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Mudra Financial Services Ltd.

BSE: 539819 Sector: Financials
NSE: N.A. ISIN Code: INE967S01014
BSE 00:00 | 13 Dec Mudra Financial Services Ltd
NSE 05:30 | 01 Jan Mudra Financial Services Ltd
OPEN 4.04
PREVIOUS CLOSE 4.04
VOLUME 10
52-Week high 4.04
52-Week low 0.00
P/E 14.43
Mkt Cap.(Rs cr) 2
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 4.04
CLOSE 4.04
VOLUME 10
52-Week high 4.04
52-Week low 0.00
P/E 14.43
Mkt Cap.(Rs cr) 2
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Mudra Financial Services Ltd. (MUDRAFINSER) - Auditors Report

Company auditors report

TO THE MEMBERS OF

MUDRA FINANCIAL SERVICES LIMITED

Report on the Audit of the Ind AS Financial Statements

Opinion

We have audited theaccompanying Ind AS financial statements of MUDRA FINANCIAL SERVICESLIMITED("the Company") which comprise the Balance Sheet as at March 312022 andthe Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaidInd AS financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 312022 andthe profit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Ind AS FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the Ind AS financial statementsunder the provisions of the Act and the Rules made thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion on theInd 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 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'78600000/-. 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:
• Timely identification of the impaired loans • Management's judgement applied for the key assumptions used for the purpose of determination of impairment provision
• 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 forthe other information. The otherinformation comprises the Director's Report including Annexures to Director's Report butdoes not include the Ind AS financial statements and our auditor's report thereon.

Our opinion on the Ind AS financial statements does not cover the other information andwe do 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.

Responsibilities of Management and those charged with Governance for the Ind ASFinancial 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 theseInd AS financial statements thatgive 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 theInd ASfinancial statements the Board of Directors 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 unlessthe Board of Directors either intends to liquidate the Company or to cease operations orhas no realistic alternative but to do so.

Those 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 theInd 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 aggregatemakes it probable that the economic decisions of a reasonablyknowledgeable user of the Ind AS financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in theInd 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

1. As required by the Companies (Auditor's Report) Order 2020 ("the Order')issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and 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)isnot 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) In our opinion there were no financial transactions or matters which have anyadverse effect on the functioning of the company.

g) On the basis of the written representations received from the directors as on March312022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 312022 from being appointed as a director in terms of Section 164 (2) of theAct.

h) There is no adverse remark relating to the maintenance of accounts and other mattersconnected therewith.

i) 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'

j) 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 27 to the Ind AS financial statements.

(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.

(iv) (a) The Management has represented that to the best of its knowledge and beliefno funds (which are material either individually or in the aggregate) have been advancedor loaned or invested (either from borrowed funds or share premium or any other sources orkind of funds) by the Company to or in any other person or entity including foreignentity ("Intermediaries") with the understanding whether recorded in writingor otherwise that the Intermediary shall whether directly or indirectly lend or investin other persons or entities identified in any manner whatsoever by or on behalf of theCompany ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries;

(b) The Management has represented that to the best of its knowledge and belief nofunds (which are material either individually or in the aggregate) have been received bythe Company from any person or entity including foreign entity ("FundingParties") with the understanding whether recorded in writing or otherwise that theCompany shall whether directly or indirectly lend or invest in other persons orentities identified in any manner whatsoever by or on behalf of the Funding Party("Ultimate Beneficiaries") or provide any guarantee security or the like onbehalf of the Ultimate Beneficiaries;

(c) Based on the audit procedures that have been considered reasonable and appropriatein the circumstances nothing has come to our notice that has caused us to believe thatthe representations under sub-clause (i) and (ii) of Rule 11(e) as provided under (a) and(b) above contain any material misstatement.

(v) The Company has not proposed declared or paid any dividend during the year andhence compliance with Section 123 of the Act is not applicable for the year.

3. 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 the remuneration paid by the company to its directors during the year is inaccordance with the provisions of section 197 of the Act.

