To the Members of
Ebixcash World Money India Limited
(formerly Weizmann Forex Limited)
Report on the Audit of the Financial Statements
We have audited the financial statements of Ebixcash World MoneyIndia Limited (formerly Weizmann Forex Limited) (the 'Company') which comprisethe Balance Sheet as at 31st March 2020 and the Statement of Profit and Loss theStatement of Changes in Equity and the Statement of Cash Flows for the year then endedand notes to the financial statements including a summary of the significant accountingpolicies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 (the 'Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2020 and its profit changes in equityand its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial 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 (ICAI) together with ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the financial statements of thecurrent year. These matters were addressed in the context of our audit of the financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
1. Valuation of deferred tax assets
The Company's assessment of the valuation of deferred tax assetsresulting from temporary differences is significant to our audit as the calculations arecomplex and depend on sensitive and judgmental assumptions. These include amongst otherslong-term future profitability compliance of Income tax Act 1961 and the Income TaxRules 1962 framed thereunder and new developments. Hence it is considered as a Key AuditMatter.
The Company's disclosures concerning deferred taxes are included inNote 2.2 to the financial statements.
Principal Audit Procedures
Our procedures included among others procedures on the completenessand accuracy of the deferred tax assets recognised.
We assessed the applicable provisions of the aforesaid Act and theRules framed thereunder and developments in particular those related to changes in thestatutory income tax rate since this is a key assumption underlying the valuation of thedeferred tax assets.
In addition we also focused on the adequacy of the Company'sdisclosures on deferred tax assets and assumptions used.
Information Other than the Financial Statements and Auditor's ReportThereon
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the annualreport but does not include the financial statements and our auditor's report thereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.
Responsibilities of Management and Those Charged with Governance forthe Financial Statements
The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Indian AccountingStandards specified under Section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
In preparing the financial statements the Board of Directors isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether thefinancial 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 can arise from fraud or error and are considered materialif individually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
? Identify and assess the risks of material misstatement of thefinancial 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 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 thereasonableness of accounting estimates and related disclosures made by management;
? Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern; and
? Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in: (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current year and are therefore the key audit matters. We describe thesematters in our auditor's report and unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
We draw attention to Note 2.37 to the financial statements whichexplains COVID-19 that has caused significant disruptions in the business operations ofcompanies across India and has caused significant accounting and auditing challenges. Onesuch challenge being inability for the Company to conduct a physical verification ofinventories for the year-end 31st March 2020 due to Government having imposedrestrictions during the lockdown on account of health travel and safety concerns.
The Company's management however conducted physical verification ofinventories on dates other than the date of financial statements but prior to the date ofthe board meeting to be held for the purpose of adopting the financial results at certainlocations and has made available the documents in confirmation thereof. Inventories beingmaterial to the financial statements of the Company the Standard on Auditing (SA) 501 AuditEvidence - Specific Considerations for Selected items cast a duty on us to obtainsufficient appropriate audit evidence regarding the existence and condition ofinventories.
We have performed alternate audit procedures based on documents andother information made available to us to audit the existence of inventories as per theGuidance provided by the Standard on Auditing (SA) 501 Audit Evidence - SpecificConsiderations for Selected items and have obtained sufficient appropriate auditevidence to issue our unmodified opinion on these financial statements.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 (the'Order') issued by the Central Government of India in terms of Section 143(11) of the Actwe give in the Annexure 'A' a Statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act we report that:
(a) we have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;
(b) in our opinion proper books of account as required by law havebeen kept by the Company so far as it appears from our examination of those books;
(c) the Balance Sheet the Statement of Profit and Loss the Statementof Changes in Equity and the Statement of Cash Flows dealt with by this Report arein agreement with the books of account;
(d) in our opinion the aforesaid financial statements comply with theIndian Accounting Standards specified under Section 133 of the Act;
(e) on the basis of the written representations received from thedirectors as on 31st March 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2020 from being appointed as a director interms of Section 164 (2) of the Act;
(f) with respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in Annexure 'B';
(g) with respect to the other matters to be included in the AuditorsReport in accordance with the requirements of Section 197(16) of the Act as amended inour opinion and to the best of our information and according to the explanations given tous the provisions of Section 197 of the Act are not applicable to the Company; and
(h) with respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
(1) the Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements - (Refer Note 2.34 to the financialstatements);
(2) the Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses; and
(3) there has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
ANNEXURE 'A' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 of our report of even date)
(i) (a) The Company is maintaining proper records showing fullparticulars including quantitative details and situation of fixed assets.
(b) As explained to us these fixed assets have been physicallyverified by the management in accordance with a phased programme of verification which inour opinion is reasonable considering the size of the Company and nature of its assets.The frequency of physical verification is reasonable and no material discrepancies werenoticed on such verification.
(c) The Company did not had immovable properties as at 31st March2020. Accordingly the Paragraph 3(I) (c) of the Order is not applicable to the Company.
(ii) (a) As explained to us inventories of foreign currency notes havebeen physically verified by the management at reasonable intervals during the year. In ouropinion the frequency of such verification is reasonable. (Refer Note 2.37 to thefinancial statements and our observations under paragraph Other Matter of our mainreport).
