classic leasing finance ltd share price Auditors report

whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company s ability to continue as a going concern. If we conclude that a material unccertainty exists, we are required to draw attention in our auditors report to the related disclosures in the financial statements or, if such disclosures a.e inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may ca lse me company to cease to continue as a ?oing concern.

• Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and

whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

\\e communicate with those charged with goverrance regarding, among other matters, the planned scope and timing

of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. "

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters We ? describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reas inably be expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

* 1. As required by the Companies (Auditors Repart) Order, 2020 (the Order), issued by the Central Government of

India in terms of sub-section (11) of section 143of the Act, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give, in the Annexure A, a statement on the makers specified in paragraph 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 best of our knowledge and belief were necessary for the purposes of car audit;

b. In our opinion, proper books of account as required by law have been kept by the Company so far as it

appears from our examination of those bocks; Vm

c. The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this Report are in agreement with the bocks of accounts;

d. In our opinion, the Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement c xuply with the Ind AS specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rues2014;

e. ->n the basis of the written representations received from the directors as on 31" March, 2023, ard taken on ecord by the Board of Directors, none of the directors are disqualified as on 31" March, 2023, from beinp ippointed as a director in -erms of section 164(2) of the Act;

. f. With respect to the adequacy of the internal financial controls over financial reporting of the Company and

he operating effectiveness of such controls, we attach herewith a report on the same in Annexure E.

(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company has not revalued its Property, plant and equipment (including Right-of-use asses) or Intangible assets or both during the year.

(e) According to the information and explanations given to us and on the basis of oar examination

of the records of the Company, there are no proceedings initiated or pending against the Company for holing an benami property under the Prohibition of Benami Property Transactions Act, 1988 and rules made thereunder.

(ii) (a) The inventory has been physically verified by the management during the year. In our opinion, the frequency of such verification is reasonable and procedures and coverage as followed by management were appropriate. No discrepancies were noticed on verification between the physical stocks and the book records that were 10% or more in the aggregate for each class of inventory.

(b) According to the information and explanations given to us and on the basis of our examination of the records of the Company, the Company does not have working capital limits, in aggregate, from banks on the basis of security of current assets. Hence, the requirements under paragraph 3(ii) (b) of the Order are not applicable to the Company.

(iii) According to the information explanation provided to us, the company has not made any investments in, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties. Hence, the requirements under paragraph 33(iii)(a) and (e) of the Order are not applicable to the Company, as it is a NBFC company.

(b) According to the information and explanations given to us and based on the audit proceduresconducted by us, we are of the opinion that the terms and conditions of the loans given law..

prima facie, not prejudicial to the interest of the Company.

(c) According to the information and explanations given to us and on the basis of our examination of the records of the Company, in the case of loans given, the repayment of principal and payment of interest has been stipulated and the repayments or receipts have been regular.

(d) According to the information and explanations given to us and on the basis of our examination of the records of the Company, there is no overdue amount for more than ninety days in respect of loans given.

(f) According to the information and explanations given to us and on the basis of our examination

- of the records of the Company, the Company has not given any loans either repayable on demand or without specifying any terms or period of repayment.

- (iv) According to the information and explanations given to us and on the basis of our examination of the

records, as specified under Section 185 & 186 of the Companies Act 2013 the Company has not given any loans, but has given corporate guarantee amounting of Rs.245.32 cr for Kohinoor Steel private Limited to consortium of banks led by RARE Assets Reconstruction Ltd and other members being Union Bank of India, Punjab National Bank and Indian Bank .The loan was originally sanctioned and disbursed by State bank of India, Oriental Bank of Commerce, Indian Overseas Bank, Indian Bank, Corporation Bank, Punjab National Bank & State Bank of Travancore. The same has not beer provided in the books of accounts.

(v) The Company has not accepted any deposits or amounts which are deemed to be deposits from the public. Accordingly, clause 3(v) of the Order is not applicable.

(vi) According to the information and explanations given to us, the Central Government has not prescribed the maintenance of cost records under Section 148(1) of the Companies Act, 2013 for the products manufactured by it (and/or services provided by it). Accordingly, clause 3(vi) of the Order is not applicable.

*

(vii) (a) According to the information and explanation given to us and on the basis of our examination of

the records of the Company, amounts dcducted/accrued in the books of account in respect of undisputed statutory dues including provident fund, employees state insurance, income-tax, sales tax, service tax, duty of customs, duty of excise, value added tax, goods and service tax (GST)/^{cess an}d other material statutory dues have been generally regularly deposited curing the year by the Company with the appropriate authorities;

According to the information and explanations given to us, no undisputed amounts payable in respect of employees state insurance, income-tax, sales tax, wealth tax, service tax. duty of customs, duty of excise, value added tax, goods and service tax (GST), cess and other material statutory dues were in arrears as at March 31,2023 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us, the following dues of in :ome tax, sales tax, service tax, duty of customs, duty of excise and value added tax have not been deposited by the Company on account of disputes;

(viii) According to the information and emanations given to us, there are no transactions which are not accounted in the books of account which have been surrendered or disclosed as income during the year in Tax Assessment of the Company. Also, there are no previously unrecorded income which has •been now recorded in the books of recount. Hence, the provision stated in paragraph 3(viii) of the Order is not applicable to the Company.

(a) According to the information and explanations given to us, the company has not defaulted in repayment of -Cans or other borrowings or in the payment of interest thereon to any lender. Accordingly, clause 3(ix)(a) of the Order is not applicable.

(b) According to the nformation and explanations given to us and on the basis of our examination of tlie records 3: die Company the Company has not been declared a wilful defaulter by any bank or financial institution or government or government authority.

(c) According to the nformation and explanations given to us by the management, the Company has not obtained any term loans Accordingly, clause 3(ix)(c) of the Order is not applicable.

