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Banas Finance Ltd.

BSE: 509053 Sector: Financials
NSE: N.A. ISIN Code: INE521L01030
BSE 00:00 | 01 Jul 28.30 -0.60
(-2.08%)
OPEN

29.40

HIGH

29.90

LOW

27.50

NSE 05:30 | 01 Jan Banas Finance Ltd
OPEN 29.40
PREVIOUS CLOSE 28.90
VOLUME 74159
52-Week high 124.84
52-Week low 5.22
P/E 2.05
Mkt Cap.(Rs cr) 142
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 29.40
CLOSE 28.90
VOLUME 74159
52-Week high 124.84
52-Week low 5.22
P/E 2.05
Mkt Cap.(Rs cr) 142
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Banas Finance Ltd. (BANASFINANCE) - Auditors Report

Company auditors report

To the Members of Banas Finance Limited

Report on the Financial Statements

We have audited the accompanying Ind AS financial statements of Banas FinanceLimited ("the Company") which comprise the balance sheet as at 31stMarch 2021 the statement of profit and loss statement of changes in equity and the cashflow statement for the year then ended and a summary of significant accounting policiesand other explanatory information (hereinafter referred as "Ind AS financialstatements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs(financial position) of the Company as at 31st March 2021 and profit(financial performance including other comprehensive income) its cash flows and changesin equity 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

Companies Act 2013. Our responsibilities under those Standards are further describedin the Auditor's Responsibilities for the Audit of the Ind AS financial statements sectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the Ind AS financial statements under theprovisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence obtained is sufficient and appropriate toprovide a basis for our opinion.

Emphasis of Matter

We further draw an attention to the uncertainties and the management's assessment ofthe financial impact due to the lock-downs and other restrictions and conditions relatedto the Covid-19 pandemic situation for which a definitive assessment of the impact in thesubsequent period is highly dependent upon circumstances as they evolve.

Our opinion is not modified in respect of these matters.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements for the financial year ended31st March 2021. These matters were addressed in the context of our audit ofthe Ind AS financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. For each matter below our description ofhow our audit addressed the matter is provided in that context.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the Ind AS financial statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the Ind AS financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying Ind AS financial statements.

Key audit matters How our audit addressed the key audit matter
(A) Transition to Ind AS from Indian GAAP
The financial statements of the Company for the year ended March 31 2021 have been prepared in accordance with Ind AS. For the purposes of transition to Ind AS the Company has followed the guidance prescribed in Ind AS 101 ‘First-Time Adoption of The transition to Ind AS has resulted in changes in the presentation of the financial statements disclosures in the notes thereto and accounting policies and principles.
Indian Accounting Standards' with April 01 2017 as the transition date and IGAAP as the previous GAAP. Our audit procedures included:
The transition to Ind AS has resulted in material changes in: • Evaluating the accounting interpretations for compliance with Ind AS and testing the adjustments and disclosures made on transition.
• Classification and measurement of financial assets and financial liabilities • The accounting policies reflected in the comparative information are consistent with those applied in the current period or if there have been changes in accounting policies whether those changes have been properly accounted for and adequately presented and disclosed.
• Measurement of loan losses (expected credit losses) • Assessed that the areas of significant estimates and management judgment are in line with principles under Ind AS.

(B) Impairment of financial assets (expected credit losses)

Ind AS 109 requires the Company to recognize impairment loss allowance towards its financial assets (designated at amortized cost and fair value through other comprehensive income) using the expected credit loss (ECL) approach. Such ECL allowance is required to be measured considering the guiding principles of Ind AS 109 including: • We read and assessed the Company's Accounting policies for impairment of financial assets and their compliance with Ind AS 109.
• unbiased probability weighted outcome under various scenarios; • We evaluated the reasonableness of the Management estimates by understanding the process of ECL estimation.
• time value of money; • Tested the ECL model including assumptions and underlying computation.
• impact arising from forward looking macro- economic factors and; • Assessed the floor/minimum rates of provisioning applied by the Company for loan products with inadequate historical defaults.
• availability of reasonable and supportable information without undue costs. • Audited disclosures included in the Ind AS financial statements in respect of expected credit losses.
Applying these principles involves significant estimation in various aspects such as:
• grouping of borrowers based on homogeneity by using appropriate statistical techniques;
• staging of loans and estimation of behavioral life;
• determining macro-economic factors impacting credit quality of receivables;
• estimation of losses for loan products with no/minimal historical defaults.
Considering the significance of such allowance to the overall financial statements and the degree of estimation involved in computation of expected credit losses this area is considered as a key audit matter.

