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CreditAccess Grameen Ltd.

BSE: 541770 Sector: Financials
NSE: CREDITACC ISIN Code: INE741K01010
BSE 12:43 | 07 Dec 518.95 4.50
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510.25

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529.00

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510.25

NSE 12:39 | 07 Dec 518.60 4.40
(0.86%)
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514.20

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OPEN 510.25
PREVIOUS CLOSE 514.45
VOLUME 2645
52-Week high 822.00
52-Week low 495.30
P/E 79.11
Mkt Cap.(Rs cr) 8,084
Buy Price 517.85
Buy Qty 1.00
Sell Price 518.70
Sell Qty 5.00
OPEN 510.25
CLOSE 514.45
VOLUME 2645
52-Week high 822.00
52-Week low 495.30
P/E 79.11
Mkt Cap.(Rs cr) 8,084
Buy Price 517.85
Buy Qty 1.00
Sell Price 518.70
Sell Qty 5.00

CreditAccess Grameen Ltd. (CREDITACC) - Auditors Report

Company auditors report

To the Members of CreditAccess Grameen Limited Report on the Audit of the StandaloneFinancial Statements

Opinion

We have audited the accompanying standalone financial statements of CreditAccessGrameen Limited (the "Company") which comprise the Balance Sheet as at March31 2021 and the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Cash Flows and the Statement of Changes in Equity for the year then endedand a summary of significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2021 and its profit totalcomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Standalone Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit opinion on the standalone financial statements.

Emphasis of Matter

We draw attention to Note 42 of the standalone financial statements which describesthe continuing uncertainties arising from the COVID 19 pandemic.

Our report is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current year.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Key Audit Matter How the key audit matter was addressed in our Audit
(a) Impairment of Loans (expected credit losses) (as described in note 7 of the standalone Ind AS financial statements)
Management estimates impairment provision using Expected Credit loss (ECL) model for the loan exposure. Recognition and measurement of impairment of loans involve significant management judgement. The Company's impairment allowance Our audit procedures in relation to expected credit losses were focused on obtaining sufficient appropriate audit evidence as to whether the expected credit losses recognised in the financial statements were reasonable and the related disclosures in the financial statements made by the management were adequate.
is derived from estimates including the
historical default and loss ratios. Collective These procedures included but not limited to the following:
impairment allowances are calculated using ECL model which approximate credit conditions on homogenous portfolios of • We examined Board Policy approving the methodology for computation of ECL that address policies procedures
loans. and controls for assessing and measuring credit risk on all lending exposures commensurate with the size
During the year the Company has made additional provisions after evaluating the extent to which COVID-19 pandemic may impact its overall operations and performance. Given the uncertainty over the potential macro-economic condition these additional provisions also involve significant management estimates/ judgements. complexity and risk profile specific to the Company.
Further the disclosures made in the financial statements for ECL especially in relation to judgements and estimates by the Management in determination of the ECL involve increased level of audit focus. • We obtained an understanding of the model adopted by the Company for calculation of expected credit losses including how management calculated the expected credit losses and the appropriateness of the data on which the calculation is based and tested the management controls for it.
• We evaluated the design and operating effectiveness of controls across the processes relevant to ECL. These controls among others included controls over the allocation of assets into stages including management's monitoring of the need for post model adjustments model validation and production of journal entries and disclosures.
The aforesaid involves significant management estimates/ judgements and hence identified as Key Audit Matter (KAM). • We tested on samples basis the input and historical data used for determining the PD and LGD rates and agreed the data with the underlying books of accounts and records.
• We tested the arithmetical calculation of the workings of the expected credit losses.
• We performed an overall assessment of the ECL provision at each stage including management's assessment on Covid-19 impact to determine if they were reasonable considering the Company's portfolio risk profile and the macroeconomic environment.
• We assessed the adequacy and appropriateness of disclosures in compliance with the Ind AS 107 on ECL especially in relation to judgements used in estimation of ECL provision.

Information Other than the Financial Statements and Auditor's Report Thereon

• The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the management report but does notinclude the standalone financial statements and our auditor's report thereon. The Annualreport is expected to be made available to us after the date of this auditor's report.

• Our opinion on the standalone financial statements does not cover the otherinformation and we do not and will not express any form of assurance conclusion thereon.

• In connection with our audit of the standalone financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether the other information is materially inconsistent withthe standalone financial statements or our knowledge obtained during the course of ouraudit or otherwise appears to be materially misstated.

• When we read the management report if we conclude that there is a materialmisstatement therein we are required to communicate the matters to those charged withgovernance as required under SA 720 'The Auditor's responsibilities Relating to OtherInformation.'

