| 1. We have audited the accompanying standalone financial statements of
CFL Capital Financial Services Limited ('the Company'), (CIN:
L67120WB1983PLC036805) which comprise the Balance Sheet as at March 31,
2015, the Statement of Profit and Loss and Cash Flow Statement for the
year then ended and a summary of significant accounting policies and
other explanatory information.
Management's Responsibility for the Financial Statements
2. Management is responsible for the matters stated in Section 134(5)
of the Companies Act, 2013 ('the Act') with respect to the preparation
of these financial statements to give a true and fair view of the
financial position, financial performance and cash flows of the Company
in accordance with the accounting principles generally accepted in
India, including the accounting standards specified under section 133
of the Act read with Rule 7 of the Companies (Accounts) Rules, 2014.
This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding
of the assets of the Company and for preventing and detecting frauds
and other irregularities; selection and application of appropriate
accounting policies; making judgments and estimates that are reasonable
and prudent; and design, implementation and maintenance of internal
financial controls, that are operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the financial statements that give a
true and fair view and are free from material misstatement, whether due
to fraud or error.
Auditors' Responsibility
3. Our responsibility is to express an opinion on these financial
statements based on our audit.
4. We have taken into account the provisions of the Act and the Rules
made there under including the accounting standards and matters which
are required to be included in the Audit Report,
5. We conducted our audit in accordance with the Standards on Auditing
specified under section 143(10) of the Act and other applicable
authoritative pronouncements issued by the Institute of Chartered
Accountants of India. Those Standards and pronouncements require that
we comply with ethical requirements and plan and perform the audit to
obtain reasonable assurance about whether the financial statements are
free from material misstatement.
6. An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The
procedures selected depend on the auditor's judgment, including the
assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk
assessments, the auditor considers internal control relevant to the
Company's preparation of the financial statements that give a true and
fair view, in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on
whether the Company has in place an adequate internal financial
controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's Directors as well as
evaluating the overall presentation of the Financial statements.
7. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion on the
financial statements..
Basis for Qualified Opinion
8. Attention is drawn to :-
a. Non-compliance of the provisions of the Non- Banking Financial
(Deposit Accepting or Holding) Companies (Reserve Bank) Directions,
2007. (Refer Note 16(11))
b. The company has not been able to maintain minimum Capital Risk
Asset Ratio (CRAR) as prescribed by Non- Banking Financial (Deposit
Accepting or Holding) Companies (Reserve Bank) Directions, 2007.
(Refer Note 16(11))
The Company is not in a position to carry on business of Non Banking
Financial ervices
Qualified Opinion
9. In our opinion and to the best of our information and according to
the explanations given to us, except to the possible effects of the
matter described in the Basis for qualified Opinion paragraph the
financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India.
(a) In the case of the Balance Sheet of the state of affairs of the
Company as at March 31, 2015.
(b) In the case of the Statement of Profit and Loss, of the loss for
the year ended on that date; and
(c) In the case of the Cash Flow Statement, of the cash flows for the
year ended on that date.
Emphasis of matter
10 i) Note 1.A, 1.B and 1.C in the Financial statements indicate that
the Company has accumulated losses and its net worth has been fully
eroded, the Company has incurred a net cash loss during the current and
previous years and, the Company's current liabilities exceeded the
current assets as at the Balance sheet date. These conditions, along
with the other matters set forth in the above note, indicate the
existence of a material uncertainty that may cast significant doubt
about the Company's ability to continue as going concern. However
financial statements of the Company have been prepared on a going
concern basis for the reasons stated in the said note, ii) Loans from
Banks and UTI and interest charged thereon have been provided as per
the claims before / orders passed by the Debt Recovery Tribunals (see
notes 6.4, 6.5 6.6 and 6.8)
Our opinion is not qualified in respect of these matters.
