The Members Of
SHALIBHADRA FINANCE LIMITED
Report on the Audit of the Financial Statements
We have audited the accompanying Financial statements of SHALIBHADRA FINANCE LIMITED("the Company") which comprise the Balance Sheet as at 31 March 2019 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and notes tofinancial statements including a summary of 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 accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2019 the Profit and its Cashflows for the year ended on that date.
Basis for 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 further described in the Auditor sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the company in Accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI) together with the ethical requirements that arerelevant to our audit of the Financial Statements under the provision of the Act and therules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI`s Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our opinion on thefinancial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to becommunicated in our report:
|Key Audit Matters ||How the matter was addressed in our report |
|Revenue Recognition : || |
|Income/ Interest from vehicle loan are accounted for on an accrual basis and are recognized so as to produce a constant periodic return on the amount financed. Sanctioning of Loans : ||We have verified the income / interest on the loans sanctioned on a quarterly basis and it is accounted regularly on mercantile basis. |
|The Company is mainly in the business of Auto finance to Customers for personal use wherein grant of loan is based on personal evaluation of the borrower by the management and security given by hypothecation of the vehicle with RTO registration authority. ||We have checked the control system of authorization sanction of loans the security offered to the Company and down payment made by the Customer. |
|Bank Finance is availed on the stock in trade of receivables from the customers in regular course of business. ||There is no excess amount availed from the banks against eligible stock in trade. |
Information Other than the Financial Statements and Auditors Report thereon
The Company s Board of Directors is responsible for the other information. The Otherinformation comprises the information included in the Directors Report Managementdiscussion & Analysis and Business responsibility report but does not include thefinancial statements and our auditor`s report thereon.
Our opinion on the financial statements does not cover other information and we do notexpress 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 financial statements or ourknowledge obtained during the course of audit or otherwise appears to be materiallymisstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing 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 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 the accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.
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 the Company s financialreporting process.
Auditor's 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 SA`s weexercise professional judgement and maintain 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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by 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 of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor s report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
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 Section 143 (11) of the Act we givein the Annexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder.
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 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 the relevant rule 7 of theCompanies (Accounts) Rules 2014;
e) On the basis of written representations received from the directors as on 31 March2019 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2019 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company`s internal financial controls overfinancial reporting.
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) Rule 2014 as amended inour opinion and to the best of our information and according to the explanation given tous:
i. The Company does not have any pending litigations which shall impact its financialpositions.
ii. The Company does not have any long terms contracts for which provisions arerequired to be made.
iii. The Company is not liable to transfer any amount to the Investor Education andProtection Fund.
Annexure A to the Auditors' Report
The Annexure referred to in paragraph 1 under "Report on Other legal andRegulatory Requirements" section of our Report to the members of the Company on theFinancial Statements for the year ended 31st March 2019.
(i) In respect of its Fixed Assets
1. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
2. As explained to us and according to the practice generally followed by the Companyall the fixed assets have been verified in a periodical manner by the management duringthe year and no material discrepancies were noticed on such physical verification. In ouropinion this periodicity of physical verification is reasonable having regard to the sizeof the Company and nature of its assets. No material discrepancies were noticed onphysical verification.
3. The title deeds of immovable properties are held in the name of the Company.
(ii) In respect of inventories
The Company s inventory include loans sanctioned by the Company hence physicalverification of inventory is not applicable.
(iii) In respect of loans granted secured or unsecured by the Company to firms orother parties covered in the register maintained u/s 189 of the Act;
The Company has not granted any secured / unsecured loan to any of the parties coveredin the register maintained under section 189 of the Act. Accordingly sub clauses (a) (b)and (c) are not applicable.
(iv) In our Opinion and according to the information and explanation given to us TheCompany has complied with the provisions of section 185 and 186 of the Act in respect ofgranting of loans making investments providing guarantees and securities as applicable.
(v) The Company has not accepted any deposits within the meaning of Section 73 to 76 ofthe Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended). Accordinglythe provisions of clause 3 (v) of the Order are not applicable.
(vi) The maintenance of cost records has not been specified by the Central Governmentunder Section 148 (1) of the Act for the business activities carried out by the Company.Thus reporting under clause 3 (vi) of the Order is not applicable to the Company.
(vii) According to information and explanation given to us In respect to statutorydues
(a) The Company has generally been regular in depositing undisputed statutory duesunder Income tax Goods & Service Tax and other Statutory Dues as applicable to itwith the appropriate authorities. According to the information and explanations given tous no undisputed amounts payable in respect of the above were outstanding as at 31stMarch 2019 for a period of more than six months from the date on when they becamepayable.
(b) According to the information and explanations given to us there are no dues inrespect of Income Tax Goods & Service Tax and other Statutory Dues as applicable toit outstanding on account of any dispute.
(viii) The Company has not defaulted in repayment of dues to any bank or financialinstitution during the year under review.
(ix) The Company has not raised any moneys by way of Initial Public Offer or furtherpublic offer or obtained term loans during the year. Hence reporting under clause 3 (ix)of the Order is not applicable to the Company.
(x) To the best of our knowledge and according to the information and explanation givento us no fraud by the Company or no material fraud on the Company by its officers oremployees has been noticed or reported during this year.
(xi) According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has paid/provided for themanagerial remuneration as mandated by the provisions of section 197 read with Schedule Vof the Act.
(xii) The Company is not a Nidhi Company and hence reporting under clause 3 (xii) ofthe Order is not applicable to the Company.
(xiii) In our opinion and according to the information and explanations given to usthe transactions with related parties are in compliance with section 177 and section 188of the Act as applicable and the details have been disclosed in the Financial Statementsas required by the applicable accounting standard.
(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingunder clause 3 (xiv) of the Order is not applicable to the Company.
(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected with them and hence reporting under clause 3 (xv) of theOrder is not applicable to the Company.
(xvi) The Company is registered under section 45-IA of the Reserve Bank of India Act1934.
Annexure B to the Auditors' Report
Independent Auditors Report on Internal Financial Control over Financial Reporting
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 SHALIBHADRAFINANCE LIMITED ("the Company") as of March 31 2019 in conjunction with ouraudit of the financial statements of the Company for the 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. 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 accordancewiththe Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the Guidance Note) and the Standards on Auditing issued by ICAI and deemed to beprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. 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 was established and maintained and if suchcontrols 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 Ind AS 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 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 March 31 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 VORA & ASSOCIATES |
| ||CHARTERED ACCOUNTANTS |
| ||(ICAI Firm Reg. No.: 111612W) |
| ||BHAKTI M. VORA |
| ||PARTNER |
| ||(Membership No.: 148837) |
|PLACE: MUMBAI || |
|DATED: 30th May 2019 || |