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Mudra Financial Services Ltd.

BSE: 539819 Sector: Financials
NSE: N.A. ISIN Code: INE967S01014
BSE 00:00 | 05 Aug Mudra Financial Services Ltd
NSE 05:30 | 01 Jan Mudra Financial Services Ltd
OPEN 3.85
PREVIOUS CLOSE 3.85
VOLUME 50
52-Week high 3.85
52-Week low 0.00
P/E 2.33
Mkt Cap.(Rs cr) 2
Buy Price 3.85
Buy Qty 55.00
Sell Price 3.50
Sell Qty 100.00
OPEN 3.85
CLOSE 3.85
VOLUME 50
52-Week high 3.85
52-Week low 0.00
P/E 2.33
Mkt Cap.(Rs cr) 2
Buy Price 3.85
Buy Qty 55.00
Sell Price 3.50
Sell Qty 100.00

Mudra Financial Services Ltd. (MUDRAFINSER) - Auditors Report

Company auditors report

Report on the Audit of the Ind AS Financial Statements

Opinion

We have audited the accompanying Ind AS financial statements of MUDRA FINANCIALSERVICES LIMITED ("the Company") which comprise the Balance Sheet as at March312020 and the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and notes to the financial statements including a summary of significant accountingpolicies (hereinafter referred to as the "the Ind AS financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 312020 and the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with the ethicalrequirements that are relevant to our audit of the Ind AS financial statements under theprovisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on the Ind AS financial statements.

Emphasis of Matter

We draw attention to Note No. 43 to the Financial Statements of the Company whereinfinancial impact of COVID-19 on the operations of the Company has been disclosed. Furtherthe extent to which the COVID -19 pandemic will impact the Company's financial performanceis dependent on future developments which are highly uncertain.

Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

Description Auditor's Response
As at the year end the Company has granted loans of '68300000/-. Management estimates impairment provision using specific approach method. We have reported this as a key audit matter because measurement of loan impairment involves application of significant judgement by the management. The most significant judgements are : Principal audit procedures performed: Management's judgement applied for the key assumptions used for the purpose of determination of impairment provision
Timely identification of the impaired loans Key assumptions in respect of determination of probability of defaults and loss given defaults. For loans identified by management as potentially impaired examined on a test check basis calculation of the impairment critically assessed the underlying assumptions and corroborated these to supporting evidence.

Other information

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Board's Report including Annexuresto Board's Report but does not include the Ind AS financial statements and our auditor'sreport thereon.

Our opinion on the Ind AS financial statements does not cover the other information andwe will not express any form of assurance conclusion thereon.

In connection with our audit of the Ind AS financial statements our responsibility isto read the other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the Ind ASfinancial statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.

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.

Management's Responsibility for the Ind AS 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 Ind AS financial statementsthat give a true and fair view of the financial position financial performance totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.

In preparing the Ind AS financial statements management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud 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 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 Ind AS 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 todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by 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 Ind AS financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

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

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the Ind AS financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

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 of the Companies Act 2013 we give in the"Annexure A" a statement on the matters

specified in paragraphs 3 and 4 of the Order to the extent applicable.

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 of the aforesaidInd AS financial statements.

b) In our opinion proper books of account as required by law relating to preparationof the aforesaid Ind AS financial statements have been kept by the Company so far as itappears from our examination of those books.

c) The company does not have any branches. Hence the provisions of section 143(3)(c)is not applicable.

d) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Statement of Changes in Equity and the Statement of Cash Flow dealt with bythis Report are in agreement with the books of account.

e) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

f) On the basis of the written representations received from the directors as on March312020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312020 from being appointed as a director in terms of Section 164 (2) of theAct.

g) With respect to adequacy of internal financial controls over financial reporting ofthe Company and the operating effectiveness of such controls refer to our separate reportin "Annexure B"

h) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:

In our opinion and to the best of our information and according to the explanationsgiven to us remuneration paid by the company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

i) In our opinion and to the best of our information and according to the explanationsgiven to us we report as under with respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 in our opinion and to the best of our information and according to the explanationsgiven to us:

(i) The Company has disclosed the impact of pending litigations on its financialposition as referred to Note 31 to the Ind AS financial statement.

