The Members of K. Z. LESING AND FINANCE LIMITED
Report on the audit of the financial statements Opinion
We have audited the financial statements of K. Z. LEASING AND FINANCE LIMITED("the Company") which comprise the balance sheet as at March 31 2021 and thestatement of profit and loss (including other comprehensive income) the statement ofchanges in equity and the statement of cash flows for the year then ended and notes tothe financial statements including a summary of significant accounting policies and otherexplanatory information. In our opinion and to the best of our information and accordingto the explanations given to us the aforesaid financial statements give the informationrequired by the Companies Act 2013 ("Act") in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the Company as at March 31 2020 and its profit totalcomprehensive income the changes in equity and cash flows for the year ended as on thatdate.
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 Standards arefurther 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 thereunder 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
In our opinion and based on the information and explanations given to us there are noother key audit matters to be communicated in our report other than those morefullydescribed in the Emphasis of Matters paragraph of our report which describes theuncertainties and the impact of Covid-19 pandemic on the Company's operations and resultsas assessed by the management.
Principal Audit Procedures
We assessed the Company's process to identify assess and respond to risks of materialmisstatement considering the uncertainties and the impact of Covid-19 pandemic on theCompany's operations and results for the year under consideration As part of theevaluation of whether sufficient appropriate audit evidence has been obtained we haveevaluated the appropriateness of our initial risk assessments and revises previous riskassessments in light of the COVID-19 crisis for certain financial statement areasincluding disclosures We have considered the impact on the processes and controls that maybe affected by necessary changes to business processes in light of circumstances such astravel restrictions or as a result of remote working arrangements. We have designedperformed new procedures and modified previously planned audit procedures as a result ofthe necessity for carrying out the audit procedures remotely including verification ofthe source and completeness of data provided for audit. This includes performingalternative audit procedures to obtain audit comfort in respect of significant accountbalances for recognition measurement and disclosures. We have audited the management'sestimates required in the financial statements including but not limited to estimatesrelated to expected credit loss impairment analyses by checking the reasonableness ofunderlying assumptions in making those key estimates. We specifically discussed the impactof COVID-19 with the management and critically challenged the key assumptions and theirreasonableness in making such key accounting estimates We have considered the basis ofmanagement judgment in determining impact on the financial statements of any subsequentevents related to the COVID-19 pandemic taking into consideration the date of thefinancial statements the facts and circumstances pertaining to the entity and theconditions that existed at or arose after that date. As the impacts of the COVID-19outbreak continue to evolve including regulatory restrictions/ conditions capturingevents that relate specifically to conditions that existed at the date of the financialstatements or after the date of the financial statements we have considered allsubsequent events and transactions to substantiate our conclusions on the appropriatenessof management's assessment of the Covid'19 impact. We have carried out a detailed analysisof data and performed additional analytical procedures for validating the management'sassessment of impact due to covid'19 related uncertainties We have considered management'sadjustments or disclosures which includes the impact of the changes in the environment onthe recognition and measurement of account balances and transactions in the financialstatements or other specific disclosures.
Emphasis of Matter
As more specifically explained in Note 2 to the financial statements the Company hasmade a detailed assessment of its liquidity position for the next year and therecoverability and carrying value of its assets comprising property plant and equipmentinvestments and trade receivables. Based on current indicators of future economicconditions the Company expects to recover the carrying amount of these assets. TheCompany continues to evaluate them as highly probable considering the orders in hand. Thesituation is changing rapidly giving rise to inherent uncertainty around the extent andtiming of the potential future impact of the COVID-19 pandemic which may be different fromthat estimated as at the date of approval of the financial results. The Company willcontinue to closely monitor any material changes arising of future economic conditions andimpact on its business. Our opinion is not modified in respect of this matter.
