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Edelweiss Financial Services Ltd.

BSE: 532922 Sector: Financials
NSE: EDELWEISS ISIN Code: INE532F01054
BSE 00:00 | 20 Feb 89.85 1.30
(1.47%)
OPEN

89.35

HIGH

93.45

LOW

88.35

NSE 00:00 | 20 Feb 89.70 1.15
(1.30%)
OPEN

90.00

HIGH

93.40

LOW

88.20

OPEN 89.35
PREVIOUS CLOSE 88.55
VOLUME 84785
52-Week high 210.30
52-Week low 67.10
P/E 78.82
Mkt Cap.(Rs cr) 8,395
Buy Price 89.85
Buy Qty 100.00
Sell Price 92.50
Sell Qty 5.00
OPEN 89.35
CLOSE 88.55
VOLUME 84785
52-Week high 210.30
52-Week low 67.10
P/E 78.82
Mkt Cap.(Rs cr) 8,395
Buy Price 89.85
Buy Qty 100.00
Sell Price 92.50
Sell Qty 5.00

Edelweiss Financial Services Ltd. (EDELWEISS) - Auditors Report

Company auditors report

To the Members of Edelweiss Financial Services Limited

Report on the Audit of the Standalone Ind AS Financial Statements

Opinion

We have audited the accompanying standalone Ind AS financial statements of EdelweissFinancial Services Limited ("the Company") which comprise the Balance sheet asat March 31 2019 the Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the standalone Ind AS financial statements including asummary 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 Ind AS financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2019 its profitincluding other comprehensive income its cash flows and the changes in equity for the yearended on that date.

Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those SAs are further described in the 'Auditor's Responsibilitiesfor the Audit of the standalone Ind AS financial statements' section of our report. We areindependent of the Company in accordance with the 'Code of Ethics' issued by the Instituteof Chartered Accountants of India together with the ethical requirements that are relevantto our audit of the Ind AS financial statements under the provisions of the Act and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thestandalone Ind AS financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements for the financialyear ended March 31 2019. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. For each matter below ourdescription of how 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 standalone Ind AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the standalone Ind AS financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying standalone Ind AS financialstatements.

Key audit matiers How our audit addressed the key audit matter
Transition to Ind AS accounting framework (as described in note 52 of the standalone Ind AS financial statements) x
The Standalone Ind AS Financial Statements are the first financial statements the Company has prepared in accordance with Ind AS. For periods up to and including the year ended financial statements in accordance with accounting standards notified under the section 133 of the Companies Act 2013 read with Rule 7 of the Companies (Accounts) Rules 2014 (Indian GAAP or previous GAAP). Accordingly for transition to Ind AS the Company has prepared standalone Ind AS financial statements which comply with Ind AS applicable for periods ending on March 31 2019 together with the comparative period data as at and for the year ended March 31 2018. In preparing these standalone Ind AS financial statements the Company's opening balance sheet was prepared as at April 1 2017 the Company's date of transition to Ind AS. Our audit procedures included considering the processes laid down by the management to implement such transition combined with procedures performed as follows:

The transition has involved significant change in the Company's policies and processes for financial reporting including generation of supportable information and applying estimates to inter alia determine impact of Ind AS on accounting.

• We obtained management's assessment of applicability of various accounting standards under Ind AS and their impact on the Company's standalone Ind AS financial statements and reviewed the nature of the Ind AS adjustments based on the applicable Ind AS and previous period accounting policies prepared in accordance with IGAAP.
 

In view of the material impact and the complexity of implementation of the Ind AS framework and significance of the various disclosure the transition to IND AS was of particular importance for our audit as any error could lead to material misstatement in the preparation and presentation of the standalone Ind AS financial statements.

• We tested the exemptions taken by the Company for first time adoption of Ind AS of the standalone Ind AS financial statements.
 

 

• We tested the details of Ind AS adjustments carried out by the Company as described in the reconciliation of equity as at the transition date and comparative year end date reported under erstwhile Indian GAAP to Ind AS and reconciliation of the statement of profit and loss for the comparative year end date reported under erstwhile Indian GAAP to Ind AS.
• Performed test of details by inspection of contracts documents and policies to assess the appropriateness of the Ind AS adjustments.
• We assessed the disclosures with respect to the transition in accordance with the requirements of Ind AS 101 and other applicable disclosures in the standalone Ind AS financial statement in accordance with the requirements of relevant Ind AS.

Information Other than the Standalone Ind AS Financial Statements and Auditor's ReportThereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe standalone Ind AS financial statements and our auditor's report thereon.

Our opinion on the standalone Ind AS 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 standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone Ind AS financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated. If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Responsibilities of Management and Those Charged with Governance for the Standalone IndAS 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 Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation 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 Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone Ind AS 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 Responsibilities tor the Audit of the Standalone Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalone Ind ASfinancial 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 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 standalone Ind ASfinancial 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 in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch 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 standalone Ind AS 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.

• Evaluate the overall presentation structure and content of the standalone IndAS financial statements including the disclosures and whether the standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

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 Ind AS financialstatements for the financial year ended March 31 2019 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Other Matter

The comparative financial statement of the Company for the year ended March 31 2018and the transition date opening balance sheet as at April 01 2017 included in thesestandalone IND AS financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with accounting principles generally acceptedin India including the Accounting Standard specified under section 133 of the Act readwith Rule 7 of the Companies (Accounts) Rules 2014 audited by the predecessor auditorswhose report for the year ended March 31 2018 and March 31 2017 dated May 3 2018 andMay 17 2017 respectively expressed an unmodified opinion on those standalone Ind ASfinancial statements as adjusted for the differences in the accounting principles adoptedby the Company on transition to the Ind AS which have been audited by us.

