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AUDITOR'S REPORT

Reliance Capital Ltd.

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Market Cap. (₹) 398.02 Cr. P/BV -0.41 Book Value (₹) -38.08
52 Week High/Low (₹) 275/16 FV/ML 10/1 P/E(X) 0.00
Bookclosure 18/09/2018 EPS (₹) 0.00 Div Yield (%) 66.67
Year End :2018-03 

Report on the Standalone Financial Statements

1. We have audited the accompanying standalone financial statements of Reliance Capital Limited (“the Company”), which comprise the Balance Sheet as at March 31, 201 8, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information (herein referred to as “the standalone financial statements”).

Management’s Responsibility for the Standalone Financial Statements

2. The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 201 3 (“the Act”) with respect to the preparation of these standalone financial statements to 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 relevant rules of the Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of 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 controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on these standalone financial statements based on our audit.

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

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable 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.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the standalone financial statements. The procedures selected depend on the auditors’ 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.

7. 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

8. 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, of the state of affairs of the Company as at March 31, 201 8, and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

9. We draw attention to Note No. 38(i) to the standalone financial statements which describes that the Company has made an application to the Reserve Bank of India (‘RBI’) for obtaining Certificate of Registration as a Core Investment Company (‘CIC’) and has taken necessary measures to comply with the prudential norms applicable to a CIC.

Our opinion is not modified in respect of this matter.

Other Matter

10. The standalone financial statements of the Company for the year ended March 31, 2017 were audited by the then Joint Statutory Auditor, M/s. B S R & Co. LLP, Chartered Accountants and the present Joint Statutory Auditor, M/s. Pathak H.D. & Associates, Chartered Accountants who issued an unmodified opinion vide their report dated April 27, 201 7.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

11. As required by ‘the Companies (Auditor’s Report) Order, 201 6’, issued by the Central Government of India in terms of sub-section (11) of Section 143 of the Act (hereinafter referred to as the “Order”), 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 B, a statement on the matters specified in paragraphs 3 and 4 of the Order.

12. 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 Flow Statement dealt with by this Report are in agreement with the books of account;

(d) In our opinion, the aforesaid standalone financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with relevant rules of the Companies (Accounts) Rules, 2014;

(e) On the basis of the written representations received from the directors as on March 31, 2018 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2018 from being appointed as a director in terms of Section 1 64 (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 A and;

(g) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 1 1 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i. The Company has disclosed the impact, if any, of pending litigations as at March 31, 201 8 on its financial position in its standalone financial statements - Refer Note No. 43(a)(ii) to the standalone financial statements;

ii. The Company has made provision as at March 31, 2018 as required under the applicable law or accounting standards, for material foreseeable losses, if any, on long-term contracts including derivative contracts - Refer Note No. 49 to the standalone financial statements;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2018;

iv. The reporting on disclosures relating to Specified Bank Notes is not applicable to the Company for the year ended March 31, 2018 - Refer Note No. 48 to the standalone financial statements.

Referred to in paragraph 1 1 of the Independent Auditors’ Report of even date to the members of Reliance Capital Limited (“the Company’) on the standalone financial statements as of and for the year ended March 31, 2018

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

(b) The fixed assets are physically verified by the Management according to a phased programme designed to cover all the items over a period of three years, which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. Pursuant to the programme, a portion of the fixed assets has been physically verified by the Management during the year and no material discrepancies have been noticed on such verification.

(c) The title deeds of immovable properties, as disclosed in Note No. 14 on fixed assets to the standalone financial statements, are held in the name of the Company.

ii. The Company is in the business of rendering services, and consequently, does not hold any inventory. Therefore, the provisions of Clause 3(ii) of the said Order are not applicable to the Company.

iii. 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 Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.

iv. The Company has not granted any loan or provided any guarantee or security in connection with any loan taken by parties covered under Section 185 of the Act. Therefore, the provisions of Section 185 are not applicable to the Company. The Company is registered as a Non-Banking Financial Company with the RBI and has made application to RBI for obtaining Certificate of Registration as Core Investment Company. Thus, the provision of Section 186 except sub-section (1) of the Act is not applicable to the Company. In our opinion and according to the information and explanations given to us, during the year, the Company has not made any investments through more than two layers of investment companies as mentioned in sub section (1) of Section 186 of the Act.

v. The Company has not accepted any deposits from the public within the meaning of directives issued by the Reserve Bank of India and Sections 73, 74, 75 and 76 of the Act and the Rules framed there under to the extent notified. Therefore, the provisions of Clause 3(v) of the said Order are not applicable to the Company.

vi. The Central Government of India has not specified the maintenance of cost records under sub-section (1) of Section 148 of the Act for any of the products of the Company. Therefore, the provisions of Clause 3(v) of the said Order are 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, income tax and profession tax though there has been a slight delay in a few cases, and is regular in depositing undisputed statutory dues, including service tax, value added tax, cess, goods and service tax with effect from July 1, 2017 and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of income-tax, service-tax, value added tax, goods and service tax which have not been deposited on account of any dispute. The particulars of dues of sales tax as at March 31, 2018, which have not been deposited on account of a dispute, are as follows:

Name of the statute

Nature of dues

Amount (Rs.)

Period to which the amount relates

Forum where the dispute is pending

Madhya Pradesh Sales Tax Act, 1958

Sales Tax

430,472

1996

1997

Appellate Deputy Commissioner of the Commercial Tax, Indore Division I

Gujarat Sales Tax Act, 1969

Sales Tax

475,916

2001

2002

Gujarat Sales Tax Tribunal, Ahmedabad

viii. According to the records of the Company examined by us and the information and explanation given to us, the Company has not defaulted in repayment of loans or borrowings to any financial institution or bank or Government or dues to debenture holders as at the balance sheet date.

ix. The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments). In our opinion, and according to the information and explanations given to us, the moneys raised by way of term loans have been applied for the purposes for which they were obtained.

x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. The Company has paid / provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Act.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Sections 1 77 and 188 of the Act. The details of related party transactions have been disclosed in the standalone financial statements as required under Accounting Standard (AS) 1 8, Related Party Disclosures specified under Section 1 33 of the Act, read with relevant rules of the Companies (Accounts) Rules, 2014.

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. According to the information and explanations given to us the Company is registered as Non-Banking Financial Company under Section 45-IA of the Reserve Bank of India Act, 1 934. The Company has positioned itself as a Core Investment Company and has made an application with RBI for obtaining Certificate of Registration as a Core Investment Company and has taken necessary measures to comply with the prudential norms applicable to a Core Investment Company - Refer Note No. 38(i) to the standalone financial statements.

For Pathak H.D. & Associates For Price Waterhouse & Co

Firm Registration No.: 107783W Chartered Accountants LLP

Chartered Accountants Firm Registration No.: 304026E/E-300009

Chartered Accountants

Parimal Kumar Jha Vivek Prasad

Partner Partner

Membership No.: 124262 Membership No.: 104941

Mumbai Mumbai

April 26, 2018 April 26, 2018

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