STG Lifecare Ltd Auditor Reports

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Sep 25, 2017|03:19:50 PM

STG Lifecare Ltd Share Price Auditors Report

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) ("the company"), which comprise the Balance Sheet as at 31 March 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of significant 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 section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also includes the 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; and design, implementation and maintenance of adequate internal financial control, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the 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 auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companys preparation of the financial statements that give true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Companys Directors, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our qualified audit opinion

Basis for Qualified Opinion

1. Note No. 4 in the financial statement which indicates that the Company has accumulated losses of Rs. 36,55,04,060/- and its Net worth has been substantially eroded, the Company has incurred a net loss of Rs. 7,43,275/- during the current financial year and Rs. 97,11,874/- in the previous year and the Companys current liabilities exceeded its current assets as at the balance sheet date. These conditions, along with other matters set forth in the Notes to the accounts, indicate the existence of a material uncertainty that cast significant doubt about the Companys ability to continue as a going concern. However as per the representation made by the management they have received enquiries from the patients from India & abroad for their medical treatment by use of Website of the Company and are also getting excellant response from the hospitals to associate with the company for patient referrals during the current financial year also. But in our opinion the income from this business is stil uncertain. The financial statements of the Company has been prepared on a going concern basis for the reasons stated in the said Note.

2. Note no. 11, the company has net deferred tax assets Rs. 14,18,07,674, as on 31st March, 2017. Since there was unabsorbed depreciation & accumulated losses of Rs. 36,47,60,785/- as on 31.03.2016 and has also incurred losses of Rs. 7,43,275/- during the current year. Further, the management does not have sufficient reasons supported by the convincing evidences that the company will have sufficient taxable income in the future against which the said deferred tax asset could be realised. Had the company transferred the said deferred tax asset of Rs. 14,18,07,674/- to the profit and loss account then the loss would have been higher by same amount.

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, the aforesaid 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;

a) in the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2017;

b) in the case of the Statement of Profit and Loss, of the Loss for the year ended on that date; and

c) in the case of the Cash 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 of the Act, we give in the Annexure "A" a statement on the matters specified in paragraphs 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 the Basis for Qualified Opinion above 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 except for the effect of the matters described in the Basis for Qualified Opinion paragraph above proper books of account as required by law have been kept 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 dealt with 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 for Qualified Opinion paragraph above the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) The matters described in Basis for Qualified opinion paragraph above, may have an adverse effect on the functioning of the Company.

f) On the basis of written representations received from the directors as on 31 March, 2017, taken on record by the Board of Directors, none of the directors is disqualified as on 31 March, 2017, from being appointed as a director in terms of Section 164(2) of the Act.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company and operating effectiveness of such controls, refer to our report in Annexure "B" and

h) With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rule 2014, in our opinion and 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 company as on the date of its financial statements.

ii. The Company did not have any long-term contracts including derivatives contracts for which there were any material foreseeable losses.

iii. There were no amounts which required to be transferred to the Investor Education and Protection Fund.

iv. The company has provided requisite disclosure in its financial statements as to holding as well as dealing in specified Bank Notes (SBNs) during the period from 8th November, 2016 to 30th December, 2016 and these are in accordance with the books of accounts maintained by the company refer Note no. 37 to the financial statements.

For H.K. BATRA & Associates
CharteredAccountants
FRN: 009889N
(H. K. BATRA)
Place : New Delhi Partner
Date : 19.05.2017 M. No: 088790

ANNEXURE "A" TO THE AUDITORS REPORT

Referred to in paragraph 1 under the heading "Report on other Legal and Regulatory requirements" of our Report of even date to the members of M/S STG LIFECARE LIMITED (Formerly Known as Software Technology Group International Limited) on the accounts of the company for the year ended 31st March, 2017, we report that: (i) (a) The Company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets ;

(b) As explained to us, fixed assets have been physically verified by the management at regular intervals; as informed to us no material discrepancies were noticed on such verification;

According to the information and explanations given to us and on the basis of our examination of the records of the company, the title deeds of immovable properties are held in the name of the Company.

(ii) The Companies business does not involve inventories and accordingly , the requirements 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 not granted any loans secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the companies Act, 2013. Accordingly, the provisions of clause 3(iii)(a),(b) and (c) of the Order are not applicable to the Company and hence not commented upon.

(iv) In our opinion and accoding to the information and explanations given to us, the provisions of Section 185 and 186 of the Companies Act 2013 in respect of loans to directors including entities in which they are interested and in respect of loans and advances given, investments made and, guarantees, and securities given are not applicable to 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 of cost records under sub-section (1) of Section 148 of the Act, for any of the services rendered by the Company.

(vii) a) According to the information and explanations given to us and on the basis of our examination of the records of the Company amounts deducted/accrued in the books of accounts in respect of undisputed statutory dues including income tax, Employee state insurance, service tax, cess have not been deposited by the company with the appropriate authorities. As explanies to us , the company does not have any dues on account of provident fund, sales tax, value added tax, duty of cutoms, and other material statutory dues.

b) According to the information and explanations given to us and also based on management representations, undisputed statutory dues payable towards Income tax deducted at sources of Rs. 46.44 lacs, Employees State Insurance of Rs. 7.04 Lacs, Service Tax of Rs. 147.39 Lacs have not been deposited with the appropriate authorities, which were outstanding, at the year end, for a period of more than six months from the date they become payable.

c) According to the information and explanation given to us and also based on the records of the company, there are no dues of Sales Tax, Custom Duty, Excise duty, Wealth Tax, cess which have not been deposited on account of any dispute except the following

Nature of Statute Nature of Dues Amount (Rs.) Forum where dispute is pending
Income Tax Act, 1961 Income Tax u/s 143 (3) 8,32,030/- CIT (Appeals )
Income Tax Act, 1961 Income Tax demad u/s 143(1) 9,94,980/- Rectification u/s154 of Income Tax Act. Pending before AO/CPC Bangaluru.
Asstt year 2010-11

(viii) According to the records of the company examined by us and as per the information and explanations given to us, the company has not availed of any loans or borrowings from any financial institution, banks, government or debenture holders during the 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 information and explanations given to us, the company did not raise any money by way of initial public offer 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 Company or on the Company by its officers or employees has been noticed or reported during the course of our audit.

(xi) According to the records of the company examined by us and as per the information and explanations given to us, the company has not paid/provided for any managerial remuneration 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, the company 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 our examination of the records of the Company, transactions with related parties are in compliance with Section 177 and 188 of the Act where applicable and details of such transaction have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has not entered into non-cash transactions with directors or persons connected with them. Accordingly paragraph 3(xv) of the Order is not applicable.

(xiv) The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

For H.K. BATRA & Associates
CharteredAccountants
FRN: 009889N
(H. K. BATRA)
Place : New Delhi Partner
Date : 19.05.2017 M. No: 088790

ANNEXURE " B " TO THE AUDITORS REPORT

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

We have audited the internal financial controls over financial reporting of M/S STG LIFECARE LIMITED (Formerly Known as Software Technology Group International Limited) ("the company"), as of 31 March 2017, in conjunction with our audit of the standalone 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 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 (ICAI). 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 companys 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.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys 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) of the 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 auditors judgement, 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 Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A companys 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 companys 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 authorisations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the companys 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.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31st March, 2017 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 (ICAI).

For H.K. BATRA & Associates
CharteredAccountants
FRN: 009889N
Place : New Delhi (H. K. BATRA)
Date : 19.05.2017 Partner
M. No: 088790

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