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Gujarat Lease Financing Ltd.

BSE: 500174 Sector: Financials
NSE: GLFL ISIN Code: INE540A01017
BSE LIVE 14:16 | 23 Aug 1.26 -0.06
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NSE 11:54 | 08 Aug 3.35 -0.15
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3.35

HIGH

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OPEN 1.32
PREVIOUS CLOSE 1.32
VOLUME 2550
52-Week high 5.35
52-Week low 1.26
P/E
Mkt Cap.(Rs cr) 3
Buy Price 1.26
Buy Qty 150.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1.32
CLOSE 1.32
VOLUME 2550
52-Week high 5.35
52-Week low 1.26
P/E
Mkt Cap.(Rs cr) 3
Buy Price 1.26
Buy Qty 150.00
Sell Price 0.00
Sell Qty 0.00

Gujarat Lease Financing Ltd. (GLFL) - Auditors Report

Company auditors report

TO THE MEMBERS OF GUJARAT LEASE FINANCING LIMITED

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of GUJARAT LEASEFINANCING LIMITED ("the Company") which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss and the Cash Flow Statement for the yearthen ended and a summary of the significant accounting policies and other explanatoryinformation.

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 ("the 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 of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsprescribed under section 133 of the Act.

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; and 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 standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder. We conductedour audit of the standalone financial statements in accordance with the Standards onAuditing specified under Section 143(10) of the Act. Those Standards 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 andthe disclosures in the standalone financial statements. The procedures selected depend onthe auditor'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 the Company'spreparation of the standalone financial statements that give a true and fair view in orderto design audit procedures that are appropriate in the circumstances. An audit alsoincludes 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.

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

Basis for Qualified Opinion

Attention is invited to the Note 2.21(c) regarding non-recognition of income of Rs.1060.94 lacs (Previous year ended 31stMarch 2016: Rs.1060.94 lacs) being interest onincome-tax refunds received in earlier years by the Company and consequential shortprovision of tax of Rs. 277.21 lacs (Previous year ended 31st March 2016: Rs.277.21 lacs) for the reasons stated in the said note.

Had the aforesaid amount of interest on income-tax refunds been accounted for in thebooks of account the accumulated losses as at 31st March 2017 would have beenRs. 16793.92 lacs (Previous year ended 31st March 2016: Rs. 16767.55 lacs)as against reported figure of Rs. 17577.65 lacs (Previous year ended 31stMarch 2016: Rs. 17551.28 lacs) provision for taxation (net of advance tax) would havebeen converted to advance tax net of provision Rs. 1.47 lacs (Previous year ended 31stMarch 2016: Rs. 1.67 lacs) as against reported figure of Rs. 782.26 lacs (Previous yearended 31stMarch 2016: Rs. 782.06 lacs) This matter was also qualified in our report onthe standalone financial statements for the year ended 31st March 2016.

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 aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2017 and its loss and its cash flows for theyear ended on that date.

Emphasis of Matters

We draw attention to Note 1 to the standalone financial statementswhich indicates thatthe Company incurred a net loss of Rs. 26.37 lacs for the year ended 31st March 2017 andas at that date the accumulated losses exceeded its networth and the Company's currentliabilities exceeded its current assets. These conditions along with other matters setforth in Note 1 indicate the existence of a material uncertainty that may cast significantdoubt about the Company's ability to continue as a going concern . However the financialstatements of the Company have been prepared on a going concern basis for the reasonsstated in the said Note.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143 (3) of the Act based on our audit we report to theextent applicable 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) Except for the effects of the matter described in the Basis for Qualified OpinionParagraph above in our opinion proper books of account as required by law have been keptby 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 Statementdealt with by this Report are in agreement with the books of account.

d) Except for the effects of the matter described in the Basis for Qualified OpinionParagraph above in our opinion the aforesaid standalone financial statements comply withthe Accounting Standards prescribed under section 133 of the Act.

e) The matter described in the Basis for Qualified Opinion Paragraph above and thegoing concern matter described in the Emphasis of Matters paragraph above in our opinionmay have an adverse effect on the functioning of the Company.

