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Religare Enterprises Ltd.

BSE: 532915 | NSE: RELIGARE |

Represents Equity.Intra - day transactions are permissible and normal trading is done in this category
Series: EQ | ISIN: INE621H01010 | SECTOR: Finance - Investments

BSE Live

Aug 14, 16:00
34.85 -0.65 (-1.83%)
Volume
AVERAGE VOLUME
5-Day
31,191
10-Day
27,685
30-Day
88,747
50,512
  • Prev. Close

    35.50

  • Open Price

    36.20

  • Bid Price (Qty.)

    34.75 (824)

  • Offer Price (Qty.)

    34.85 (200)

NSE Live

Aug 14, 16:01
34.80 -0.65 (-1.83%)
Volume
AVERAGE VOLUME
5-Day
258,353
10-Day
321,578
30-Day
371,051
305,009
  • Prev. Close

    35.45

  • Open Price

    36.05

  • Bid Price (Qty.)

    0.00 (0)

  • Offer Price (Qty.)

    34.80 (1504)

Annual Report

For Year :
2018 2016 2015 2014 2013 2012 2011 2010 2009

Auditor's Report

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Religare Enterprises Limited (“the Company”), which comprise the Balance Sheet as at March 31,2018, and the Statement of Profit and Loss and Cash Flows Statement for the year then ended and a summary of the significant accounting policies and other explanatory information (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 section 134(5) ofthe Companies Act, 2013 (“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 in accordance with the Accounting Standards generally accepted in India, including the accounting standards prescribed under Section 133 of the Act read with rule 7 ofthe Companies (Accounts) Rules 2014, as amended, and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records in accordance with the provisions 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; the design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness ofthe accounting records, relevant to the preparation and presentation ofthe 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 and Rules made thereunder including the accounting standards and matters which are required to be included in the audit report.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the standalone 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 standalone 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 standalone financial statements that give a true and fair 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 and the reasonableness of the accounting estimates made by the Company’s directors, as well as evaluating the overall presentation of the standalone financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide 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 explanations given to us, 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, ofthe state of affairs ofthe Company as 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 regarding significant decline in the net worth of Religare Finvest Limited (RFL), subsidiary of the company, adjustment of Fixed deposit ofRs. 75,000 Lakhs (representing Rs.79,145 Lakhs as per financial statement as on March 31, 2018 by Laxmi Vilas Bank (LVB), which is under litigation, besides concerns raised by the RBI on the operations of RFL and restriction on expansion of credit/ investment portfolio. Management of the RFL is in the process of taking various action including the definitive additional capital infusion plan, induction of new management personnel, discussion with RBI for relaxing the restriction imposed on the business capability ofthe company, initiating detailed diligence from a law firm of repute of (i) corporate loan book and (ii) Recoverable from Strategic Credit Capital Private Limited and Perpetual Credit Services Private Limited besides strengthening the internal controls and corporate governance mechanism, Considering all these measures, management is ofthe view that there would be significant improvement in the financial position of RFL. Hence, decline in the net worth of RFL is considered as temporary and consequently no impairment provision has been considered 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 (“the Order”), issued by the Central Government of India in terms of section 143(11) of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the “Annexure A”, a statement on the matters specified in the paragraph 3 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 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 flows statement dealt with by this Report are in agreement with the books ofaccount;

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

(e) On the basis of written representation received from the Directors as on March 31, 2018, taken on record by the Board of Directors, none ofthe Directors is disqualified as on March 31, 2018, from being appointed as a director in terms of Section 164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in “Annexure B”.

(g) With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 ofthe Companies (Audit and Auditors) Rules, 2014, as amended, 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 financial statements-Refer Note 28.

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

(iii) There were no amount which were required to be transferred to the Investor Education and Protection Fund by the Company during the yearended March 31, 2018- Refer Note 10.1

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

Enterprises Limited.

The Annexure as referred in paragraph (1) “Report on Legal and Other Regulatory Requirements” ofthe Independent Auditor’s Report of even date to the members of Religare Enterprises Ltd on the standalone Financial Statements for the year ended March 31, 2018, we report that:

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

b) According to the information and explanation provided to us, the management has not conducted physical verification during the year. As informed, the management has initiated a program to conduct physical verification of fixed asset.

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

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

iii) As per the information and explanation given to us and on the basis of our examination of the records, the Company has not granted any loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or other parties required to be covered 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 our examination of the records, the Company has not granted any loans or made any investment or provided any guarantees or security to parties covered under section 185.

