding at the year-end for a period of morethan six months from the date they became payable.

b) According to the information and explanations given to us and the records of theCompany examined by us the particulars of dues of income tax service tax sales taxvalue added tax and Goods and Services Tax which have not been deposited as at March 312018 on account ofany dispute are as follows :

Nature of Statute Nature of Dues Period to which amount relates Amount (INR) Forum where dispute is pending
The Income Tax Act 1961 ‘Income Tax AY 2014-15 99938033 Commissioner of Income Tax (Appeals)
Income Tax AY 2013-14 24807840 Commissioner of Income Tax (Appeals)
‘Income Tax AY 2012-13 118514944 Commissioner of Income Tax (Appeals)
‘Income Tax (Penalty) AY 2012-13 43300168 Commissioner of Income Tax (Appeals)
Income Tax AY 2011-12 39209030 Income Tax Appellate Tribunal
Income Tax AY 2011-12 26316850 Commissioner of Income Tax (Appeals)
Income Tax AY 2010-11 2577937 Income Tax Appellate Tribunal
Income Tax (Penalty) AY 2010-11 10358000 Income Tax Appellate Tribunal
Income Tax AY 2009-10 21819500 Income Tax Appellate Tribunal
Income Tax AY 2009-10 41084458 Commissioner of Income Tax (Appeals)
Income Tax AY 2008-09 70120000 Income Tax Appellate Tribunal
Service Tax Regulations Service Tax FY 2005-06 to FY 2009-10 1053180 Custom Excise and Service Tax Appellate Tribunal
Service Tax FY 2010-11 3954567 Custom Excise and Service Tax Appellate Tribunal
Service Tax FY 2011-12 5195173 Custom Excise and Service Tax Appellate Tribunal
Total (Refer Note below) 508249680

Note : Pursuant to Composite Scheme of Arrangement as referred to in Note No. 4.1 allthe pending disputes at various forums

in case of transferor entities shall stand transferred to the Company and excluding '12505369 transferred pursuant to above

referred Composite Scheme of Arrangement.

* Including ' 138526501 forwhich relevant orders are yet to be provided by themanagement.

viii) According to the records of the Company examined by us and the information &explanation given to us the Company has not taken any loans or borrowings from financialinstitutions banks and government or has not defaulted in the repayment of the dues todebenture holders as at balance sheet date.

ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause 3 (ix)of the Order is not applicable to the Company.

x) According to the information and explanations given to us no fraud by the Companyor no material fraud on the Company by its officers or employees has been noticed orreported during the year.

xi) According to the information and explanations given to us and based on ourexamination of the record of the Company the Company has paid/ provided managerialremuneration in accordance with the requisite approvals mandated by the provisionsofsection 197 read with Schedule V to the Act.

xii) According to the information and explanations given to us the Company is not aNidhi Company and the Nidhi Rules 2014 are not applicable to it .Accordingly paragraph 3(xii) of the Order is not applicable to the Company.

xiii) According to the information and explanations given to us and based on ourexamination of the record of the Company transactions with related parties are incompliance with Section 177 and 188 of the Companies Act 2013 where applicable anddetails of such transactions have been disclosed in the standalone financial statements asrequired by the applicable accounting standards.

xiv) According to the information and explanations given to us and based on ourexamination of the record of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review. Accordingly the provisions of Clause 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 record of the Company during the year the Company has not entered intoany non-cash transactions with its Directors or persons connected to its directors andhence provisions of section 192 of the Companies Act 2013 are not applicable to theCompany.

xvi) The Company is required to and has been registered under section 45-IAof theReserve Bank of India Act 1934 as a Core Investment Company (CIC).

For S.S. KOTHARI MEHTA & Co.
Chartered Accountants
Firm Registration Number: 000756N
Sd 1-
Naveen Aggarwal
Place: Gurugram Partner
Date: May 30 2018 Membership Number: 094380

Annexure ‘B’ to the Independent Auditor’s Report of even date on theStandalone Financial Statements of Religare

Enterprises Limited

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

We have audited the internal financial controls over financial reporting of ReligareEnterprises Limited as at March 31 2018 in conjunction with our audit of the financialstatements of the Company for the year ended on that date.

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". 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 company’s 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 the Companies Act 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s 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 controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor’s judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company’s internal financial controlssystem overfinancial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company’s 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 company’s 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 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 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 control over financial reporting may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Basis for Qualified opinion

Based on our review information & explanation during the year we have observed thefollowing material weaknesses:

a) As stated in Note No. 19.2 to the standalone financial statement and according toinformation and explanation furnished to us and based on our audit continuing materialweakness has been identified in the Internal Financial Control Over Financial Reporting inthe Credit evaluation process recovery mechanism in respect of Corporate Loan which wasnot operating effectively as at March 312018.

b) Review of process of identification and updation of documentation of Micro Small& Medium Enterprises as per MSMED Act 2006 and Information Technology GeneralControls.

c) The Company’s internal control process need to be strengthened in respect ofprocess of initiating payment accounting entries and closure ofoutstanding entries in BankReconciliation Statements;

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 Company has maintained adequate internal control overfinancial reporting as at March 31 2018 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the "Guidance Note on Audit of Internal Financial ControlsOver Financial Reporting" issued by ICAI and except for possible effects of thematerial weaknesses described in the Basis for Qualified Opinion paragraph above on theachievement of the objectives of the Control Criteria the Company’s internalfinancial controls overfinancial reporting were operating effectively as at March 312018.

We have considered the material weakness identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the standalonefinancial statements of the Company for the year ended March 31 2018 and these materialweaknesses do not affect our opinion on the financial statements of the Company.

For S.S. KOTHARI MEHTA & Co.
Chartered Accountants
Firm Registration Number: 000756N
Sd 1-
Naveen Aggarwal
Place: Gurugram Partner
Date: May 30 2018 Membership Number: 094380