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 ManagementDiscussion and Analysis Board's Report including Annexure 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 thefinancial statements does not cover the other information and we do not express any formof assurance conclusion thereon. In connection with our audit of the financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated. If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
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 Act with respect to the preparation of these financial statements that give atrue and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity of the Company in accordance withthe Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act read withthe Companies (Indian Accounting Standards) Rules 2015 and Companies (Indian AccountingStandards) Rules 2016 as amended from time to time and other accounting principlesgenerally accepted in India. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statement that give a true and fair view and are free frommaterial misstatement whether due to fraud or error. In preparing the financialstatements management is responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so. The board ofdirectors are also responsible for overseeing the Company'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 we exercise professional judgment andmaintain professional skepticism throughout the audit. We also: Identify and assess therisks of material misstatement of the financial statements whether due to fraud or errordesign and perform audit procedures responsive to those risks and obtain audit evidencethat is sufficient and appropriate to provide a basis for our opinion. Obtain anunderstanding of internal control relevant to the audit in order to design auditprocedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 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 usedand the reasonableness of accounting 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 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 financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation. Materiality is themagnitude of misstatements in the financial statements that individually or in aggregatemakes it probable that the economic decisions of a reasonably knowledgeable user of thefinancial statements may be influenced. We consider quantitative materiality andqualitative factors in (i) planning the scope of our audit work and in evaluating theresults of our work; and (ii) to evaluate the effect of any identified misstatements inthe financial statements. We communicate with those charged with governance regardingamong other matters the planned scope and timing of the audit and significant auditfindings including any significant deficiencies in internal control that we identifyduring our audit. We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards. From the matterscommunicated with those charged with governance we determine those matters that were ofmost significance in the audit of the financial statements of the current period and aretherefore the key audit matters. We describe these matters in our auditor's report unlesslaw or regulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest benefits 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 Annexure "A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order. As required by Section 143(3) of the Act wereport that: (a) We have sought and obtained all the information and explanations which tothe best of our knowledge and belief were necessary for the purposes of our audit; (b) Inour opinion proper books of account as required by law have been kept by the Company sofar as it appears from our examination of those books; (c) The balance sheet thestatement of profit and loss and the cash flow statement dealt with by this report are inagreement with the books of account; (d) In our opinion the aforesaid financialstatements comply with the accounting standards specified under section 133 of the Actread with rule 7 of the Companies (Accounts) Rules 2014; (e) On the basis of the writtenrepresentations received from the directors as on March 312020 taken on record by theboard of directors none of the directors is disqualified as on March 31 2020 from beingappointed as a director in terms of Section 164 (2) of the Act; (f) With respect to theadequacy of the internal financial controls over financial reporting of the Company andthe operating effectiveness of such controls refer to our separate report in"Annexure B". Our report expresses an unmodified opinion on the adequacy andoperating effectiveness of the Company's internal financial controls over financialreporting; (g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197 (16) of the Act as amended in ouropinion and to the best of our information and according to the explanations given to usthe remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act; and (h) With respect to the other mattersto be included in the Auditor's Report in accordance with Rule 11 of the Companies (Auditand Auditors) Rules 2014 in our opinion and to the best of our information and accordingto the explanations given to us; a. The Company does not have any pending litigationswhich would impact its financial position; b. The Company did not have any long-termcontracts including derivative contracts for which there were any material foreseeablelosses; and c. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company
|Place : Surat ||For Ranjit Galledar & Co. |
|Date : 30/06/2021 ||Chartered Accountant |
| ||(FRN: 108640W) |
| ||Ranjit Galledar |
| ||Proprietor |
| ||(Mem. No. 033390) |
| ||(UDIN: 21033390AAAAEV9370) |
Annexure "A" to the Independent Auditor's Report*
(Referred to in paragraph 1 under Report on other legal and regulatoryrequirements' section of our report to the members of K.Z.LEASING AND FINANCE LIMITEDof even date)
1. In respect of the Company's fixed assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets of the Company were physically verified in full by the managementduring the year. According to the information and explanations given to us and as examinedby us no material discrepancies were noticed on such verification.
(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date.
In respect of immovable properties of land and building that have been taken on leaseand disclosed as fixed assets in the financial statements the lease agreements are in thename of the Company.