(d) According to the Information ard explanations given to us and on an overall examination of the balance sheet or tie Company, we report that no funds have been raised on short term basis by the Company. Accordingly, clause 3(ix)(d) of the Order is not applicable.

(e) According to th? information and explanations given to us and on an overall examination of the financial sta tern ants of the Company, we report that the Company has not taken any funds from any enht> or person on account nf or to meet the obligations of its subsidiaries as defined under the Companies Act 2013. Accorc ingly, clause 3(ix)(e) of the Order is not applicable.

(0 According to the ir formation and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries as defined under the Companies Act, 2013. Accordingly, clause 3(ix%(f) of the Order is not applicable.

(x) (a) The Company has not raised any moneys by way of initial public offer or further public offer

(including debt instruments). Accordingly, clause 3(x)(a) of the Order is not applicable.

(b) According to the ir formation and explanations given to us and on the basis of our examination of the records of the Company, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year. Accordingly clause 3(x)(b) of -he Order is rot i pplicable.

(xi) (a) Based on exam nation of the books and records of the Company and according tc the

information and explanations given to us, considering the principles of materiality outlined in Standards on Auciting, we report that no fraud by the Company or on the Company has been noticed or report*! during the coirse of the audit.

(b) According to the information anc explanations given to us, no report under sub-secticn (12)/of? Section 143 of the Companies Act 2013 has been filed by the auditors in Form ADT-4 as

prescribed under Rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Coib Government.

(c) We have taken into consideration the whistle blower complaints received by the Conoar during the year while determining the nature, timing and extent of our audit procedures.

(xii) According to the information and explanations given to us, the Company is not a Nidhi Com can Accordingly, clause 3(xii) of the Order is not applicable.

(xm) In our opinion and according to the information and explanations given to us, the transactions wil rented parties are in compliance with Sections 177 and 188 of the Companies Act, 2013, K-hei applicable, and the details of the related party transactions have been disclosed in the standcJor financial statements as required by the applicable Indian Accounting Standards.

(vtv) In our opinion and according to the information and explanations given to us, the Company is not required to have an internal audit system as per provisions of the Companies Act 2013 Accordingly, clause 3(xiv) of the Order is not applicable.

(xv) In our opinion and according to the information and explanations given to us, the Company has nc entered into any non-cash transactions with its directors or persons connected to its directors am hence, provisions of Section 192 of the Companies Act, 2013 are not applicable to the Company.

. ^(xvi) (a) T^he Company is required to be registered under Section 45-IA of the Reserve Bank of India Ad

1934 and accordingly it is registered with the Reserve Bank of India.

(b) In our opinion, the Company has conducted Non-Banking Financial activities with valit Certificate of Registration (COR) from Reserve Bank of India Act, 1934.

(c) The Company is not a Core Investment Company (CIQ as defined in the regulations mace b\ the Reserve Bank of India. Accordingly, clause 3(xvi)(c) of the Order is not applicable.

(d) According to the information and explanations provided to us during the course of audit tht Company is not a CIC. Accordingly, the requirements of clause 3(xvi)(d) are not applicable.

(xvii) The Company has not incurred cash losses in the current but the company has incurred cash lose* including investment losses in the immediately preceding financial year due to provision ol Investment in equity share in M/s Kohinoor Paper & News Print Private Limited and M/s Kohirnoi Pulp and Paper private Limited as the companies are under liquidation.

(xviii) There has been resignation of the statutory auditors M/s R.DUGAR & ASSOCAITES (FRN: 324912E) Chartered Accountants Firm during the year due to preoccupancy of the firm on da-ed 14/11/2022.M/s Agarwal Khetan & Co.(FRN:330054E) has been appointed at an EGM on dated:31 / 01 / 2023.

(xix) According to the information and explanations given to us and on the basis of the financial ratos, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing. has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that the Company is not capable of meeting its liabilities existing at the date of

balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state Oiat this :s not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

(xx) In our opinion and according to the information and explanations given to us, there is no unspent amount under sub-secton (5) of Section 135 of the Companies Act, 2013 pursuant to any project. Accordingly, clauses 3(xx)(a) and 3(xx)(b) of the Order are not applicable.

CLASSIC LEASING & FINANCE LIMITED ANNEXURE B TO THE INDEPENDENT AUDITORS REPORT

(Referred to in Paragraph 2(f) under Report on Other Legal and Regulatory Requirements section of c*ur report of

even date)

We have audited the internal financial controls over financial reporting of Classic Leasing & Finance Limited ("the Company") as of 31" March, 2023 in conjuncticn with our audit of the financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of , internal control stated in the Guidance Note on Audit of Internal Financial Controls over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to companys policies, the safeguarding rf its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial informatior. as required under the Companies Act, 2013.

Auditors Responsibility

Our responsibility is to express an opinion on the Companys internal financial controls over financial reoorting based on our audit. We have conducted our audit in accordance with the Guidance Note on Audit of Lnte-nal Financial Controls over Financial Reporting (the "Guidance Note") and the Standards on Auditing, issued by ICA and deemed to be prescribed under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit ol internal Financial Controls and, both issued b\ the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy of the mte*nal financial controls system over financial reporting and their c derating effectiveness.

Our audit of internal financial controls over financial reporting included obtaining an understardirg of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and • evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis :or our audit opinion on the Companys internal financial controls system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company s internal financial control over financial reporting is a process designed to provide reasona )le assurance \ regarding the reliability of financial reporting and the preparation of financial statements for external pprppsegun accordance with generally accepted accounting principles. A companys internal financial control cv^jfbuiCntl_r... \ reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of die company are being made only in accordance with authorizations of management and directors of the company, and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys 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 financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at 31** March, 2023, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India.