TO THE BOARD OF DIRECTORS OF ENBEE TRADE AND FINANCE LIMITED
We have audited the accompanying Standalone Financial Statements of EnbeeTrade and Finance Limited ("the Company") which comprise the standaloneBalance Sheet as at 31st March 2021 and the standalone Statement of Profit andLoss (including other comprehensive income) standalone Statement of Changes in Equity andstandalone statement of Cash Flows for the year then ended and notes to the StandaloneFinancial Statements including a summary of the Significant Accounting Policies and otherexplanatory information (hereinafter referred to as "the Standalone FinancialStatements").
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Companies Act 2013 (the "Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies(Indian AccountingStandards) Rules 2015 as amended ("IndAS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at 31stMarch2021 and profit and other comprehensive income changes in equity and its cash flows forthe year ended on that date.
Basis for Opinion
We conducted our audit of this Interim Standalone Financial Statementin accordance with the Standards on Auditing ("SAs") specified under Section143(10) of the Act. Our responsibilities under those Standards are further described inthe Auditor s Responsibilities for the Audit of the Interim Standalone Financial Statementsection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India ("ICAI")together with the independence requirements that are relevant to our audit of the InterimStandalone Financial Statement under the provisions of the Act and the Rules thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI s Code of Ethics. We believe that the audit evidence obtained byus is sufficient and appropriate to provide a basis for our audit opinion.
Key audit matters
Key audit matters as per SA 701are those matters that in ourprofessional judgment were of most significance in our audit of the Financial Statementof the current period. These matters were addressed in the context of our audit of theFinancial Statement as a whole and in forming our Opinion thereon and we do not providea separate opinion on these matters.
Description of key audit matters:
|Key audit matter ||How the matter was addressed in our audit |
|Impairment of loans and advances to customers Subjective estimate || |
|Recognition and measurement of impairment of loans and advances involve significant management judgement. ||Our audit procedures included: |
| || Evaluation of the appropriateness of the impairment principles used by management based on the requirements of Ind AS 109 our business understanding and industry practice. |
|Under Ind AS 109 Financial Instruments allowance for loan losses are determined using expected credit loss (ECL) Model. The Company's impairment allowance is derived from estimates including the historical default and loss ratios current economic condition and forward-looking information. || |
| || Assessing design and implementation of key internal financial controls over loan impairment process used to calculate the impairment charge. |
| || Understanding management's revised processes systems and controls implemented in relation to impairment allowance process particularly in view of COVID-19 regulatory package. |
|Management exercises judgement in determining the quantum of loss based on a range of factors. The most significant areas are: || |
|- Loan staging criteria || Evaluating management's controls over collation of relevant information used for determining estimates for management overlays on account of COVID-19. |
|- Calculation of probability of default / Loss given default || |
|- Determination of exposure at default || |
|- Consideration of forward looking macroeconomic factors || |
| || Testing of review controls over measurement of impairment allowances and disclosures in financial statements. |
|- Complexity of disclosures || |
|There are many data inputs required by the ECL model. || |
|This increases the risk of completeness and accuracy of the data that has been used to create assumptions in the model. In some cases data is unavailable and reasonable alternatives have been applied to allow calculations to be performed. || |
|Impact of COVID -19 || |
|On 11 March 2021 the World Health Organisation declared the Novel Coronavirus (COVID-19) outbreak to be a pandemic. ||Substantive tests |
| || Focus on appropriate application of accounting principles validating completeness and accuracy of the data and reasonableness of assumptions used in the calculation. |
|We have identified the impact of and uncertainty related to the COVID-19 pandemic as a key element and consideration for recognition and measurement of impairment on loans and advances on account of: || |
| || Test of details over calculation of impairment allowance for assessing the completeness accuracy and relevance of data. |
|i. Short- and long-term macroeconomic effect on businesses in the country and its consequential and cascading negative impact on revenue and Company's customers ability to repay dues; and || Assessing the reasonableness and appropriateness of management rationale for determination of criteria for SICR considering both: adverse effects of COVID-19and mitigants in the form of the RBI / Government financial relief package. |
|ii. application of regulatory package announced by the Reserve Bank of India (RBI) on asset classification and provisioning. || Considered the reasonableness and appropriateness of disclosures relating to financial risk management including those relating to ECL provision on loans and advances. |
|Management has conducted a qualitative assessment of significant increase in credit risk (SICR') of its loan and advances and considered updated macro-economic scenarios to factor in the potential impact of COVID-19 on expected credit loss provision. || |
Emphasis of matter
We draw attention to Note No. 34 to the Financials:
As Described in Note No. 34 the extent to which COVID-19pandemic will impact the Company s provision on assets is dependent on the futuredevelopments which are highly uncertain. The impact of the global health pandemic may bedifferent from that estimated at the date of approval of these standalone financialStatement and the Company will continue to closely monitor any material changes to futureeconomic conditions.