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

v) As per the information and explanation provided to us, the Company has not accepted any deposits from the public within the meaning of directives issued by the Reserve Bank of India and provisions of sections 73 to 76 or any other relevant provisions of the Companies 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 Central government has not prescribed for maintenance of the cost records for any of the products of the company. Accordingly, Clause (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 of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of provident fund, employees’ state insurance, income tax, sales tax, value added tax, service tax, Goods and Services Tax though there has been slight delays in few cases 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 more than six months from the date they became payable.

b) According to the information and explanations given to us and the records of the Company examined by us, the particulars of dues of income tax, service tax, sales tax, value added tax and Goods and Services Tax which have not been deposited as at March 31, 2018 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

99,938,033

Commissioner of Income Tax (Appeals)

Income Tax

AY 2013-14

24,807,840

Commissioner of Income Tax (Appeals)

‘Income Tax

AY 2012-13

118,514,944

Commissioner of Income Tax (Appeals)

‘Income Tax (Penalty)

AY 2012-13

43,300,168

Commissioner of Income Tax (Appeals)

Income Tax

AY 2011-12

39,209,030

Income Tax Appellate Tribunal

Income Tax

AY 2011-12

26,316,850

Commissioner of Income Tax (Appeals)

Income Tax

AY 2010-11

2,577,937

Income Tax Appellate Tribunal

Income Tax (Penalty)

AY 2010-11

10,358,000

Income Tax Appellate Tribunal

Income Tax

AY 2009-10

21,819,500

Income Tax Appellate Tribunal

Income Tax

AY 2009-10

41,084,458

Commissioner of Income Tax (Appeals)

Income Tax

AY 2008-09

70,120,000

Income Tax Appellate Tribunal

Service Tax Regulations

Service Tax

FY 2005-06 to FY 2009-10

1,053,180

Custom Excise and Service Tax Appellate Tribunal

Service Tax

FY 2010-11

3,954,567

Custom Excise and Service Tax Appellate Tribunal

Service Tax

FY 2011-12

5,195,173

Custom Excise and Service Tax Appellate Tribunal

Total (Refer Note below)

508,249,680

Note : Pursuant to Composite Scheme of Arrangement as referred to in Note No. 4.1, all the pending disputes at various forums in case of transferor entities shall stand transferred to the Company and excluding Rs. 12,505,369 transferred pursuant to above referred Composite Scheme of Arrangement.

* Including Rs. 138,526,501 forwhich relevant orders are yet to be provided by the management.

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 financial institutions, banks and government or has not defaulted in the repayment of the dues to debenture holders as at balance sheet date.

ix) The Company has not raised moneys by way of initial public offer or further public offer (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 Company or no material fraud on the Company by its officers or employees has been noticed or reported during the year.

xi) According to the information and explanations given to us and based on our examination of the record of the Company, the Company has paid/ provided managerial remuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

xii) According to the information and explanations given to us, the Company is not a Nidhi 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 our examination of the record of the Company, transactions with related parties are in compliance with Section 177 and 188 ofthe Companies Act, 2013 where applicable and details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.

xiv) According to the information and explanations given to us and based on our examination ofthe record ofthe Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of Clause 3 (xiv) of the Order are not applicable to the Company.

xv) According to the information and explanations given to us and based on our examination of the record of the Company, during the year the Company has not entered into any non-cash transactions with its Directors or persons connected to its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

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

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

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013.

We have audited the internal financial controls over financial reporting of Religare Enterprises Limited as at March 31, 2018 in conjunction with our audit of the financial statements 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 internal financial controls based on “the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India”. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing, issued by ICAI and deemed to be prescribed under section 143(10) ofthe Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. 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.

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

Meaning of Internal Financial Controls over Financial Reporting

A company’s internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Basis for Qualified opinion

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

a) As stated in Note No. 19.2 to the standalone financial statement and according to information and explanation furnished to us and based on our audit, continuing material weakness has been identified in the Internal Financial Control Over Financial Reporting in the Credit evaluation process, recovery mechanism in respect of Corporate Loan which was not operating effectively as at March 31, 2018.

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

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

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 Company has maintained adequate internal control over financial reporting as at March 31, 2018 based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the “Guidance Note on Audit of Internal Financial Controls Over Financial Reporting” issued by ICAI and except for possible effects ofthe material weaknesses described in the Basis for Qualified Opinion paragraph above on the achievement ofthe objectives ofthe Control Criteria, the Company’s internal financial controls overfinancial reporting were operating effectively as at March 31, 2018.

We have considered the material weakness identified and reported above in determining the nature, timing and extent of audit tests applied in our audit of the standalone financial statements of the Company for the year ended March 31, 2018 and these material weaknesses 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/-

Naveen Aggarwal

Place: Gurugram Partner

Date: May 30, 2018 Membership Number: 094380