2. The Company is providing financial services and there is no inventory with theCompany this clause is not applicable to the Company.
3. According to information and explanation given to us the company has not grantedany loan secured or unsecured to companies firms limited liability partnerships orother 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 explanation given to us in respectof loans investments guarantees and security the Company has complied with theprovisions of sections 185 and section 186 of the Companies Act 2013.
5. In our opinion and according to the information and explanations given to us thecompany has complied with the directives of the Reserve Bank of India and the provisionsof Sections 73 to 76 or any other relevant provisions of the Act and the rules framedthereunder.
According to the information and explanations given to us no order has been passed bythe Company Law Board or National Company Law Tribunal or Reserve Bank of India or anyCourt or any other Tribunal on the company in respect of the aforesaid deposits.
6. The Central Government of India has not prescribed the maintenance of cost recordsunder sub-section (1) of section 148 of the Act for any of the activities of the companyand accordingly paragraph 3 (vi) of the order is not applicable.
7. In respect of statutory dues:
(a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance income-tax sales- tax service tax goods and service tax duty of customsduty of excise value added tax cess and other material statutory dues have beengenerally regularly deposited during the year by the company with the appropriateauthorities.
According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax sales- taxservice tax goods and service tax duty of customs duty of excise value added tax cessand other material statutory dues were in arrears as at March 31 2021 for a period ofmore than six months from the date they became payable
(b) According to the information and explanations given to us and the records of thecompany examined by us there are no dues of income-tax sales- tax service tax goodsand service tax duty of customs duty of excise and value added tax which have not beendeposited on account of any dispute.
8 In our opinion and according to the information and explanations given to us thecompany has no outstanding dues to any financial institutions or banks or any governmentor any debenture holders during the year. Accordingly paragraph 3 (viii) of the order isnot applicable.
9. The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) and has not taken any term loans during theyear. Accordingly paragraph 3 (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. In our opinion and according to the information and explanations given to us theCompany has paid/ provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.
12. The Company is not a Nidhi Company and accordingly paragraph 3 (xii) of the orderis not applicable to the Company.
13. According to the information and explanations given to us and based on ourexamination of the records of the company transactions with the related parties are incompliance with section 177 and 188 of the Act. Where applicable the details of suchtransactions 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 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 paragraph 3(xiv) of the order is not applicable.
15 According to the information and explanations given to us and based on ourexamination of the records of the company the company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the order is not applicable.
16 According to the information and explanations given to us and based on ourexamination of the records of the company the company is NBFC Registered with undersection 45-IA of the Reserve Bank of India Act 1934.
|Place : Surat ||For Ranjit Galledar & Co. |
|Date : 30/06/2021 ||Chartered Accountant |
| ||(FRN: 108640W) |
(Mem. No. 033390)
"Annexure "B" to the Independent Auditor's Report
(Referred to in paragraph 2 (f) under Report on other legal and regulatoryrequirements' section of our report to the Members of
K.Z.LEASING AND FINANCE LIMITED of even date)
Report on the internal financial controls over financial reporting under clause (i) ofsub - section 3 of section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of K.Z.LEASINGAND FINANCE LIMITED ("the Company") as at March 31 2021 in conjunction withour audit of the financial statements of the Company for the year ended on that date.
Management's responsibility for internal financial controls
The board of directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and errors 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 internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the standards on auditing prescribed under Section 143 (10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. Thosestandards and the guidance note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgement including the assessment of the risks of material misstatement in thefinancial statements whether due to fraud or error. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe Company's internal financial control 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 (i) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (ii) 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 (iii) 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.
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 of 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 and according to the information and explanations given to us theCompany has in all material respects an adequate internal financial control system overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at March 31 2021 based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India.
|Place : Surat ||For Ranjit Galledar & Co. |
|Date : 30/06/2021 ||Chartered Accountant |
| ||(FRN: 108640W) |
|Ranjit Galledar |
|(Mem. No. 033390) |
|(UDIN: 21033390AAAAEV9370) |