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Banas Finance Ltd.

BSE: 509053 Sector: Financials
NSE: N.A. ISIN Code: INE521L01030
BSE 00:00 | 03 Dec 39.90 1.90
(5.00%)
OPEN

39.90

HIGH

39.90

LOW

39.90

NSE 05:30 | 01 Jan Banas Finance Ltd
OPEN 39.90
PREVIOUS CLOSE 38.00
VOLUME 12105
52-Week high 39.90
52-Week low 3.43
P/E 2.07
Mkt Cap.(Rs cr) 102
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 39.90
CLOSE 38.00
VOLUME 12105
52-Week high 39.90
52-Week low 3.43
P/E 2.07
Mkt Cap.(Rs cr) 102
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

M/s Banas Finance Limited

Report on the Financial Statements

We have audited the accompanying Ind AS financial statements of Banas Finance Limited("the Company") which comprise the balance sheet as at 31st March 2020 thestatement of profit and loss statement of changes in equity and the cash flow statementfor the year then ended and a summary of significant accounting policies and otherexplanatory information (hereinafter referred as "Ind AS financial statements").

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 2020 and profit (financialperformance including other comprehensive income) its cash flows and changes in equityfor 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 thoseStandards are further described in the Auditor's Responsibilities for the Audit of the IndAS financial statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of the Ind ASfinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence obtained issufficient and appropriate to provide 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 lockdowns and other restrictions and conditions related tothe 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 2020. These matters were addressed in the context of our audit of the Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. For each matter below our description of how ouraudit 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 2020 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 Indian Accounting Standards' with April 01 2017 as the transition date and IGAAP as the previous GAAP. 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.
Our audit procedures included:
• Evaluating the accounting interpretations for compliance with Ind AS and testing the adjustments and disclosures made on transition.
The transition to Ind AS has resulted in material changes in:
• The accounting policies reflected in the comparative information are consistent with those applied in the current period or if there have been
• Classification and measurement of financial assets and financial liabilities
• Measurement of loan losses (expected credit losses) changes in accounting policies whether those changes have been properly accounted for and adequately presented and disclosed.
• 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.
• We evaluated the reasonableness of the Management estimates by understanding the process of ECL estimation.
• unbiased probability weighted outcome under various scenarios;
• Tested the ECL model including assumptions and underlying computation.
• time value of money;
• Assessed the floor/minimum rates of provisioning applied by the Company for loan products with inadequate historical defaults.
• impact arising from forward looking macroeconomic factors and;
• 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.
(C) Accounting for the effects of the scheme of arrangement in respect of amalgamation
The Company has entered into a scheme of amalgamation ("the scheme") with M/s. Proaim Enterprises Limited and M/s. Axon Ventures Limited and M/s. Rockon Enterprises Limited. The scheme has been approved by the National Company Law Tribunal Special Bench Mumbai ('NCLT) with appointed date of the scheme i.e.01st April 2018. Our audit procedures in this area included the following:
• Inspected agreements related to the amalgamation in accordance with the scheme.
• Agreed the balances acquired on amalgamation to the audited Ind AS financial statements of M/s. Proaim Enterprises Limited and M/s. Axon Ventures Limited and Rockon Enterprises Limited as on 01st April 2018.
This is a key audit matter as the scheme has a pervasive impact on the financial statements of the Company.
• Tested the accounting entries for the amalgamation are in accordance with the scheme approved by NCLT.

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 audit of the Ind AS financial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the Ind AS financial statements or our knowledge obtained inthe audit or otherwise appears to be materially misstated. If based on the work we haveperformed and based on the work done/ audit report of other auditors 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 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

We draw an attention to the financial information of two amalgamating companies i.e. M/s. Rockon Enterprises Limited and M/s. Proaim Enterprises Limited whose financialinformation reflect total assets of Rs. 430076938/- total liabilities of Rs.49937695/- and total other equity of Rs.88525737/ - as at 31st March 2020 havebeen audited by other auditors whose reports have been furnished to us and our opinion onthe Ind AS financial statements to the extent they have been derived from such financialstatements is based solely on the report of such other auditors.

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

Securities held for trading of Rs. 32711527/- (Previous Year Rs. 29874806/-) isdisclosed as other financial assets. Revenue from operation includes Rs. 5233140/-(Previous year Rs. 34149004/-) from sale of securities. Purchase of Rs. 6968060/-(Previous year 28526657/-) 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 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 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

Place: Mumbai Date: 26/08/2020

UDIN: 201344010AAAAAX3421

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