To the Members of Morarka Finance Limited Report on the Audit of the FinancialStatements Opinion
1. We have audited the accompanying financial statements of Morarka Finance Limited (hereinafterreferred to as "the Company") which comprises the Balance Sheet as at 31st March2021 and the Statement of Profit and Loss (including Other Comprehensive Income)Statement of changes in Equity and Statement of Cash flows for the year then the FinancialStatements including Significant Accounting Policies and other ExplanatoryInformation (hereinafter summary of referred to as "Financial Statements").
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Financial Statements give the information as required by theCompanies Act 2013 as amended (the Act) in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the Company as at 31st March 2021 and totalcomprehensive income (comprising of profit and other comprehensive and its Cash flows forthe year then ended.
Basis for Opinion
3. We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Act.
Our responsibilities under those SAs are further described in the AuditorsResponsibilities for the Audit of the Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other 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 opinion.
Key Audit Matters
4. Key Audit Matters (KAM) are those matters that in our professionaljudgment were of most significance in our audit of the financial statements of the yearended 31st March 2021. These matters were addressed in the context of ouraudit of the financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters.
We have determined the matter described below to be the key audit matter in our auditof the Company for the year ended 31st March 2021:
|Key Audit Matter ||Auditors Response |
|Fair Valuation of investments || |
|The Companys investments are measured at fair value at each reporting date and these fair value measurements significantly impact the Companys results. ||We have assessed the Companys process to compute the fair value of various investments. |
|Within the Companys investment portfolio the valuation of certain assets such as unquoted equity / preference prices requires significant being unavailable and limited liquidity in the markets. ||For quoted instruments we have independently obtained market quotations and recalculated the fair valuations. |
| ||For the unquoted instruments we have obtained an understanding of the various valuation methods used by management and analysed the reasonableness of the principal assumptions made for estimating the fair values and various other data used while arriving at the fair value measurement. |
|Placing reliance on Electronic Evidence and Performing of Audit Procedures during the Mandatory National Lockdown due to Covid-19 Pandemic. || |
|The Company procedures of recording and storing information necessary for preparation of Financial Statements and having them audited is combination of electronic and manual processes. These processes were required to be audited by us remotely without visiting the Company premises due to the mandatory national lockdown and thereafter. Consequently we have placed reliance on completeness and accuracy of the data and records made available to us electronically through e-mail. Had we been physically present at the company premises we would have otherwise verified the physical copies of critical documents and we would have collected the audit evidence in physical copies. ||We have carried out the validation of the electronic evidence provided by the management by performing the following procedures: |
| ||Inquiring with the Management of the controls they have implemented to convert physical documents into electronic versions and understanding them |
| ||Inquiring with the Management the method and controls used to extract information from various Registers maintained and of operating expenses etc. and understanding how the Management ensures completeness and accuracy |
| ||Correlating various data obtained to ensure consistency and integrity |
| ||Obtaining representations from the management wherever necessary. |
Information Other than the Financial Statements and Auditors Report Thereon
5. The Companys management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in theCompanys Annual Report but does not include the financial statements and ourauditors report thereon.
6. Our opinion on the financial statements does not cover the other information and wedo not express any form of assurance conclusion thereon.
7. In connection with our audit of the financial statements our responsibility is toread the other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and those Charged with Governance for the FinancialStatements
8. The Companys Management and Board of Directors are responsible for the mattersstated in 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 (Ind AS) specified under Section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; the selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
9. In preparing the financial statements management and Board of Directors areresponsible for assessing the ability of the company to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the management and Board of Directors either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso. The Board of Directors of the company are also responsible for overseeing thefinancial reporting process.
Auditors Responsibilities for the Audit of the Financial Statements
10. Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditors report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.
11. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
(i) Identify and assess the risks of material misstatement of the financial statementswhether due perform audit procedures responsive to those risks and obtain audit evidencethat is sufficient and appropriate to provide a basis for our opinion. The risk of notdetecting a material misstatement resulting from fraud is higher than for one resultingfrom error as fraud may involve collusion forgery intentional omissionsmisrepresentations or the override of internal control.
(ii) Obtain an understating 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 with reference to financial statements in place andthe operating effectiveness of such controls.
(iii) Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management of the company.
(iv) Conclude on appropriateness of managements use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on theCompanys ability to continue as going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors 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 auditors report. However future events or conditions may cause theCompany to cease to continue as a going concern.
(v) Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
12. We communicate with those charged with governance of the Company included in thefinancial statements of which we are the independent auditors regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
13. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
14. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial Statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditors report unless law or regulation precludes public disclosure about thematter or 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
Report on Other Legal and Regulatory Requirements
15. As required by the Companies(Auditors Report) order 2016 (" theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the Annexure B Statement on the matters specified inparagraphs 3 and 4 of the order to the extent applicable.
16. 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 purpose 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 Statement of Profit and Loss (including other Comprehensiveincome) the Statement of changes in equity and Cash Flow Statement dealt with by thisReport are in agreement with the books of account;
d. In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act.
e. On the basis of written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 st March 2021 from being appointed as a director interms of section 164 (2) of the Act;
f. With respect to the adequacy of the internal financial controls over financialstatements of the Company and the operating effectiveness of such controls refer to ourseparate Report in "AnnexureA" to this report;
g. With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company does not have any pending litigations having major implication on itsfinancial position in its financial statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection
Fund by the Company.
For B. P. Gharda and Co.