(b) As per the information given to us the procedures of physicalverification of inventory followed by the management are in our opinion reasonable andadequate in relation to the size of the Company and the nature of its business.
(c) The Company is maintaining proper records of inventory. Thediscrepancies noticed on verification between the physical stocks and the book recordswhich were not material have been properly dealt with in the books of account.
(iii) According to the information and explanations given to us theCompany has granted during the year unsecured loan to a company covered in the registermaintained under Section 189 of the Act. The Company has not granted any loans secured orunsecured to firms limited liability partnerships or other parties covered in theregister maintained under Section 189 of the Act. However with respect to unsecured loansto the companies covered in the register maintained under Section 189 of the Act theterms and conditions of the grant of such loans are not prejudicial to the Company'sinterest and also there are no stipulations to the schedule of repayment of principal andpayment of interest where applicable.
(iv) As per information and explanations given to us the Company hasnot given loans made investments or given guarantees to persons covered under Section 185of the Act. In respect of loans investments guarantee and security to parties theCompany has complied with the provisions of Section 186 of the Act.
(v) According to the information and explanations given to us and therecords examined by us the Company has not accepted any deposits from the public duringthe year to which the directives issued by the Reserve Bank of India and the provisions ofSections 73 to 76 and other relevant provisions of the Act and the rules framed thereunderapply. Accordingly the Paragraph 3(v) of the Order is not applicable to the Company
(vi) According to the information and explanations given to us theCentral Government has not prescribed the maintenance of cost records under Section 148(1)of the Act for any of the goods sold and services rendered by the Company.
(vii) (a) According to the information and explanations given to usthe Company is generally regular in depositing undisputed statutory dues includingprovident fund employees' state insurance income tax goods and services tax cess andany other statutory dues where applicable to the appropriate authorities. According tothe information and explanations given to us there are no arrears of outstandingstatutory dues as at the last day of the financial year for a period of more than sixmonths from the date they became payable.
(b) According to the information and explanations given to us and therecords of the Company examined by us there are no statutory dues as at 31st March 2020which has not been deposited on account of any pending dispute.
(viii) According to the information and explanations given to us theCompany has not defaulted in repayment of loans or borrowings to financial institutionsand banks. The Company has not issued any debentures. The Company has not borrowed anyfunds from the Government. Accordingly the Paragraph 3(viii) of the Order is notapplicable to the Company.
(ix) According to the information and explanations given to us theCompany has not raised monies by way of initial public offer or further public offer(including debt instruments). In our opinion and according to the information andexplanations given to us on an overall basis the term loan has been applied for thepurpose for which the term loan was obtained.
(x) During the course of our examination of the books and records ofthe Company carried out in accordance with generally accepted auditing practices inIndia and according to the information and explanations given to us we have neither comeacross any fraud by the Company or any fraud on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of such case by management.
(xi) According to the information and explanations given to us theprovisions of Section 197 read with Schedule V to the Act are not presently applicable.Accordingly the Paragraph 3(xi) of the Order is not applicable to the Company.
(xii) According to the information and explanations given to us theCompany is not a Nidhi company. Accordingly the Paragraph 3(xii) of the Order is notapplicable to the Company.
(xiii) According to the information and explanations given to us allthe transactions with the related parties are in compliance with Sections 177 and 188 ofthe Act and the relevant details have been disclosed in the financial statements etc. asrequired under Indian Accounting Standard (Ind AS) 24 Related Party Disclosuresspecified under Section 133 of the Act.
(xiv) According to the information and explanations given to us theCompany had not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year. Accordingly the
Paragraph 3(xiv) of the Order is not applicable to the Company.
(xv) According to the information and explanations given to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith him during the year. Accordingly compliance with the provisions of Section 192 ofthe Act is not applicable to the Company.
(xvi) According to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.
ANNEXURE 'B' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2(f) of our report of even date)
Report on the Internal Financial Controls under Section 143(3)(i) ofthe Companies Act 2013 (the Act')
We have audited the internal financial controls over financialreporting of Ebixcash World Money India Limited (formerly Weizmann ForexLimited) (the 'Company') as of 31st March 2020 in conjunction with our audit of thefinancial 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 andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the 'Guidance Note') issued by the Institute of Chartered Accountantsof India (ICAI). These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note and the Standards on Auditing issued by ICAI andprescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that: (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to theexplanations given to us read together with Note 2.37 to the financial statements and ourobservations under paragraph Other Matter of our main report the Company has in allmaterial respects an adequate internal financial controls system over financial reportingand such internal financial controls over financial reporting were operating effectivelyas of 31st March 2020 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note issued by the ICAI.
| ||SHARP & TANNAN LLP |
| ||Chartered Accountants |
| ||Firm's Registration No.127145W/W100218 |
| ||by the hand of |
| ||Edwin P. Augustine |
| ||Partner |
|Mumbai 19 June 2020 ||Membership No. 043385 |
| ||UDIN 20043385AAAACP2799 |