Our report is not modified in respect of this matter.
Information Other than the Standalone Financial Statements andAuditors' Report Thereon
The Company s management and Board of Directors are responsible for theother information. The other information comprises the information included in the Companys annual report but does not include the financial statements and our auditors reportthereon. The other information is expected to be made available to us after the date ofthis auditor s report.
Our opinion on the Standalone Financial Statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the Standalone Financial Statements orour knowledge obtained in the audit or otherwise appears to be materially misstated.
The Company has adopted Ind AS in accordance with Companies (IndianAccounting Standards) Rules 2015as amended. Accordingly prepared its standalone Ind ASfinancial statements and has restated the comparative financial information of the Companyfor the year ended March 31 2019 and the transition date opening balance sheet as atApril 1 2018 included in these standalone Ind AS Financial Statements which are based onthe previously issued statutory financial statements prepared in accordance with theCompanies (Accounting Standards) Rules 2006 audited by us and report for the year endedMarch 31 2019 and March 31 2018 dated 28th May 2019 and 29th May2018 respectively expressed an unmodified opinion on those Financial Statements asadjusted for the differences in the accounting principles adopted by the Company ontransition to the Indian Accounting Standards which have been audited by us.
Due to COVID-19 pandemic and the lockdown and other restrictionsimposed by the Government and local administration the audit processes were carried outbased on the remote access to the extent available/feasible and necessary records madeavailable by management through digital means.
Our opinion is not modified in respect of these matters.
Management's and Board of Directors' Responsibility for theStandalone Financial Statements
The Company s management and Board of Directors are responsible for thematters stated in section 134(5) of the Act with respect to the preparation of theseStandalone Financial Statements that give a true and fair view of the state of affairsprofit/loss and other comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (Ind AS) specified under section 133 of the Act.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring accuracy and completeness of theaccounting records relevant to the preparation and presentation of the StandaloneFinancial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the Standalone Financial Statements the Management andBoard of Directors are responsible for assessing the Company s ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless the Board of Directors either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.
Board of Directors is also responsible for overseeing the Company sfinancial reporting process.
Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements
Our objectives are to obtain reasonable assurance about whether theStandalone Financial Statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor s report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Financial Statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements
Identify and assess the risks of material misstatement of the Standalone 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 to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures in the standalone financial statements madeby the Management and Board of Directors.
Conclude on the appropriateness of the Management and Board of Directors use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company s ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor s report tothe related disclosures in the Standalone Financial Statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor s report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of theStandalone Financial Statements including the disclosures and whether the StandaloneFinancial Statements represent the underlying transactions and events in a manner thatachieves fair presentation.
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.
Report on Other Legal and Regulatory Requirements
A. As required by the Companies (Auditors Report) Order 2016("the Order") issued by the Central Government in terms of section 143(11) ofthe Act we give in the "Annexure A" a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable.