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 sub-section (11) of section 143 ofthe Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 3 and 4 of the Order.

2. 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 including the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Accounting Standards specified under Section 133 of the Act read the Companies(Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone Ind AS financial statementsand the operating effectiveness of such controls refer to our separate Report in"Annexure 2" to this report;

(g) In our opinion the managerial remuneration for the year ended March 31 2019 hasbeen paid / provided by the

Company to its directors in accordance with the provisions of section 197 read withSchedule V to 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 in our opinion and to the best of ourinformation and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements - Refer Note 39 to the standaloneInd AS financial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts includingderivative contracts-Refer N ote 55 to the standalone Ind AS financial statements;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Shrawan Jalan
Partner
Membership Number: 102102
Place : Mumbai
Date : May 14 2019

Annexure 1 referred to in paragraph 1 under the heading "Report on other legal andregulatory requirements" of our report of even date

Re: Edelweiss Financial Services Limited ('the Company'!

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

(b) All fixed assets have not been physically verified by the management during theyear but there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. No materialdiscrepancies were noticed on such verification.

(c) According to the information and explanations given by the management and basedupon the audit procedures performed the title deeds of immovable properties included inproperty plant and equipment are held in the name of the Company.

(ii) The Company's business does not involve inventories and accordingly therequirements under paragraph 3(ii) of the Order are not applicable to the Company.

(iii) According to the information and explanations given to us and based upon theaudit procedures performed the Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013. Accordingly the provisions ofclause 3(iii)(a) (b) and (c) of the Order are not applicable to the Company and hence notcommented upon.

(iv) In our opinion and according to the information and explanations given by themanagement provisions of section 185 and 186 of the Companies Act 2013 in respect ofloans to directors including entities in which they are interested and in respect of loansand advances given investments made and guarantees and securities given have beencomplied with by the Company.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) To the best of our knowledge and as explained the Company is not in the businessof sale of any goods. Therefore in our opinion the provisions of clause 3(vi) of theOrder are not applicable to the Company.

(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax goods and service tax cess and other statutory dues have generallybeen regularly deposited with the appropriate authorities though there has been a slightdelay in a few cases. The provisions relating to duty of custom duty of excise valueadded tax and sales tax are not applicable to the Company.

(b) According to the information and explanations given to us and based upon the auditprocedures performed no undisputed amounts payable in respect of provident fundemployees' state insurance income-tax goods and service tax cess and other statutorydues were outstanding at the year end for a period of more than six months from the datethey became payable. The provisions relating to duty of custom duty of excise valueadded tax and sales tax are not applicable to the Company.

(c) According to the information and explanations given to us and based upon the auditprocedures performed the dues of income-tax goods and service tax and cess on accountof any dispute are given below. The provisions relating to duty of custom duty ofexcise value added tax and sales tax are not applicable to the Company.

Name of the statute Nature of the dues Amount (Rs in mn.) Period to which the amount relates Forum where the dispute is pending
Income Tax Act 1961 Income Tax 0.88 AY 2014-15 The Commissioner of Income Tax (Appeals)
Service Tax Service Tax and penalty 414.60 2008-09 to 2011-12 CESTAT Mumbai

(viii) In our opinion and according to the information and explanations given by themanagement and based upon the audit procedures performed the Company has not defaulted inrepayment of loans or borrowing to a financial institution and banks government or duesto debenture holders.

(ix) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not raised any money by way of initialpublic offer or further public offer hence not commented upon.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccordingly to the information and explanations given to us by the management we haveneither come across any instance of material fraud by the Company or on the Company by theofficers and employees noticed or reported during the year nor have we been informed ofany such case by the management.

(xi) According to the information and explanations given by the management and basedupon the audit procedures performed the Company has paid or provided managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V of the Act.

(xii) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the management and basedupon the audit procedures performed transactions with the related parties are incompliance with section 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the notes to the standalone Ind AS financial statements asrequired by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet and based upon the audit procedures performed theCompany has not made any preferential allotment or private placement of shares during theyear under review and hence reporting requirements under clause 3(xiv) are not applicableto the Company and not commented upon.

(xv) According to the information and explanations given by the management and basedupon the audit procedures performed the Company has not entered into any non-cashtransactions with directors or persons connected with him as referred to in section 192 ofCompanies Act 2013.

(xvi) According to the information and explanations given to us and based upon theaudit procedures performed the provisions of section 45-IA of the Reserve Bank of IndiaAct 1934 are not applicable to the Company.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
per Shrawan Jalan
Partner
Membership Number: 102102
Place : Mumbai
Date : May 14 2019

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

To the Members of Edelweiss Financial Services Limited

We have audited the internal financial controls over financial reporting of EdelweissFinancial Services Limited ("the Company") as of March 31 2019 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended 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 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 the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing as specified under section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls and both issued by the Institute of Chartered Accountants of India.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 standalone Ind AS financial statements whether due to fraudor error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls system overfinancial 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 standalone Ind AS 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 standaloneInd AS financial statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the Company are being made only in accordance withauthorisations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the Company's assets that could have a material effect on the standaloneInd AS 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 o improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected. Alsoprojections of any evaluation of the internal financial controls over financial reportingto future periods are subject to the risk tha the internal financial control overfinancial reporting may become inadequate because of changes in conditions or that thedegref of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reportinj and such internal financial controlsover financial reporting were operating effectively as at March 31 2019 based on theinterna control over financial reporting criteria established by the Company consideringthe essential components of internal contro stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of ChartererAccountants of India.

For S.R. Batliboi & Co. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005 per Shrawan Jalan
Partner
Membership Number: 102102
Place : Mumbai
Date : May 14 2019