TO THE MEMBERS OF HB LEASING & FINANCE COMPANY LIMITED
Report on the Financial Statements Opinion
We have Audited the accompanying Financial Statements of HB LEASING & FINANCECOMPANY LIMITED ("the Company") which comprise the Balance Sheet as at 31stMarch 2019 the Statement of Profit and Loss and Cash Flow Statement for the year thenended and notes to the Financial Statements including a summary of Significant AccountingPolicies and other explanatory information.
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 Companies Accounting Standard prescribed under section133 of the Act read with the Companies (Accounts) Rules 2014 as amended and otherAccounting Principles generally accepted in India of the state of affairs of the Companyas at 31st March 2019 and its Loss and its Cash Flows for the year ended onthat date.
Basis of Opinion
We conducted our Audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with Code of Ethicsissued by the Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our Audit of the Financial Statements under theprovisions of the Companies Act 2013 and the Rule thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the Audit Evidence we have obtained is sufficient and appropriateto provide a basis of our opinion.
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 Board of Directors are responsible for the other information. The otherinformation comprises the Directors Report to be included in the Company's Annual Reportbut does not include the Financial Statements and our Auditor's Report thereon. The otherinformation is expected to be made available to us after the date of this Auditors'Report. Our opinion on the Financial Statements does not cover the other information andwe 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 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 and cash flows ofthe Company in accordance with Accounting Principles generally accepted in India includingthe Accounting Standards specified under Section 133 of the Act. 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 view and are free from materialmisstatement 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. The Board of Directors is also responsible for overseeing theCompany's Financial Reporting process.
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 ofthese 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 Financial Statementswhether due to fraud or error design and perform Audit procedures responsive to thoserisks and obtain Audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of Internal Control.
Obtain an understanding of Internal Control relevant to the Audit in order to designAudit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of theAct 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 reasonableness ofaccounting estimates and related disclosures made by the 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 ability to continue as agoing concern. If we conclude that a material uncertainty exists we are required to drawattention in our Auditor's Report to the related disclosures in the Financial Statementsor if such disclosures are inadequate to modify our opinion. Our conclusions are basedon the Audit evidence obtained up to the date of our Auditor's
Report. However future events or conditions may cause the Company to cease to continueas a going concern.
Evaluate the overall presentation structure and content of the Financial Statementsincluding the disclosures and whether the Financial Statements represent the underlyingtransactions 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 deficiencies inInternal 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 2019 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 in theparagraph 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 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 31stMarch2019 taken on record by the Board of Directors none of the Directors is disqualified ason 31st March 2019 from being appointed as a Director in terms of Section 164(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"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 has disclosed the impact of pending litigations as at 31stMarch 2019 on its financial position in its Financial Statements Refer Note No. 28
ii. The Company did not have any Long-Term Contracts including Derivative Contracts asat 31st March 2019
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 31stMarch 2019 to its Directors.
| ||FOR G. C. AGARWAL & ASSOCIATES |
| ||CHARTERED ACCOUNTANTS |
| ||Firm Registration No.: 017851N |
| ||Sd/- |
| ||G. C. AGARWAL |
|PLACE : GURUGRAM ||(PROPRIETOR) |
|DATED : 30/05/2019 ||Membership No. 083820 |
ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT
The Annexure referred to in Independent Auditor's Report to the members of HBLeasing & Finance Company Limited on the Financial Statements for the year endedon 31st March 2019 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. As explained to us inventories have been physically verified by the management atreasonable intervals during the year. As explained to us the discrepancies noticed onphysical verification of inventory as compared to the book records were not material.
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 includingProvident Fund Employees' State Insurance Income Tax Sales-Tax Goods and Service TaxCustoms Duty Excise Duty Value Added Tax Cess and other Statutory Dues to the extentand as applicable to the Company have been generally regularly deposited by the Companyduring 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 2019 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 :
|Sr. No ||Name of the statute ||Nature of the Dues ||Period (A.Y.) ||Forum where Dispute is pending ||Amount (Rs.) |
|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 INDEPENDENT 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 & Finance Company Limited ("the Company") as of 31stMarch 2019 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. Webelieve that the Audit evidence we have obtained is sufficient and appropriate to providea basis for our Audit opinion on the Company's Internal Financial Controls System overFinancial 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Financial Statements in accordance with generally accepted AccountingPrinciples and that receipts and expenditures of the Company are being made only inaccordance with authorisations of management and Directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial 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 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 : 30/05/2019 ||Membership No. 083820 |