Firm Registration No.103155W
Membership No.: 37866
Place : Mumbai
Date: May 21 2021
ANNEXURE "A" TO INDEPENDENT AUDITORS REPORT
Referred to in paragraph 16(f) of the Independent Auditors Report of even date tothe members of Morarka Finance Limited on the financial statement for the yearended 31 st March 2021.
Report on the Internal Financial Controls with reference to financial statements underClause(1) of Sub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
1. We have audited the internal financial controls with reference to financialstatements of Morarka Finance Limited ("the Company") stat as of31 March2021inconjunctionwithourauditofthefinancial ements of the Company for the yearended on that date.
Managements Responsibility for Internal Financial Controls
2. The Companys Management is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting 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 the Companys policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records as required under the Companies Act2013. and the timely preparation of reliable financial information
3. Our responsibility is to express an opinion on the Companys internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing asprescribed 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 with reference to financial statementswas established and maintained respect and if such controls operated effectively in allmaterials.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditorsjudgement including the assessment of the risks of material or error. Misstatement of thefinancial statements whether due to fraud
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Companys internal financial controlssystem with reference to financial statements.
Meaning of Internal Financial Controls with reference to Financial Statements
6. A companys internal financial control with reference to financial statementsis a process designed to provide reasonable assurance regarding the reliability offinancial reporting and the preparation of financial statements for external purposes inaccordance with generally accepted accounting principles. A companys internalfinancial control with reference to financial statements includes those policies andprocedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the companys assets that could havea material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to FinancialStatements
7. Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 with referenceto financial statements to future periods are subject to the risk that the internalfinancial control with reference to financial statements may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.
8. In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls with referencetofinancialstatementswereoperatingeffectivelyas at 31 stMarch 2021 based on the internal control over financial reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe ICAI.
For B. P. Gharda and Co.
Firm Registration No.103155W
Membership No.: 37866
Place : Mumbai
Date: May 21 2021
ANNEXURE "B" TO INDEPENDENT AUDITORS REPORT
Referred to in Paragraph 15 of the Independent Auditors Report of even date to themember of Morarka Finance Limited on the financial statement as of and for the year ended31st March 2021
1. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The fixed assets were physically verified during the year by the Management inaccordance with regular program of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.
(c) According to the information and explanations given by the management the titledeeds of immovable properties included in fixed assets are held in the name of thecompany.
2. The Companys business does not involve inventories except stock-in-trade andaccordingly the requirements under paragraph 3(ii) of the Order are not applicable to theCompany.
3. 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 theCompanies Act 2013.
Accordingly the provisions of clause 3(iii)(a) (b) and (c) of the Order are notapplicable to the Company and hence not commented upon.
4. In our opinion and according to the information and explanations given to usprovisions of section 185 and 186 of the Companies Act 2013 in respect of loans todirectors including entities in which they are interested and in respect of loans andadvances given investments made and guarantees and securities given have been compliedwith by the company.
5. According to the information and explanations given to us the Company has notaccepted any deposits from the public.
6. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Companies Act for any services rendered by the Company henceparagraph 3(vi) of the Order is not applicable to the Company.
7. According to the information and explanations given to us and the records examinedby us
(a) The Company has been regular in depositing undisputed statutory dues includingProvident Fund Employees State Insurance Income-tax Goods and Service Tax andother material statutory dues applicable to it to the appropriate authorities. Consideringthe nature of business that the Company is engaged in Sales-tax Custom Duty Excise Dutyand Value Added Tax are not applicable to the Company.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees State Insurance Income-Tax Goodsand Service Tax and other material statutory dues were not outstanding at the year endfor a period of more than six months from the date they became payable.
(c) According to the records of the Company there are no dues of Income-Tax Goods andService Tax that has not been deposited on account of any disputes as on 31stMarch 2021.
8. In our opinion and according to the information and explanations given to us theCompany did not have any loans or borrowing from financial institution bank governmentor dues to any debenture holders during the year. Accordingly paragraph 3(viii) of theorder is not applicable to the Company.
9. The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) and term loans.
Accordingly paragraph 3(ix) of the Order is not applicable to the Company
10. Based upon the audit procedures performed by us to the best of our knowledge andbelief and according to the information and explanations given to us by the management nofraud by the company or fraud on the company by its officers or employees of the
Company has been noticed or reported during the year.
11. According to the information and explanations given to us and based on ourexamination of the records of the Company No remuneration is paid to any Director interms of the provision of Section 197 read with schedule 5 to the Companies Act 2013except sitting fees which is paid within the limits provided under the Companies Act.
12. In our opinion and according to the information and explanation given to us theCompany is not a Nidhi Company. Accordingly paragraph 3(xii) of the order is notapplicable to the Company.
13. According to the information and explanations given to us and based on thedocuments and records produced before us the transactions with the related parties are incompliance with section 177 and 188 of Companies Act 2013 and the details thereof havebeen disclosed app in the notes to the financial statements as required by the licableaccounting standards.
14. According to the information and explanations given to us and based on thedocuments and records produced before us the company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly the provisions of Clause 3(xiv) of the Order is not applicable.
15. According to the information and explanations given to us and based on thedocuments and records produced before us the Company has not entered into any non-cashtransactions with directors or persons connected with them as referred to in section 192of Companies Act 2013.
16. The Company has obtained the requisite registration as a non- banking financialinstitution under section 45-IA of the Reserve Bank of India Act 1934.
For B. P. Gharda and Co.
Firm Registration No.103155W
Membership No.: 37866
Place : Mumbai
Date: May 21 2021