Report on Other Legal and Regulatory Requirements
11. As required by The Companies (Auditor's Report) Order, 2015,
issued by the Central Government of India in terms of sub-section (11)
of Section 143 of the Act (hereinafter referred to as 'Order'), and on
the basis of such checks of the books and records of the Company as we
consider appropriate and according to the information and explanations
given to us, we give in the Annexure a statement in the matters
specified in paragraphs 3 and 4 of the Order
12. As required by Section 143(3) of the Act, we report that;:
a. We have obtained all the information and explanations which to the
best of our knowledge and belief were necessary for the purpose of our
audit;
b. In our opinion, proper books of account as required by law have
been kept by the Company so far as appears from our examination of
those books.
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
books of account.
d. In our opinion, the aforesaid standalone financial statements
comply with the Accounting Standards 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 31st March, 2015 taken on record by the Board of Directors, none
of the Directors is disqualified from being appointed as director (in
terms of Section 164(2) of the Act,
f. With respect to the matters to be included in the Auditor's report
in accordance with Rule 11 of the Companies (Audit and Auditors) Rules
2014, in our opinion and to the best of our knowledge and belief and
according to the information and explanations given to us :
1. The Company has disclosed the impact of pending litigations as on
31st March, 2015 on its financial position in the financial statements
2. The Company has made provision as at 31st March 2015 as required
under the applicable law or accounting standards for material
foreseeable losses, if any, on long term contracts including derivative
contracts,
3. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company during the year ended 31st March, 2015.
Annexure to the Independent Auditors' Report
(referred to in Paragraph 1 under the heading of "Report on Other Legal
and Regulatory Requirements" of our report of even date)
The annexure referred to in the Independent Auditors' Report to the
members of CFL Capital Financial Services Limited (the Company) for the
year ended March 31,2015. We report that:
1. The Company has maintained proper records showing full particulars,
including quantitative details and situation of fixed assets
The Company has a phased programme of physical verification of its
fixed assets which, in our opinion, is reasonable having regard to the
size of the Company and the nature of its assets. In accordance with
such programme, the management has physically verified fixed assets
during the year and no material discrepancies were noticed on such
verification..
2. The Stock of Shares and Securities of the Company has been
physically verified by the Management during the year and no
discrepancies were noticed between physical and book stock
3. The Company has neither granted nor taken any loans, secured or
unsecured to or from companies, firms or other parties covered in the
register maintained under section 189 of the Act.
4. In our opinion, and according to the information and explanations
given to us, there are adequate internal control system commensurate
with the size of the Company and the nature of its business for the
purchase of securities, fixed assets and for sale of securities and
services. Further, on the basis of our examination of the books and
records of the Company, and according to the information and
explanations given to us, we have not come across any major weakness in
the Internal Control system.
5. In our opinion, and according to the information and explanations
given to us the Company has neither accepted or renewed any deposits
from the public within the meaning of Section 73 and 74 of the Act and
Rules framed there under to the extent notified during the year.
However, in our opinion and according to the information and
explanations given to us, the Company had accepted deposits in earlier
years by complying the provisions of Section 58A, 58AA or any other
relevant provisions of the Companies Act, 1956 and the rules there
under and also the directives of the Reserve Bank of India with regard
to acceptance of deposits from the public. The Company had defaulted in
repayment of deposits and has got an order from the Company Law Board
as per the provisions of Section 58AA of the Companies Act 1956. The
Company Law Board had permitted the Company to repay the depositors in
installments by 31ot December, 2012.The Company has repaid in full to
depositors who had claimed the same. (Refer note 6.7)
6. According to the information and explanations given to us, the
Companies (Cost Accounting Records) Rules 2011 prescribed by the
Central Government are not applicable in respect of services carried
out by the Company.