Information Other than the Financial Statements and Auditors' Report Thereon

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the Ind AS financial statements and our auditors'report thereon.

Our opinion on the Ind AS financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon. In connection with our auditof the Ind AS financial statements our responsibility is to read the other informationand in doing so consider whether the other information is materially inconsistent withthe Ind AS financial statements or our knowledge obtained in the audit or otherwiseappears to be materially misstated. If based on the work we have performed and based onthe work done/ audit report of other auditors there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthe Ind AS financial statements that give a true and fair view of the financial positionfinancial performance (including other comprehensive income) cash flows and changes inequity of the Company in accordance with the accounting principles generally accepted inIndia including the accounting Standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of 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 Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error. In preparing the Ind AS financial statements management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibility

Auditor's Responsibilities is for the Audit of the Ind AS Financial Statements. Ourobjectives are to obtain reasonable assurance about whether the Ind AS 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 the Ind AS Financial Statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Ind AS 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 Ind AS financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the Ind AS FinancialStatements including the disclosures and whether the Ind AS Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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 are required todetermine those matters that were of most significance in the audit of the Ind ASFinancial Statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matter

The Company is engaged in the business of financial services i.e. lending and tradingin securities. Inventories disclosed under the head "Other Financial Assets" andits related details are as follows:

Securities held for trading of Rs.37780950/- (Previous Year Rs.32711527/-) isdisclosed as other financial assets. Revenue from operation includes Rs.9124047/-/-(Previous year Rs.5233140/-) from sale of securities. Purchase of Rs.12547627/-(Previous year Rs. 6968060/-) in statement of profit and loss account is of securitiesheld for trading. Change in securities held for trading is disclosed in statement ofprofit and loss.

Our opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

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 the paragraph3 and 4 of the Order to the extent applicable.

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 it appears from our examination of those books.

(c) the balance sheet the statement of profit and loss cash flow statement andstatement of change in equity dealt with by this Report are in agreement with the books ofaccount.

(d) in our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with relevant ruleissued thereunder;

(e) on the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164 (2) of the Act.

(f) with respect to adequacy of internal financial control over financial reporting ofthe company and the operating effectiveness of such controls refer to our separate reportin "Annexure B" and

(g) with respect to other matters to be included in the Auditor's Report in accordancewith Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us:

i. The Company does not have any pending litigations which would impact its financialposition in the aforesaid Ind AS financial statements.

ii. the Company did not have any long term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. The company is not liable to transfer any amounts to the Investor Education andProtection Fund. Therefore there has been no delay in transferring amounts required tobe transferred to the Investor Education and Protection Fund by the Company.

For Pravin Chandak & Associates
Chartered Accountants
Firm's registration number: 116627W
Sd/-
Nishant Sampat
Partner
Membership number: 134410
Mumbai
Date: 30th June 2021
UDIN: 21134410AAAAAN9329

ANNEXURE- A TO THE INDEPENDENT AUDITORS REPORT

Annexure A to the Independent Auditors' Report- 31st March 2021

The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the financial statements for the year ended 31 March 2021 we report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

The company has a regular programme of physical verification of fixed assets. Nomaterial discrepancy was noticed during physical verification.

The company does not have any immovable property hence the clause is not applicable.

(ii) In our opinion the management has conducted physical verification of inventory atreasonable intervals during the year. No material discrepancies were noticed on suchverification.

(iii) (a) The Company has granted loans to one party covered in the register maintainedunder section 189 of the Companies Act 2013 (‘the Act') amount in involved is Rs.46653833 and year-end balance is Rs. 250000/-.

(b) In the case of the loans granted to any parties in the register maintained undersection 189 of the Act the borrowers have been regular in the payment of the interest asstipulated. The terms of arrangements do not stipulate any repayment schedule and theloans are repayable on demand. Accordingly paragraph 3(ii) (b) of the order is notapplicable to the Company in respect of repayment of the principal amount.

(c) There are no overdue amounts for period of more than ninety days in respect of theloans granted to the bodies corporate listed in the register maintained under section 189of the Act.

(iv) The company has complied with the provisions of section 185 & 186 of the Actexcept company has granted loans to 13 parties wherein interest charged is less thanprevailing yield government security for relevant tenure. Amount of such loans as on 31stMarch 2021 is Rs 12383415/- and company has granted loan to 35 party wherein nointerest has been charged. Amount of such loans as on 31st March 2021 is Rs.194103764/-.