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

g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.

h) 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". Our report expresses a qualified opinion on theadequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

i) 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 standalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company. iv. The Company has provided requisitedisclosures in the standalone financial statements as regards its holding and dealings inSpecified Bank Notes as defined in the Notification S.O. 3407(E) dated the 8thNovember 2016 of the Ministry of Finance during the period from 8th November 2016 to 30thDecember 2016. Based on audit procedures performed and the representations provided to usby the management we report that the disclosures are in accordance with the books ofaccount maintained by the Company and as produced to us by the Management.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(h) under 'Report on Other Legal and RegulatoryRequirements' of our report of even date)

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

We have audited the internal financial controls over financial reporting of GUJARATLEASE FINANCING LIMITED ("the Company") as of 31st March 2017 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat 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 responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the 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 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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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 judgement 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 qualified audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Basis for Qualified Opinion

According to the information and explanations given to us and based on our audit amaterial weakness has been identified in the Company's internal financial controls overfinancial reporting as at 31st March 2017 with respect to the recognition of interestincome on income tax refunds.

A 'material weakness' is a deficiency or a combination of deficiencies in internalfinancial control over financial reporting such that there is a reasonable possibilitythat a material misstatement of the company's annual or interim financial statements willnot be prevented or detected on a timely basis.

Qualified Opinion

In our opinion to the best of our information and according to the explanations givento us except for the possible effects of the material weakness described in Basis forQualified Opinion paragraph above on the achievement of the objectives of the controlcriteria the Company has maintained in all material respects adequate internalfinancial controls over financial reporting and such internal financial controls overfinancial reporting were operating effectively as of 31st 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.

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 31st March 2017 and the materialweakness has affected our opinion on the said standalone financial statements of theCompany and we have issued a qualified opinion on the standalone financial statements ofthe Company.

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of the fixed assets.

(b) Some of the fixed assets were physically verified during the year by the Managementin accordance with a programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed / transfer deed/ conveyancedeed provided to us we report that the title deeds comprising all the immovableproperties of buildings which are freehold are held in the name of the Company as at thebalance sheet date.

(ii) The Company does not have any inventory and hence reporting under clause (ii) ofCARO 2016 is not applicable.

(iii) The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the Register maintained underSection 189 of the Companies Act 2013.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of making investments as applicable. The Company has not granted anyloans or provided guarantees and securities.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public to which the directives issued by the Reserve Bankof India and the provisions of section 73 to 76 or any other relevant provisions of theAct and the Companies (Acceptance of Deposit) Rules 2014 as amended would apply.Accordingly clause (v) of CARO 2016 is not applicable to the Company.

(vi) Having regard to the nature of Company's business /activities reporting underclause (vi) of CARO 2016 is not applicable.

(vii) According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Sales tax Income-tax Service Tax and other material statutorydues applicable to it with the appropriate authorities. Other dues mentioned in clause(vii) (a) of CARO 2016 were not applicable to the Company during the year.

(b) There were no undisputed amounts payable in respect of Provident Fund Sales TaxIncome-tax Service Tax and other material statutory dues in arrears as at 31st March2017 for a period of more than six months from the date they became payable. Other duesmentioned in clause (vii) (b) of CARO 2016 were not applicable to the Company during theyear.

(c) There are no dues of Income-tax Service Tax Customs Duty Excise Duty and ValueAdded Tax which have not been deposited as on 31st March 2017on account of disputes.

Details of dues of Sales Tax which have not been deposited as on 31st March 2017 onaccount of disputes are given below:

Name of Statute Nature of Dues Forum where Dispute is pending Period to which the amount relates Amount (Rs. in lacs)
Central Sales Tax Act1956 Tax and Penalty Sales Tax Tribunal 1989-90 to 1994-95 15.89

(viii) The Company has not taken any loans or borrowings from financial institutionsbanks and government and has not issued any debentures. Hence reporting under clause(viii) of CARO 2016 is not applicable to the Company.

(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 (ix) ofCARO 2016 is not applicable.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us theCompany has not paid any managerial remuneration during the year. Hence reporting underclause (xi) of CARO 2016 is not applicable to the Company.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of CARO2016 is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or directors of its subsidiary companies or persons connected with them andhence provisions of section 192 of the Companies Act 2013 are not applicable.

(xvi) The Company was required to be registered under section 45-I of the Reserve Bankof India Act 1934 and it had obtained the registration but for the reasons stated in Note1 to the standalone financial statements during FY 2016-17 the Company had requested theReserve Bank of India (RBI) for surrender of the Certificate of Registration (CoR) andbased on the Company's request RBI has issued an order cancelling CoR issued to theCompany with effect from 8th March 2017.

For C. C. Chokshi& Co.
Chartered Accountants
(Firm's Registration No. 101876W)
Gaurav J. Shah
Place: Ahmedabad Partner
Date: 17th May 2017 (Membership No. 35701)