TO THE MEMBERS OF LEAD FINANCIAL SERVICES LIMITED
Report on the financial statements
We have audited the accompanying financial statements of LEAD FINANCIAL SERVICESLIMITED ("the Company") which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss and Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the financial statements
The Company's Board of Directors is responsible for the matters in section 134(5) ofthe Companies Act 2013 ("the Act") with respect to the preparation of thesefinancial statements that give a true and fair view of the financial position financialperformance and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the Accounting Standards specified under Section133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes the maintenance of adequate accounting records in accordancewith the provision of the Act for safeguarding of the assets of the Company and forpreventing and detecting the frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of internal financial control thatwere operating 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 there under.
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 anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit procedures thatare appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting policies used andthe reasonableness of the accounting estimates made by Company's Directors as well asevaluating the overall presentation of 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 financial statements give the information required by the Actin the manner 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 2017 and its profit and its cash flows for the year ended on that date.
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 inparagraphs 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 purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books.
(c) The Balance Sheet The Profit and Loss Account and Cash Flow Statement dealt within 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 31 March2017 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 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 "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 :
a. The Company does not have any pending litigations which would impact its financialposition in its financial statement
b. The Company did not have any long-term contracts including derivatives contractswhere any provisions for material foreseeable losses is required under any law oraccounting standards.
c. There were no amounts required to be transferred to the Investor Education andProtection Fund by the Company.
d. The Company has provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016. Based on audit procedures and relying on the managementrepresentation we report that the disclosures are in accordance with books of accountmaintained by the Company and as produced to us by the Management.
Annexure "A" to Independent Auditor's Report
The Annexure referred to in paragraph 1 under the heading Report on Other Legal& Regulatory Requirements' of our report to the members of LEAD FINANCIAL SERVICESLIMITED ("the Company") for the year ended March 31 2017. We report that:
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) According to the information and explanations given to us fixed assets have beenphysically verified by the management at reasonable intervals. No material discrepancieswere noticed on such verification.
(c) The title deeds of immovable properties shown as investment property are held inthe name of the Company.
ii. According to the information and explanations given to us physical verification ofinventory has been conducted at reasonable intervals by the management. No materialdiscrepancies were noticed on such verification.
iii. According to the Information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited Liability Partnershipor other parties covered in the register maintained under section 189 of the CompaniesAct 2013. iv. In our opinion and according to the information and explanations given tous the company has complied with the provisions of section 185 and 186 of the CompaniesAct 2013 in respect of loans investment guarantees and security.
v. In our opinion and according to the information and explanations given to us thecompany has not accepted any deposits from public to which the directives issued byReserve Bank of India and provisions of sections 73 to 76 or any other relevant provisionsof the Companies Act 2013 and the applicable rules framed there under apply. Furtherno order has been passed by the Company Law Board or National Company Law Tribunal orReserve Bank of India or any court or any other tribunal.
vi. The maintenance of cost records has not been specified by the Central Governmentunder sub-section (1) of section 148 of the Companies Act 2013.
vii. (a) According to the information and explanations given to us and according to thebooks and records produced before us the company is regular in depositing undisputedstatutory dues including incometax cess and any other statutory dues as applicableto it to the appropriate authority. There are no arrears of outstanding statutory dues ofas on the last day of the financial year concerned for a period of more than six monthsfrom the date they became payable.
(b) According to the information and explanations given to us there are no dues ofincome tax which have not been deposited on account of any dispute. viii. According to theinformation and explanations given to us the Company did not have any loan or borrowingsfrom any financial institution bank Government or dues to debenture holders.
ix. Based upon the audit procedure performed and the information and explanations givenby the management the Company has not raised moneys by way of initial public offer orfurther public offer (including debt instrument) or term loans.
x. Based upon the audit procedures performed and the information and explanations givento us by the management no fraud by the company or any fraud on the Company by itsofficer or employees has been noticed or reported during the year xi. Based upon the auditprocedures performed and the information and explanations given by the management themanagerial remuneration has been paid or provided in accordance with the requisiteapprovals mandated by the provision of section 197 read with Schedule V to the CompaniesAct.
xii. The Company is not a Nidhi Company. xiii. According to the information andexplanations given by the management all transactions with the related parties are incompliance with section 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the Financial Statements etc. as required by the applicableaccounting standards. xiv. According to the information and explanation given by themanagement the Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.
xv. According to the information and explanation given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim.
xvi. According to the information and explanations given by the management the companyis required to be registered under section 45-IA of the Reserve Bank of India Act 1934and has obtained registration accordingly.
Annexure "B" to the Independent Auditor's Report
The Annexure referred to in paragraph 1 (f) relating to Report on Internal FinancialControls under the heading of "Report on Other Legal and RegulatoryRequirements" of our report to the members of LEAD FINANCIAL SERVICES LIMITED ("the Company") for the year ended on 31st March 2017. We report that:"We have audited the internal financial controls over financial reporting of LEADFINANCIAL SERVICES LIMITED ("the Company") as of March 31 2017 in conjunctionwith our audit of the 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 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 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 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 March 31 2017 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
REPORT AS REQUIRED UNDER NON-BANKING FINANCIAL COMPANIES AUDITOR'S REPORT (RESERVEBANK) DIRECTIONS 2016
We have examined the books of account and records maintained by Lead Financial ServicesLimited for the Financial Year 2016-17. On the basis of such examination and according tothe information and explanations provided to us we report as under:
1. The company is engaged in the business of Non - Banking Financial institution asdefined in section 45-I (a) of the RBI Act and meeting the Principal Business Criteria(Financial asset/ Income pattern) as laid down vide the Bank's press release dated April08 1999 and directions issued by DNBR. The company has obtained a Certificate ofRegistration from the Reserve Bank of India.
2. The Company is entitled to hold such Certificate of Registration in terms ofPrincipal Business Criteria (Financial asset/ Income pattern) as on March 31 2017.
3. The company is meeting the required net owned fund requirement as laid down inMaster Direction - Non-Banking Financial Company - Non-Systemically Important Non-Deposittaking Company (Reserve Bank) Directions 2016.
4. The Board of Directors in their meeting held on 29.05.2017 has passed a resolutionfor non-acceptance of any public deposits.
5. The company has not received any public deposits during the financial year 2016-17.
6. The company has duly complied with the prudential norms relating to incomerecognition accounting standards asset classification and provisioning for bad anddoubtful debts as applicable to it in terms of Non-Banking Financial Company -Non-Systemically Important Non-Deposit taking Company (Reserve Bank) Directions 2016.
| ||For G.C. SHARDA & CO. |
| ||Chartered Accountants |
| ||Firm Registration Number: 500041N |
| ||CA. Gopal Chandra Sharda |
| ||Partner |
| ||Membership No. 071920 |
|Place: New Delhi || |
|Date: 29/05/2017 || |