(ii) The Company did not have any long-term contracts including derivative contracts;as such the question of commenting on any material foreseeable losses thereon does notarise.

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

For Sampat Mehta & Associates Chartered Accountants F.R. No. 109038W

Trushit Shah Partner M. No.148777

UDIN: 20148777AAAACQ6298

Place : Mumbai Date : 27th June 2020

Re: MUDRA FINANCIAL SERVICES LIMITED Annexure ‘A' to the Independent Auditors'Report

(Referred to in paragraph 9 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

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

fixed assets.

(b) All the 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. As informed to usno material discrepancies have been noticed upon such verification.

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

ii. The inventory has been verified during the year by the management with Dematstatements and no material discrepancies have been noticed upon such verification.

iii. The Company has not granted any loan secured or unsecured to Companies FirmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provisions of Clause 3 (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the Company.

iv. According to the information and explanation given to us the company has notgranted any loans or made any investments or provided any guarantees or given anysecurity in respect of which provisions of sections 185 and 186 of the Companies Act 2013are applicable.

v. The Company being NBFC the provisions of Sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the rules framed there under are not applicableto the company. Hence the provisions of Clause (v) of Paragraph 3 of the Companies(Auditor's Report) Order 2016 is not applicable to the Company.

vi. The Central Government has not prescribed maintenance of Cost records undersub-section (1) of section 148 of the Act in respect of the activities carried on by thecompany.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of our records of the

Company in respect of undisputed statutory dues including provident fund employees'state insurance income tax wealth tax sales tax Goods and service tax service taxduty of customs duty of excise value added tax cess and any other statutory dues havegenerally been regularly deposited with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues were in arrears as at March 312020 for a periodof more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofincome tax sales tax or service tax customs duty excise duty or value added tax notbeen deposited on account of any dispute except for the following:

Name of Statue Nature of Demand Period to which it relates Amount of dispute Forum where dispute is pending
Income Tax Act 1961 Income Tax FY 2014-15 540750/- Appellate Tribunal

viii. The Company has not taken any loan from financial institutions or banks duringthe year; hence the provisions of clause (viii) of paragraph 3 of Companies (Auditor'sReport) Order 2016 are not applicable to the Company.

ix. The Company has not raised money by way of initial public offer or further publicoffer (including debt instruments) and has not taken any term loans during the year hencethe provisions of clause (ix) of paragraph 3 of Companies (Auditor's Report) Order 2016are not applicable to the Company.

x. Based on the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and as per the information and explanations givenno fraud on or by the Company by its officers or employees has been

noticed or reported during the course of audit.

xi. In our opinion and according to the information and explanations given to usmanagerial remuneration paid or provided by the Company is in accordance with section 197read with Schedule V of the Act.

xii. As the company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it therefore the provisions of clause (xii) of paragraph 3 of Companies (Auditor'sReport) Order 2016 are not applicable to the Company.

xiii. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Act where applicable for alltransactions with the related parties and the details of related party transactions havebeen disclosed in the financial statements etc. as required by the applicable IndianAccounting standard.

xiv. According to the information and explanations given to us and based on the recordsand documents produced before us the company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year.

xv. According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him hencethe provisions of clause (xv) of paragraph 3 of Companies (Auditor's Report) Order 2016are not applicable to the Company.

xvi. The Company is registered under section 45-IA of the Reserve Bank of India Act1934.

For Sampat Mehta & Associates

Chartered Accountants

F.R. No. 109038W

Trushit Shah

Partner

M. No.148777

UDIN: 20148777AAAACQ6298

Place : Mumbai

Date : 27th June 2020

Re: MUDRA FINANCIAL SERVICES LIMITED Annexure - ‘B' to the Auditors' Report

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

We have audited the internal financial controls over financial reporting of "MUDRAFINANCIAL SERVICES LIMITED" ("the Company") as of March 312020 inconjunction with our audit of the 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 (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

Auditors' 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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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 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 judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that

(1) pertain to the maintenance 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 authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For Sampat Mehta & Associates Chartered Accountants F.R. No. 109038W

Trushit Shah Partner M. No.148777

UDIN: 20148777AAAACQ6298

Place : Mumbai Date : 27th June 2020

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