(v) During the year Company has not accepted any deposits from the public hence theclause is not applicable.

(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income taxsales tax wealth tax service tax duty of customs value added tax cess and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income tax sales tax service tax duty of customsvalue added tax were in arrears as at 31 March 2021 for a period of more than six monthsfrom the date they became payable.

(c) According to the records of the company the dues of income tax sales tax service tax duty of custom duty of excise value added tax goods and services taxand cess which have not been deposited on account of any dispute are as follows:

Assessment Year Amount Remarks
AY : 2013-14 100000 Listing Fees were disallowed
199920000 Cash Credit has been disallowed
140000 Income has been voluntarily added by the assesse
AY: 2015-16 1471376 Disallowance u/s 14A
68127 Addition u/s 68 of the Income Tax Act.
AY 2014-15 730788 Disallowance u/s 14A
AY 2017-18 246625 Disallowance u/s 14A
AY : 2016-17 1747341 Disallowance u/s 14A
2632164 Disallowance on Sale of Shares
52643 Unexplained Expenses has been added

(viii) The Company did not have any outstanding dues to financial institutions banksor debenture holders during the year.

(ix) The Company has not raised any money by way of initial public offer or furtherpublic offer during the year. The company has not taken any term loans during the year.

(x) According to the information and explanations given to us no material fraud on orby the Company has been noticed or reported during the course of our audit.

(xi) The company has paid managerial remuneration in accordance with provisions of thesection 197 read with Schedule V of the Companies Act.

(xii) The company is not a Nidhi Company hence the clause is not applicable.

(xiii) All the transactions with the related parties are in compliance with sections177 and 188 of Companies Act 2013 and the necessary details have been disclosed in theFinancial Statements etc as required by the applicable accounting standards.

(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year

(xv) The company has not entered into any non-cash transactions with directors orpersons connected with him.

(xvi) The company is required to be registered under section 45-IA of Reserve Bank ofIndia Act 1934 and it has obtained registration.

For Pravin Chandak & Associates
Chartered Accountants
Firm's registration number: 116627W
Sd/-
Nishant Sampat
Partner
Membership number: 134410
Mumbai
Date: 30th June 2021
UDIN: 21134410AAAAAN9329

ANNEXURE- B TO THE INDEPENDENT AUDITORS

Report on the Internal Financial Controls under Clause (i) of sub- section 3 of theSection 143 of the Companies Act

2013 (‘the Act)

We have audited the internal financial controls over financial reporting of M/sBanas Finance Limited (the company) as of 31st March 2021 in conjunctionwith our audit 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 Accountant 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 the Company's policies the safeguardingof its 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.

Auditor's Responsibility

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 Not 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 were established and maintained and if suchcontrols operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control-based on the assessed risk. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our audit opinion onthe Company's 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 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 authorization of the 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. QualifiedOpinion

According to the information and explanations given to us and based on our audit thefollowing material weaknesses have been identified as at March 31 2021.

a) The Company did not have an appropriate internal control system for granting Loans.Demand and other loans given are governed by the Board policies. Considering the closemonitoring of Board no appraisal renewal Policies Procedure Committee or documentshave been prescribed and executed.

b) The Company's internal control system is not commensurate to the size and scale ofoperation over purchase and sale of shares and inventory and for expenses incurred.

A ‘material weaknesses' is a deficiency or a combination of deficiencies ininternal financial control over financial reporting such that there is a reasonablepossibility that a material misstatement of the company's annual or interim financialstatements will not be prevented or detected on a timely basis. In our opinion except forthe effects / possible effects of the material weaknesses described above on theachievement of the objectives of the control criteria the Company has maintained in allmaterial respects adequate internal financial controls over financial reporting and suchinternal financial controls over financial reporting were operating effectively as ofMarch 31 2021 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 Chartered Accountants of India. We have considered the material weaknessesidentified and reported above in determining the nature timing and extent of audit testsapplied in our audit of the March 31 2021 financial statements of the Company and thematerial weaknesses does not affect our opinion on the financial statements of theCompany.

FOR PRAVIN CHANDAK & ASSOCIATES
Chartered Accountants
Firm's registration number: 116627W
Sd/-
Nishant Sampat
Partner
Membership number: 134410
Place: Mumbai
Date:30/06/2021
UDIN:211344A0AAAAAN9329

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