on the Standalone Financial Statements
To the Members of Bajaj Finance Ltd.
1. We have audited the accompanying standalone financial statements of Bajaj FinanceLtd. ('the Company') which comprise the Balance Sheet as at 31 March 2017 the Statementof Profit and Loss the Cash Flow Statement for the year then ended and a summary of thesignificant accounting policies and other explanatory information.
Management's responsibility for the standalone financial statements
2. The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ('the Act') with respect to the preparation of thesestandalone financial statements to give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified undersection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.
4. We have taken into account the provisions of the Act and the Rules made thereunderincluding the Accounting Standards and matters which are required to be included in theaudit report.
5. We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act and other applicable authoritative pronouncements issued by theInstitute of Chartered Accountants of India. Those Standards and pronouncements requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
6. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone financial statements. The procedures selected dependon the auditors' judgment including the assessment of the risks of material misstatementof the standalone financial statements whether due to fraud or error. In making thoserisk assessments the auditor considers internal financial control relevant to theCompany's preparation of the standalone financial statements that give a true and fairview in order to design audit procedures that are appropriate in the circumstances. Anaudit also includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's directors as well asevaluating the overall presentation of the standalone financial statements.
7. 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.
8. 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 31 March 2017 and its profit and its cash flows for the year ended on that date.
Report on other legal and regulatory requirements
9. As required by the Companies (Auditor's Report) Order 2016' issued by theCentral 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 andrecords of the Company as we considered appropriate and according to the information andexplanations given to us we give in the Annexure B a statement on the matters specifiedin paragraphs 3 and 4 of the Order.
10. A s 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 Flow Statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on 31March 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2017 from being appointed as a director in terms of section164(2) of the Act.
(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 A.
(g) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our knowledge and belief and according to the information andexplanations given to us: i. The Company has disclosed the impact if any of pendinglitigations as at 31 March 2017 on its financial position in its standalone financialstatements;
ii. The Company has made provision as at 31 March 2017 as required under theapplicable Law or Accounting Standards for material foreseeable losses if any onlong-term contracts. The Company did not have any long-term derivative contracts as at 31March 2017;
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company for the year ended 31 March2017;
iv. The Company has provided requisite disclosures in the financial statements as toits direct holdings as well as dealings in Specified Bank Notes during the period 8November 2016 to 30 December 2016 which based on audit procedures and relying onManagement representations are in agreement with the books of accounts maintained by theCompany and as produced to us for our verification. However disclosures of holdings on 8November 2016 and depositions thereof made directly by collecting agents in SBN and otherdenomination in respect of its two-wheelers and three-wheelers financing business asdetailed in note no. 34(ii)(b) to the financial statements are only to the extent ofinformation available and received by the Company and hence are not verifiable by us.
For Dalal & Shah LLP
Firm Registration Number: 102021W/W100110
Membership Number: 037942
Pune: 17 May 2017
Annexure A to Independent Auditors' Report
Referred to in paragraph 10(f) of the Independent Auditors' Report of even date to theMembers of Bajaj Finance Ltd. on the standalone financial statements for the year ended 31March 2017
Report on the internal financial controls under clause (i) of sub-section 3 of section143 of the Act
1. We have audited the internal financial controls over financial reporting of BajajFinance Ltd. ('the Company') as of 31 March 2017 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.
Management's responsibility for internal financial controls
2. 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 (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 Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
3. 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 deemed to be prescribed under section143(10) of the Act to the extent applicable to an audit of internal financial controlsboth applicable to an audit of internal financial controls and both issued by the ICAI.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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.
5. 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 controls systemover financial reporting.
Meaning of internal financial controls over financial reporting
6. The 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. The Company's internal financial control overfinancial reporting includes those policies and procedures that
(i) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;
(ii) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorisations of Management and directors of the Company; and
(iii) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.
Inherent limitations of internal financial controls over financial reporting
7. 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.
8. In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India.
For Dalal & Shah LLP
Firm Registration Number: 102021W/W100110
Membership Number: 037942
Pune: 17 May 2017