B. 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 standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks 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 as on 31stMarch 2021 taken on record by the Board of Directors none of the directors aredisqualified as on 31st March 2021 from being appointed as a director in termsof Section 164(2) of the Act.
f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".
C. With respect to the other matters to be included in theAuditors' Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014
In our opinion and to the best of our information and according to theexplanations given to us:
i. The Company does not have any pending litigations which would impact its financialposition.
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.
iv. The disclosures in the Standalone Financial Statements regardingthe holdings as well as the dealings in specified bank notes during the period from 8November 2016 to 30 December 2016 have not been made in the Standalone FinancialStatements since they do not pertain to the financial year ended 31st March2021.
Annexure A to the Auditors' Report
The Annexure referred to in Independent Auditors Report to the membersof the Enbee Trade & Finance Limited on the standalone financial statements for theyear ended 31st March 2021 we report that:
i. (a)The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed Assets.
(b)These fixed assets have been physically verified by the management at regularinterval considering the size of the company and nature of assets. No Materialdiscrepancies have been noticed on such verification.
(c)According to the information and explanations given by the management there are noimmovable properties included in fixed assets of the company and accordingly therequirements under paragraph 3(i)(c) of the Companies (Auditor s report) Order 2016 arenot applicable to 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. The Company has not granted any loan to the entity covered in the registermaintained under section 189 of the Companies Act 2013 ("the Act") in thecurrent year.
iv. The Company is an NBFC. Hence the provisions of Section 185 are not applicable tothe Company. However Section 186 is applicable and the Company has complied with theprovisions of the same.
v. The Company has not accepted any deposits from the public.
vi. The Company is not liable to maintain Cost Records under Section 148(1) of theCompanies Act 2013.
vii. Statutory dues:
a. According to the information and explanation given to us and on thebasis of our examination of the records of the Company amounts deducted / accrued in thebooks of account in respect of undisputed statutory dues in respect of provident fundincome tax sales tax value added tax duty of customs service tax cess and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities. As explained to us the Company did not have any dues onaccount of employees state insurance and duty of exercise.
As on balance sheet date the company has not paid following statutorydues for more than6months
|Particulars ||Amount |
|TDS ||1016950 |
|Total ||1016950 |
b. According to the information and explanations given to us and therecords of the Company examined by us there are no disputed dues in respect of Incometax sales tax duty of customs duty of excise service tax and value added taxed wereoutstanding at the year end.
viii. The Company does not have any loans or borrowings from anyfinancial institution banks government or debenture holders during the year.Accordingly paragraph 3(viii) of the Order is not applicable.
ix. The Company did not raise any money by way of initial public offer(including debt instrument) and term loans during the year. Accordingly paragraph 3 (ix)of the Order is not applicable.
x. In our opinion and according to the information and explanation given to us nofraud on or by the Company by its officers or employees has been noticed or reportedduring the course of our audit that causes the financial statements to be materiallymisstated.
xi. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/ provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the Order is notapplicable.
xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Section 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
xiv. According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
xv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non- cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
xvi. The Company is registered under Section 45-IA of the RBI Act 1934 and hasreceived a Certificate of Registration from the Reserve Bank of India ( RBI ) on 20thApril 1998 to commence/carry on the business of Non-Banking Financial Institution ( NBFC) without accepting public deposits.
Annexure B to the Auditors' Report
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of Enbee Trade and Finance Limited ("the Company") as of March 312021 in conjunction with our audit of the standalone financial statements of the Companyfor 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 issued by the Institute of Chartered Accountants of India (ICAI).These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company s policies thesafeguarding 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 Companies Act 2013.
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 on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor s judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error. We believe thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the Company s internal financial controls system over financialreporting.
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 the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2021 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.
|For Ambavat Jain And Associates LLP |
|Chartered Accountants |
|Firms Registration No:109681W |
|Chirag Shah |
|Membership No:125997 |
|Place: Mumbai |
|Date:28th June2021 |