7. a. According to the information and the explanations given to us,
and on the basis of our examination of the account, the Company has
been regular in depositing with the appropriate authorities undisputed
statutory dues including provident fund, employees state insurance,
income- tax, sales tax, wealth tax, service tax value added tax, duty
of customs, duty of excise and any other material statutory dues, as
applicable, with the appropriate authorities .
b. According to the information and explanations given to us and on
the basis of the documents and records, the following disputed
statutory dues on account of Income Tax and Sales tax have not been
deposited with the appropriate authorities Annexure 1.
c. The amount required to be transferred to the Investor Education and
Protection Fund has been transferred within the stipulated time in
accordance with the provisions of the Companies Act 1956 and the rules
made there under
8. The Company has accumulated losses of Rs. 85,183.83 lakhs at the
end of the financial year and has incurred cash losses in the financial
year and in the immediately preceding financial year.
9. On the basis of the books and records examined by us and the
information and explanations given to us, the company has defaulted in
repayment of dues to financial institutions and banks as per details
given below - Annexure II.
10. According to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from
banks or financial institutions.
11. The Company was registered as Non Banking Finance Company with the
Reserve bank of India but the same stands cancelled with effect from
May 18,2004. (Refer Note 1-C)
12. In respect of shares, shares securities debentures and other
investments dealt or traded by the Company, proper records are
maintained in respect of transactions and contracts and timely entries
have been made therein. All the investments are in the Company's
present or former name.
13. According to the information and explanations given to us, on an
overall basis, the term loans taken in previous years have been applied
for the purpose they were obtained
14. During the course of our examination of the books and records of
the Company, carried out in accordance with the generally accepted
auditing practices in India, and according to the information and
explanations given to us, we have neither across any instance of
material fraud on or by the Company, noticed or reported during the
year, not have been informed of any such case by the Management.
Annexure to Auditors' Report for year ended 31st March 2015
Particulars of disputed statutory liability not paid to the authorities
Annex -1
Name of Nature of dues Amount in Period Forum where the
the Statute lakhs to which dispute is pending
Amount
relates
Sales Tax Jurisdiction of 121.14 1996-97 to Orissa Sales Tax
Assessing
office 1998-99 Tribunal
and Lease
Tax
Lease Tax 0.15 1999-2000 Commissioner
of Sales Tax,
Bhubhaneshwar
Sales Tax 1.31 1996-97 Commercial Tax
Dept. Lucknow
Bombay Stamp Duty 43.80 Superintendent
of
Stamp Act, Stamps
1959
Annex- II Annexure to Auditors' Report for year ended 31 -Mar-2015
(Rs. in Lakhs)
Name of Bank /
Financial Institution/ Default Interest as Total
Mutual Fund Principal as per appeal /
per Lender Order
ICICI Bank Ltd.
(formerly Bank of 852.06 4,235.15 5,087.22
Rajasthan Ltd.)
Catholic Syrian
Bank Ltd. 646.23 650.87 1,297.10
Dena Bank 1,926.38 6,123.36 8,049.74
Federal Bank Ltd. 780.64 2,766.61 3,547.26
Indusind Bank Ltd. 1,349.75 3,722.18 5,071.93
Oriental Bank of Commerce 447.18 2,598.00 3,045.19
Kotak Bank Ltd.
(formerly State 793.85 1,479.43 2,273.28
Bank of Travancore)
Asset Reconstruction Co.
(I) Ltd. 840.21 2,853.27 3,693.48
(formerlySouth Indian
Bank Ltd.)
Vijaya Bank 1,215.26 1,997.93 3,213.19
Axis Bank Ltd. 700.72 659.66 1,360.38
9,552.30 27,086.47 36,638.77
UTI Asset Management
Co Ltd. 248.62 2,151.55 2,400.18
Administrator of the
Specified 432.60 3,743.05 4,175.65
Undertaking of UTI
681.23 5,894.60 6,575.83
The principal amount Is as claimed by the lenders in their applications
before the appellate authorities. Interest is calculated at the rates
demanded by them or as per the orders passed by the Appellate
Authorities.
For Tarmaster & Co.,
Chartered Accountants
(Firm Registration No 302016E)
A K Chakrabarti
Partner
Membership No. 015374
Kolkata
Date :27th May, 2015
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