Management's Responsibility for the Standalone 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 standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other 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 standalone financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process. Auditor's Responsibility for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany 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 the 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 standalone 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 standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

• Obtain sufficient appropriate audit evidence regarding the financial informationof the Company to express an opinion on the standalone financial statements.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone financial statements.

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 standalone financial statementsof the current year and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when 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.

Other Matters

The audit of the standalone financial statements of the Company for the year endedMarch 31 2020 was carried out by the predecessor auditor. The report of the predecessorauditor on the comparative standalone financial statements dated May 30 2020 expressed anunmodified opinion.

Our opinion on the standalone financial statements and our report on Other Legal andRegulatory Requirements below is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit 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 including Other ComprehensiveIncome the Statement of Cash Flows and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.

d. In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.

e. On the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on March 312021 from being appointed as a director in terms of Section 164(2) of the Act.

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 A". 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 the requirements of section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements.

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

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 008072S)
G. K. Subramaniam
(Partner)
Place: Mumbai (Membership No. 109839)
Date: May 6 2021 (UDIN: 21109839AAAAFJ6787)

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1(f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the "Act")

We have audited the internal financial controls over financial reporting ofCreditAccess Grameen Limited (the "Company") as of March 31 2021 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended on that date which includes internal financial controls over financial reporting.

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.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and 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 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and

directors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorised acquisition use or disposition of the company's assetsthat 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 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.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on the criteria forinternal financial control over financial reporting 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 Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 008072S)
G. K. Subramaniam
(Partner)
Place: Mumbai (Membership No. 109839)
Date: May 6 2021 (UDIN: 21109839AAAAFJ6787)

ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.

(b) The property plant and equipment were physically verified during the year by themanagement in accordance with a regular program of verification which in our opinionprovides for physical verification of all the fixed assets at reasonable intervals.According to the information and explanations given to us no material discrepancies werenoticed on such verification.

(c) The Company does not have any immovable properties of freehold or leasehold landand building and hence reporting under clause (i)(c) of the CARO 2016 is not applicable.

(ii) The Company does not have any inventory and hence reporting under clause 3(ii) ofthe Order is not applicable.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theAct.

(iv) In our opinion and according to the information and explanations given to us theCompany has not granted any loans or provided any guarantee or security to any director ofthe Company and hence the provisions of Section 185 of the Act is not applicable to theCompany. The Company has complied with the provisions of Section 186 as applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year and it did not have any unclaimed deposits at thebeginning of the year. Hence reporting under clause (v) of the Order is not applicable.

(vi) Having regard to the nature of the Company's business / activities reportingunder clause (vi) of the CARO 2016 is not applicable.

(vii) According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Goods and Service TaxCess and other material statutory dues where applicable to it with the appropriateauthorities.

(b) There were no arrears in respect of said statutory dues as at March 31 2021 for aperiod of more than six months from the date they became payable.

(c) There are no dues of Provident Fund Employees' State Insurance Goods and ServiceTax Sales Tax as on March 31 2021 on account of disputes. The details of dues of Incometax which have not been deposited as at March 31 2021 on account of dues are as follows:

Name of Statute Nature of Dues Forum where Dispute is Pending Period to which the Amount Relates Amount Involved Amount Unpaid
Income Tax Act 1961 Income Tax Commissioner of Income Tax (Appeals) FY 2016-17 Rs 1.45 crore Rs 1.16 crore

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks financialinstitutions and dues to debenture holders. The Company does not have loans or borrowingsfrom Government.

(ix) In our opinion and according to the information and explanations given to usmoney raised by way of further public offer of debt instruments and the term loans havebeen applied by the Company during the year for the purposes for which they were raisedother than temporary deployment pending application of proceeds. The Company has notraised money by way of initial public offer during the year.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.

(xi) To the best of our knowledge and according to the information and explanationsgiven to us the Company has paid / provided managerial remuneration in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Act.

(xii) The Company is not a Nidhi Company and hence reporting under clause 3(xii) of theOrder is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) According to the information and explanations given to us the Company has madepreferential allotment of shares during the year under review. In respect of the aboveissue we further report that:

a) the requirement of Section 42 of the Companies Act 2013 as applicable have beencomplied with; and

b) the amounts raised have been applied by the Company during the year for the purposesfor which the funds were raised other than temporary deployment pending application.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into non-cash transactions with its directorsor persons connected with the directors and hence provisions of section 192 of the Act arenot applicable.

(xvi) In our opinion and according to the information and explanation given to us wereport that the Company has registered as required under section 45-IA of the ReserveBank of India Act 1934.

For Deloitte Haskins & Sells
Chartered Accountants
(Firm's Registration No. 008072S)
G. K. Subramaniam
(Partner)
Place: Mumbai (Membership No. 109839)
Date: May 6 2021 (UDIN: 21109839AAAAFJ6787)

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