Independent Auditor's Report
To the Members of GDL Leasing & Finance Ltd.
Report on the Financial Statements
We have audited the accompanying financial statements of GDL Leasing &Finance Ltd. ("the Company") which comprise the Balance Sheet as atMarch 31 2017 the Statement of Profit and Loss for the year ended on March 31 2017 andCash Flow Statement for the year then ended and a summary of significant accountingpolicies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that 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 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.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments; theauditor considers internal financial control relevant to the Company's preparation andfair presentation Address: 16/3 W.E.A. 302 Ajiesh House Abdul Aziz Road Karol BaghNew Delhi- 110005 Tel: (O) 28754655; (M) 9811171860 of the financial statements that givea true and fair view in order to design audit procedures that are appropriate in thecircumstances but not for the purpose of expressing an opinion on whether the Company hasin place an adequate internal financial controls system over financial reporting and theoperating and effectiveness of such controls. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
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 March 31 2017 and its Profit/Loss and its cash flow for the year ended on thatdate.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")as amended issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement onthe matters specified in paragraphs 3 and 4 of the Order.
2. 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 purpose 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 written representations received from the directors as on March 312017 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2017 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
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 opinion and to thebest 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 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 requisite disclosures in the financial statements asregards its holding and dealings in Specified Bank Notes as defined in the NotificationS.O. 3407(E) dated the 8thNovember2016 of the Ministry of Finance during the period from8th November 2016 to 30th December 2016. Based on audit procedures performed and therepresentations provided to us by the management we report that the disclosures are inaccordance with the books of account maintained by the Company and as produced to us bythe Management.
For and on behalf of
Darshan Lal Galhotra
Firm's Registration No:010126N
Membership No: 088863
Place: New Delhi
"Annexure A" to the Independent Auditors' Report
i. Referred to in paragraph 1 under the heading Report on Other Legal &Regulatory Requirement' of our report of even date to the financial statements of theCompany for the year ended March 31 2017:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
b) The Fixed Assets have been physically verified during the year by the management inaccordance with regular programme of verification which in our opinion is reasonablehaving regard to the size of the company and nature of its business. According to theinformation and explanation given to us no material discrepancies were noticed on suchverification.
c) The Company does not have any immovable properties of freehold or leasehold land& Building and hence reporting under clause (i)(c) of CARO 2016 is not applicable.ii. The Company does not hold any inventory hence does not require the physicalverification of
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 section 185 and I86 of the Companies Act 2013In respect of loans investments guarantees and security. The provisions as contained inSection 185 and 186 of the act are not applicable to GDL since GDL is a NBFC providingloans and advances to customers in the ordinary course of business.
v. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.
vi. The provisions as contained in section 148 of the Companies Act 2013 with respectto maintenance of cost records are not applicable to the Company
vii. According to information and explanations given to us and on the basis of ourexamination of the books of account and records the Company has been generally regularin depositing undisputed statutory dues including Income-Tax and Service Tax and anyother statutory dues with the appropriate authorities. According to the information andexplanations given to us no undisputed amounts payable in respect of the above were inarrears as at March 31 2017 for a period of more than six months from the date on whenthey become payable.
According to the information and explanation given to us there are no dues of incometax sales tax service tax duty of customs duty of excise value added tax outstandingon account of any dispute. viii. In our opinion and according to the information andexplanations given to us the Company has not defaulted in the repayment of dues to banks.The Company has not taken any loan either from financial institutions or from thegovernment and has not issued any debentures. ix. Based upon the audit proceduresperformed and the information and explanations given by the management the company hasnot raised moneys by way of initial public offer or further public offer including debtinstruments and term Loans. Accordingly the provisions of clause 3 (ix) of the Order arenot applicable to the Company and hence not commented upon.
x. Based upon the audit procedures performed and the information and explanations givenby the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year.
xi. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;
xii. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 4
(xii) of the Order are not applicable to the Company.
xiii. In our opinion all transactions with the related parties are in compliance withsection 177 and
188 of Companies Act 2013 and the details have been disclosed in the FinancialStatements as required by the applicable accounting standards. However during the yearthere were no transactions with related parties.
xiv. Based upon the audit procedures performed and the information and explanationsgiven by
the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the provisions of clause 3 (xiv) of the Order are not applicable tothe Company and hence not commented upon.
xv. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.
xvi. The company has been registered under section 45 IA of the Reserve Bank of IndiaAct 1934 as Non-Banking Finance Company and accordingly the provisions of clause 3 (xvi)of the Order have been complied with.
For & behalf of:
D.Galhotra & Associates
Darshan Lal Galhotra
Firm's registration number: 010126N
Membership number: 088863
Place: New Delhi
"Annexure B" to the Independent Auditor's Report of even date on theFinancial Statements of GDL Leasing & Finance limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of
Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of GDL Leasing& Finance limited ("the Company") as of March 31 2017 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control overfinancial reporting criteriaestablished by the Company considering theessential components of internal control statedin the Guidance Note onAudit of Internal Financial Controls over Financial Reportingissued by theInstitute 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 deemed to be prescribed under section 143(10)of the Companies Act 2013 to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal Financial Controls and both issued bythe Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 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 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.
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 2017 based on theinternal control overfinancial reporting criteria established by the Company consideringtheessential components of internal control stated in the Guidance Noteon Audit ofInternal Financial Controls Over Financial Reporting issuedby the Institute of CharteredAccountants of India.
For and on behalf of
Darshan Lal Galhotra
FirmRegistration No. 010126N
Membership No. 088863
Place: New Delhi