TO THE MEMBERS
COMFORT FINCAP LIMITED
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of Comfort Fincap Limited("the Company") which comprise the Balance Sheet as at March 31 2019 theStatement of Profit and Loss and the Statement of Cash Flows for the year ended on thatdate and notes to the financial statements including a summary of the significantaccounting policies and other explanatory information (hereinafter referred to as"the financial statements").
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 Basis for Qualified Opinionsection of our report the aforesaid financial statements give the information required bythe Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Accounting Standards and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2019the profit and its cash flows for the year ended on that date.
Basis for Qualified Opinion
The Company has not provided for defined benefit obligation in the nature of gratuitybased on the requirement of Accounting Standard-15 (Revised) i.e. "EmployeeBenefit" which requires defined benefit obligation to be recognised based onactuarial valuation basis. In absence of valuation we are unable to quantify the impact ofabove on the net profit for the year and liabilities as on reporting date.
We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules made thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our qualified opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
Except for the matter described in the Basis for Qualified Opinion Section we havedetermined that there are no other key audit matters to communicate in our report.
Information Other than the Financial Statements
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
Responsibilities of Management for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Accounting Standards specified under Section 133 of TheAct read with Rule 7 of the Companies (Accounts) Rules 2014. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
Those Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
Report on Other Legal and Regulatory Requirements
As required by Section 143(3) of the Act based on our audit 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 including the Statement of CashFlow dealt with by this Report are in agreement with the relevant books of account.
d) In our opinion the aforesaid financial statements comply with the Accountingstandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014 except as described in Basis for Qualified Opinion paragraph.
e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct.
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 B".
g) 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 in our opinionand to the best of our information and according to the explanations given to us:
I. The Company does not have any pending litigations which would impact its financialposition.
II. The Company has made provision as required under the applicable law or accountingstandards for material forseeable losses if any on long-term contracts includingderivative contracts.
III. There has been no delay in transferring any amount to be transferred to InvestorEducation and Protection fund by the Company.
For A.R. Sodha & Co.
Place : Mumbai
Date : 20th May 2019
ANNEXURE A TO AUDITORS'S REPORT
On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us we report that:
1. a) According to information and explanations given to us and records furnishedbefore us the company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b) The fixed assets have been physically verified by the Management at reasonableintervals. In our opinion the frequency of verification is reasonable with regard to thesize of the company and nature of assets. According to information and explanations givento us by the management no material discrepancy was noticed on such verification.
c) The company does not have any immovable property and accordingly reporting underclause 3(i)(c) not applicable.
2. a) The stock in trade of shares and securities held in dematerialized format havebeen verified from the relevant statements received from the depositories during the yearby the management.
b) In our opinion and according to the information and explanations given to us theprocedures of verification of shares and securities followed by the management arereasonable and adequate in relation to the size of the company and the nature of itsbusiness.
c) In our opinion and on the basis of our examination of the records the Company isgenerally maintaining proper records of its inventories. No material discrepancy wasnoticed on verification of stock of shares and securities by the management as compared tobook records.
3. According to the information and explanation given to us and on the basis of recordsfurnished before us company has granted unsecured loans to three parties covered in theregister maintained under section 189 of the Companies Act 2013.
a) The terms and conditions of the grant of such loans are not prejudicial to theinterest of the company.
b) According to information and explanation given to us the loan is repayable on demandand has been repaid as and when demanded. Interest has been served on a regular basis.
c) Loan has been repaid as and when demanded and hence there is no overdue amount.
4. According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has complied with the provisions ofsection 185 and 186 of the Companies Act 2013 with respect to the loans given. Howeverthe company has not given any guarantees and security or made any investment undersection 185 and 186 of the Companies Act 2013.
5. According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has not accepted any deposits within themeaning of section 73 to 76 from public during the year. Accordingly clause 3(v) ofCompanies (Auditor's Report) Order 2016 is not applicable.
6. According to the information and explanation given to us the Company is not requiredto maintain cost records as specified under section 148 sub-section (1) of the CompaniesAct 2013. Accordingly clause 3(vi) of Companies (Auditor's Report) Order 2016 is notapplicable.
7. a) According to the information and explanations given to us and records examined byus the Company is generally regular in depositing of undisputed statutory dues withrespect to Provident fund Goods and Service Tax Income Tax Tax Deducted at Source andService tax. According to information and explanation given to us and records examined byus no undisputed statutory dues including Provident Fund Employee State Insurance IncomeTax Goods and Service Tax Cess is outstanding as at 31st March for more than six monthsfrom the date they become payable.
b) According to information and explanation given to us and the records of the Companyexamined by us there are no statutory dues which have not been paid on account of anydispute.
8. According to the information and explanation given to us and records examined by usthe Company has not defaulted in repayment of dues to any financial institution or bank asat the Balance Sheet date.
9. According to information and explanation given to us by the management and recordsfurnished before us the company has not raised money by way of initial public offer andthe term loan raised during the year has been applied for the purpose for which they havebeen obtained.
10. During the course of our examination of the books and records of the Companycarried out in accordance with generally accepted auditing practices in India andaccording to the information and explanation given to us we have neither come across anyinstance of fraud on or by the Company by its officers and employees during the period norwe have been informed of such instances by the Management. Accordingly reporting underclause 3(x) of Companies (Auditor's Report) Order 2016 is not applicable.
11. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V of the Act.
12. The Company is not a Nidhi Company hence reporting under clause 3(xii) of Companies(Auditor's Report) Order 2016 is not applicable to the Company.
13. The Company has entered into transactions with related parties in compliance withthe provisions of Section 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required to be disclosedunder applicable Accounting Standard.
14. According to the information and explanation given to us and based on ourexamination of the records of the company the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly clause 3(xiv) of the Companies (Auditor's Report) Order 2016 is notapplicable.
15. According to the information and explanation given to us the company has notentered into any non-cash transaction with directors or persons connected with them.Accordingly reporting under clause 3(xv) of the Companies (Auditor's Report) Order 2016is not applicable.
16. The Company is non-banking financial company and is registered under section 45-IAof the Reserve Bank of India Act 1934.
For A.R. Sodha & Co.
Place : Mumbai
Date : 20th May 2019
ANNEXURE B TO AUDITORS'S REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of ComfortFincap Limited ("the Company") as of March 31 2019 in conjunction with ouraudit of the standalone Ind AS 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 (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated 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 judgment 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 audit opinion on the Company's internal financial controls systemover 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized 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.
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 March 31 2019 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 ICAI.
For A.R. Sodha & Co.
Place : Mumbai
Date : 20th May 2019