The Members of
NALIN LEASE FINANCE LTD. Himatnagar
Report on the Financial Statements
We have audited the accompanying financial statements of NALIN LEASE FINANCE LTD.("the company") which comprise the Balance Sheet as at 31 March 2018 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary 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 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 anddisclosures in the financial statements. The procedures selected depend on our judgmentincluding the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments we considersinternal financial control relevant to the Company's preparation of the financialstatements that give true and fair view in order to design audit procedures that areappropriate in the circumstances. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of the accounting estimates made byCompany's Directors as well as evaluating the overall presentation of the financialstatements. We believe that the audit evidence we have obtained is sufficient andappropriate to provide 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;
a) In the case of the Balance Sheet of the state of affairs of the Company as at March31 2018; b) In the case of the Statement of Profit and Loss of the profit for the yearended on that date; and c) In the case of the Cash Flow Statement of the cash flows forthe 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 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 appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith 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 31 March2018 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2018 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"; and
g) With respect to the other matters to be included in the Auditor's Report and inaccordance with rule 11 of the companies (Audit & Auditors) Rule 2014 in our opinionand to the best of our information and according to the explanations given to us: i. TheCompany does not have any pending litigation which would impact its financial positionsii. 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 wererequired to be transferred to the
. Investor Education and Protection Fund by the Company.
Annexure to the Independent Auditors' Report
The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the financial statements for the year ended 31 March 2018 we report that:
3 (a) (i) In our opinion the Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.
(b) The Company has a regular program of physical verification of its fixed assets bywhich fixed assets are verified in a phased manner over a period of three years. Inaccordance with this program certain fixed assets were verified during the year and nomaterial discrepancies were noticed on such verification. In our opinion this periodicityof physical verification is reasonable having regard to the size of the Company and thenature of its assets.
(c) According to the information and explanation given to us and based on theexamination of the registered sale deed/transfer deed/conveyance deed/other corroborativeevidence provided to us we report that the title deeds comprising all the immovableproperties of land and building which are freehold we held in the name of the company asat the balance sheet date. The company had not entered in to any lease till the end of thefinancial year.
3(ii)(a) The Company is a finance company and it does not hold any physical inventoriesexcept stationery & Adhesive Stamp. Hence paragraph 3(ii) of the Order is notapplicable.
(b) In our opinion and based on information provided to us no material discrepancieswere noticed and in the absence of the same commenting on dealing with the books ofaccounts does not arise
3 (iii) Based on information given to us during the year the company has not grantedany loans secured or unsecured loan to any party covered in the register maintained underSection 189 of Companies Act 2013.
3 (iv) Based on information given to us during the year the company has not granted anyloans investments guarantees and securities to any party as specified under Section 185and 186 of Companies Act 2013.
3 (v) In our opinion the company has not accepted deposits. Hence commenting on thefollowing does not arise. The company's compliance with directives issued by the ReserveBank of India and the provisions of sections 73 to 76 or any other relevant provisions ofthe Companies Act 2013 and the rules framed there under wherever applicable The natureof contraventions Whether any order has been passed by the Company Law Board or NationalCompany Law Tribunal and the company's compliance with the same
3 (vi) To the best of our knowledge and explanation given to us the provision ofmaintenance of cost records under sub-section (1) of section 148 of the Act is notapplicable to the company.
3 (vii)(a) In our opinion and according to information and explanation given to us andaccording to records of the company the company has been regular in depositing undisputedstatutory dues including Provident fund Employee's state insurance Income Tax SalesTax Goods & Service Tax Service Tax Duty of customs Duty of Excise Value addedtax cess and other material statutory dues with the appropriate authorities. There is notarrears of statutory dues as at 31st March 2018 which are outstanding for a period of morethan 6 Months from the date they becomes payable.
(b) According to the information and explanations given to us there are no materialdues of income-tax sales tax service tax duty of customs and excise and cess which havenot been deposited with the appropriate authorities on account of any dispute.
3 (viii) In our opinion and based on information given to us the company has notdefaulted in repayment of dues to the banks.
3 (ix) During the year under Audit the Company has not raised moneys by way of IPO orFurther Public Offer including debts instruments and term loans.
3 (x) According to the information and explanations given to us No fraud by theCompany or any fraud on the Company by its officers or employees has been noticed orreported during the year.
3 (xi) In our opinion managerial remuneration has been paid or provided in accordancewith the requisite approvals mandated by the provisions of section 197 read with scheduleV to the Companies Act.
3 (xii) As the company is not Chit Fund/ Nidhi/ Mutual Benefit Fund/Society to whichthe provisions of special statute relating to Nidhi Company/Chit Fund are applicable andhence such clause is not applicable.
3(xiii) Based upon the audit procedure performed and according to the information andexplanation given to us All transactions with related parties are in compliance withsection 177 and 188 of the act where applicable and the details have been specified in Noteno. 28 of the financial statements of the company.
3(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review hence thispara is not applicable.
3(xv) The company had not entered into any non-cash transactions with the directors orpersons connected with him under section 192 of the Act.
3(xvi) The Company is registered with RBI as NBFC and has Certificate of registrationbearing No. 01.00242 under Section 45IA of the Reserve bank of India Act 1934.
"Annexure B" to the Independent Auditor's Report of the even date of theStandalone Financial Statements of NALIN LEASE FINANCE LIMITED
(Report on Other Legal and Regulatory Requirements' section of our report of even dateto the Members of NALIN LEASE FINANCE LTD)
Report on the Internal Financial Controls 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 NALINLEASE FINANCE LTD ("the Company") as of March 31 2018 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 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe 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 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 authorizations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized 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 to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2018 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
For Paresh Thothawala & Co.
Firm Reg. No. 114777W
CA Paresh Thothawala
Membership No. 048435