THE MEMBERS OF
HB LEASING AND FINANCE COMPANY LIMITED Report on the Audit of the Financial Statements
We have audited the Financial Statements of HB Leasing & Finance Company Limited(the Company) which comprise the Balance Sheet as at 31st March 2020and the Statement of Profit and Loss (including other comprehensive income) Statement ofChanges in Equity and Statement of Cash Flows for the year then ended and notes to theFinancial Statements including a summary of the significant accounting policies and otherexplanatory 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 the aforesaid Financial Statements give the information required by theCompanies Act 2013 (the Act) in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under Section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended(Ind AS) and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2020 and loss and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.
Basis of Opinion
We conducted our audit of the Financial Statements in accordance with the Standards onAuditing (SAs) specified under Section 143(10) of the Act. 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 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 obtained by us is sufficientand appropriate to provide a basis for our opinion on the Financial Statements.
Key Audit Matters
We have determined that there are no key Audit Matters to communicate in our Report.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Management and Board of Directors are responsible for the otherinformation. The other information comprises the Directors Report to be included in theCompany's Annual Report but does not include the Financial Statements and our Auditor'sReport thereon. The other information is expected to be made available to us after thedate of this Auditors' Report. Our opinion on the Financial Statements does not cover theother information and we do not 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 in theAudit or otherwise appears to be materially misstated.
Management's Responsibility for the Financial Statements
The Company's management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these Financial Statementsthat give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe a accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring accuracy and completeness of the accounting records relevant tothe preparation and presentation of the Financial Statements that give a true and fairview and are free from material misstatement whether due to fraud or error.
In preparing the Financial Statements the Management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.
Board of Directors is also responsible for overseeing the Company's financial reportingprocess. Auditors' Responsibility 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 we exercise professional judgment andmaintain 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 Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the 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 also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements for theFinancial Year ended 31st March 2020 and are therefore the key audit matters. We describethese matters in our Auditor's Report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. 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 Act we give in the Annexure A' a statement on the matters specified inthe paragraph 3 and 4 of the Order to the extent applicable.
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 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 other comprehensiveincome) the statement of changes in equity and the Cash Flow Statement dealt with by thisReport 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 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 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 AnnexureB'.
(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 has disclosed the impact of pending litigations as at 31st March2020 on its financial position in its Financial Statements - Refer Note No 35
ii. The Company did not have any long-term contracts including derivative contracts asat 31st March 2020
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
(h) With respect to the matter to be included in the Auditor's Report under Section197(16):
The Company has not paid any managerial remuneration for the year ended 31st March2020 to its directors.
| ||FOR G. C. AGARWAL & ASSOCIATES |
| ||Chartered Accountants |
| ||Firm Registration No.: 017851N |
| ||Sd/- |
| ||G C AGARWAL |
|PLACE: GURUGRAM ||(PROPRIETOR) |
|DATED: 25th JUNE 2020 ||(Membership No. 083820) |
ANNEXURE - A TO THE AUDITORS' REPORT
The Annexure referred to in Independent Auditor's Report to the members of HBLeasing and Finance Company Limited on the Financial Statements for the year ended on31st March 2020 We Report that:
1. a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
b. As explained to us the management during the year has physically verified the fixedassets in a phased periodical manner which in our opinion is reasonable having regard tothe size of the company and nature of its assets. No material discrepancies were noticedon such physical verification
c. The Company does not have any Immovable Property.
2. a. As explained to us inventories (Investment) have been physically verified by themanagement at reasonable intervals during the year. As explained to us the discrepanciesnoticed on physical verification of inventory as compared to the book records were notmaterial.
3. As explained to us the company has not granted any loans Secured or Unsecured toCompanies firms or other parties covered in the register maintained under Section 189 ofthe Companies Act 2013.
4. In our opinion and according to the information and explanations given to us thecompany has complied with the provision of Section 185 and 186 of the Act with respect tothe Loans and Investment made. As per the information and explanations given to us theCompany has not given any guarantee or provided any security in connection with a loan toany other body corporate or person.
5. The Company has not accepted any deposits from the public.
6. The nature of the company's business/activities is such that maintenance of CostRecords under Section 148(1) of the Act is not applicable to the company.
7. a. According to the records of the Company undisputed statutory dues including
Provident Fund Employees' State Insurance Income Tax Sales-Tax Goods and ServiceTax Customs Duty Excise Duty Value added Tax Cess and other Statutory Dues to theextent and as applicable to the Company have been generally regularly deposited by theCompany during the year with the appropriate authorities. According to the information andexplanations given to us no undisputed amounts payable in respect of the aforesaid dueswere outstanding as at 31st March 2020 for a period of more than six months from the dateof becoming payable.
b. The disputed statutory dues aggregating to Rs 416250462/- that have not beendeposited on account of matters pending before appropriate authorities are as under :
|Name of the statute ||Nature of the Dues ||Period (A.Y.) ||Forum where Dispute is pending ||Amount (?) |
|1. Income Tax Act 1961 ||Income Tax ||2009-10 ||Income Tax Appellate Tribunal Delhi ||83526253/- |
|2. Income Tax Act 1961 ||Income Tax ||2010-11 ||Assessing officer (For giving appeal effect) ||3961670/- |
|3. Income Tax Act 1961 ||Penalty (Income Tax) ||2009-10 ||Income Tax Appellate Tribunal ||18028208/- |
|4. Income Tax Act 1961 ||Income Tax ||Block Period 01/04/1987 to 07/08/1997 ||Commissioner of Income Tax (Appeal) ||310734331/- |
| || || ||TOTAL ||416250462/- |
8. The Company does not have any loans or borrowings from any financial institutionbanks government or debenture holders during the year. Accordingly paragraph 3(viii) ofthe Order is not applicable.
9. The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) and term loans during the year. Accordingly paragraph3(ix) of the order is not applicable.
10. In our opinion and according to the information and explanation given to us nomaterial fraud by the company or on the Company by its officers or employees has beennoticed or reported during the course of our audit.
11. According to the information and explanations given to us and based on ourexamination of the record of the Company the Company has not paid/ provided anymanagerial remuneration during the year.
12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the order is notapplicable.
13. According to the information and explanations given to us and based on orexaminations of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransaction have been disclosed in the Financial Statements as required by the applicableaccounting standards.
14. According to the information and explanations given to us and based on ourexamination of the record of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
15. According to the information and explanations given to us and based on ourexamination of the record of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe order is not applicable.
16. The Company is required to be registered under Section 45-IA of the Reserve bank ofIndia Act 1934 and such registration has been obtained by the Company.
ANNEXURE - B TO THE AUDITORS' REPORT
Report on the Internal Financial Control 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 HBLeasing and Finance Company Limited (the Company) as of 31stMarch 2020 in conjunction with our audit of the Financial Statements of the Company forthe year ended on that 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 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 31st March 2020 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 G. C. AGARWAL & ASSOCIATES |
| ||Chartered Accountants |
| ||Firm Registration No.: 017851N |
| ||Sd/- |
| ||G C AGARWAL |
|PLACE: GURUGRAM ||(PROPRIETOR) |
|DATED: 25th JUNE 2020 ||(Membership No. 083820) |