TO THE MEMBERS OF FRANKLIN LEASING AND FINANCE LIMITED
Report on the audit of the Standalone financial statements Opinion
We have audited the accompanying Standalone financial statements of Franklin LeasingAnd Finance Limited ("the Company") which comprise the balance sheet as atMarch 31 2019 and the Statement of Profit and Loss and statement of cash flows for theyear then ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information. In our opinion and to the best ofour information and according to the explanations given to us the aforesaid financialstatements give the information required by the Companies Act 2013 ( Act ) in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2019 its profit (or Loss)* and cash flows for the year ended on that date.
Basis for opinion
We conducted our audit in accordance with the standards on auditing specified undersection 143 (10) of the Companies Act 2013. Our responsibilities under those Standardsare further described in the auditor s responsibilities for the audit of the financialstatements section of our report. We are independent of the Company in accordance with thecode of ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the rules there under and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the code of ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
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.
Information other than the financial statements and auditors' report thereon
The Company s board of directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board sReport including Annexures to Board s Report Business Responsibility Report 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 standalone financial statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information; we are required to report that fact. We have nothing to report in thisregard.
Management's responsibility for the Standalone financial statements
The Company s board of directors are responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these financial statements that give atrue and fair view of the financial position financial performance and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the accounting standards specified under section 133 of the Act. 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 statement that givea true and fair view and are free from material misstatement whether due to fraud orerror. In preparing the financial statements management is responsible for assessing the
Company 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. The board of directors are also responsible for overseeing theCompany s financial reporting process.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor s report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements. As part of an audit in accordance with SAs weexercise professional judgment and maintain professional skepticism throughout the audit.We also:
Identify and assess the risks of material misstatement of the 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management s use of the going concern basisof accounting 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
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. From the matters communicated withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditor s report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
Report on other legal and regulatory requirements
As required by the Companies (Auditor s Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure "A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
The Company is a Non- Banking Financial Company not accepting public deposit and theCertificate of Registration No. B-14-02383 dated 22nd May 2001 from Reserve Bank of Indiahas been issued to the Company: -
a. The Board of Directors of the company has passed a resolution for the non-acceptanceof any public deposits.
b. The company has not accepted any public deposits during the relevant year.
c. The company has complied with the prudential norms relating to income recognitionaccounting standards assets classification and provisioning for bad and doubtful debts asapplicable to it.
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 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 financial statements comply with the accountingstandards specified under section 133 of the Act read with rule 7 of the Companies(Accounts) Rules 2014;
(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 and operatingeffectiveness of such controls refer to our separate report in "Annexure B".Our report expresses an unmodified opinion of the adequacy and operating effectiveness ofthe Company s internal financial controls over financial reporting.
(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;
a. The Company does not have any pending litigations which would impact its financialposition;
b. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; and
c. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
FOR Anil Hariram Gupta & Co.
Firm Regn. No. 327781E
Membership No. 066306
Place : New Delhi
Date : 29th May 2019
ANNEXURE A TO THE AUDITORS' REPORT
(Referred to in Paragraph 1 under the heading of "Report on other Legal andRegulatory Requirements" of our report of even date)
1. The Company does not have Fixed Assets.
2. The inventory has been verified by the management during the year. In ouropinion the frequency of such verification is reasonable. According to the informationand explanations given to us and as examined by us no material discrepancies were noticedon such verification..
3. According to information and explanation given to us the company has notgranted any loan secured or unsecured to companies firms limited liability partnershipsor other parties covered in the register required under section 189 of the Companies Act2013. Accordingly paragraph 3 (iii) of the order is not applicable.
4. In our opinion and according to information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Companies Act 2013in respect of loans investments guarantees and securities.
5. In our opinion and according to the information and explanations given to usthe company has not accepted any deposits and accordingly paragraph 3 (v) of the order isnot applicable.
6. According to information and explanations given to us the Company is notliable to maintain cost records as prescribed under section 148(1) of the Companies Act2013;
7. (a) According to information and explanations given to us the company isregular in depositing undisputed statutory dues including income tax and any otherstatutory dues applicable to it with the appropriate authorities during the year. Therewere no undisputed amounts payable on account of the above dues in arrear as at March 312019 for a period of more than six month from the date they become payable.
(b) According to information and explanations given to us there are no outstandingstatutory dues on the part of Company which is not deposited on account of dispute;
8. In our opinion and according to information and explanations given to us thecompany has not obtained any loans and borrowings from any financial institution bankgovernment or dues to debenture holders and hence question of default of repayment doesnot arise;
9. According to information and explanations given to us the Company has notraised money by way of initial public offer or further public offer. The Company has nottaken any term loans from any bank or financial institution; accordingly paragraph3 (ix) of the order is not applicable.
10. To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no material fraud on the Company by its officersor employees has been noticed or reported during the year.
11. According to information and explanations given to us the Company has paidmanagerial remuneration in accordance with applicable provisions of the Companies Act2013;
12. As per information the Company is not a Nidhi Company hence provisions of sub-clause (xii) of the Paragraph 3 of the Order are not applicable;
13. According to information and explanations given to us all transactions with therelated parties are in compliance with sections 177 and 188 of Companies Act 2013wherever applicable and the details have been disclosed in the financial statements etc.as required by the applicable accounting standards;
14. According to information and explanations given to us and based on the examinationof our records of the company the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review;
15. According to information and explanations given to us and based on the examinationof our records of the company the Company has not entered into non- cash transactionswith directors or persons connected with him. Accordingly paragraph 3(xv) of the order isnot applicable.
16. According to information and explanations given to us the Company is a Non-
Banking Financial Company duly registered under Section 45-1A of the Reserve Bank ofIndia Act 1934.
FOR Anil Hariram Gupta & Co.
Firm Regn. No. 327781E
Membership No. 066306
Place : New Delhi
Date : 29th May 2019
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF FRANKLIN LEASING AND FINANCE LIMITED
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 FRANKLINLEASING AND FINANCE LIMITED as of 31st March 2019 in conjunction with our audit ofthe standalone financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company s management is responsible for establishing and maintaining internalfinancial controls. These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence to companys policies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information 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 168 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor s judgment including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence obtained is sufficient and appropriate to provide a basis for our auditopinion on the Company s internal financial controls 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 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 31st March 2019
FOR Anil Hariram Gupta & Co.
Firm Regn. No. 327781E
Membership No. 066306
Place: New Delhi
Date: 29th May 2019