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) A. The company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.

B. The company does not have any intangible assets. Accordingly reporting under clause3 (i) (a) (B) of the Order is not applicable to the Company.

(b) Property Plant and Equipment have been physically verified by the management atregular intervals. No material discrepancies were noticed on such physical verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the company in the case of loans given in our opinion therepayment of principal and payment of interest has been stipulated and the repayments orreceipts have been regular. Further the company has not given any advance in the natureof loan to any party during the year.

(d) According to the information and explanations given to us and on the basis of ourexamination of the records of the company there is no overdue amount for more than ninetydays in respect of the Loans given. Further the company has not given any advances in thenature of loans to any party during the year

(e) Since the Company's principal business is to give loans. Accordingly the provisionof clause 3(iii)(e) of the Order is not applicable to it.

(f) According to the information and explanation made available to us the Company hasgranted loans which are repayable on demand and those are 100% of the total loans granted.Further the company has not granted any loans to promoters or related parties as definedin clause (76) of section 2 of the Companies Act 2013.

iv. According to the information and explanation given to us during the year thecompany has not granted any loans or provided any guarantees or given any securityto theparties covered under section 185 of Companies Act 2013.The Company has complied with theprovisions of section 186 of the Act to the extent applicable.

v. In our opinion and according to the information and explanations given to us theCompany being a non-banking financial company registered with the Reserve Bank of Indiathe provisions of sections 73 to 76 or any other relevant provisions of the Act and theCompanies (Acceptance of Deposits) Rules 2014 as amended with regard to the deposits aswell as deemed deposits accepted are not applicable to the Company. We are informed by theManagement that no order has been passed by the Company Law Board National Company LawTribunal or Reserve Bank of India or any Court or any other Tribunal on the Company inrespect of the aforesaid deposits.

vi. The Central Government has not prescribed the maintenance of cost records undersub-section (1) section 148 of the Act for the business activities carried out by theCompany. Accordingly the provision of clause 3(vi) of the Order is not applicable to theCompany.

vii. (a) According to the information and explanation given to us and on the basis ofour examination of the records of the Company in respect of undisputed statutory duesincluding Goods and Services Tax provident fund employees' state insurance income-taxsales-tax service tax duty of customs duty of excise value added tax cess and anyother statutory dueshave generally been regularly deposited with the appropriateauthorities.

According to the information and explanations given to us no undisputed amountspayable in respect of the aforesaid dues were in arrears as at March 312022 for a periodof more than six months from the date they became payable.

(b) According to the books of accounts and records as produced and examined by us inaccordance with the generally accepted auditing practices in India as at March 312022the following are the particulars of the dues that have not been deposited on the accountof dispute:

Sr. Name of the no. Statute Nature of the Dues Amount (Rs. in 000's ) Forum where dispute is pending Period to which the amount relates
1 Income Tax Act 1961 Income Tax 540.75 Appellate Tribunal A.Y. 2014-15

viii. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not surrendered or disclosedany transactions previously unrecorded as income in the books of account in the taxassessments under the Income Tax Act 1961 as income during the year.

ix. The Company has not taken any loan from financial institutions or banks during theyear; Accordingly the provision of clause 3(ix) (a) to (f) of the Order is not applicableto the Company.

x. (a) According to the information and explanations given to us and based on therecords and documents produced before us during the year the company has not raised moneyby way of initial public offer or further public offer (including debt instruments)therefore the provisions of Clause 3(x)(a) of the Order are not applicable to theCompany.

(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or convertible debentures (fully partially oroptionally convertible) during the year. Accordingly clause 3(x)(b) of the Order is notapplicable to the Company.

xi. (a) Based on examination of the books and records of the Company and according tothe information and explanations given to us considering the principles of materiality asoutlined in the Standards on Auditing we report that no fraud by the Company or on theCompany has been noticed or reported during the course of the audit.

(b) According to the information and explanations given to us no report under Section143(12) of the Act has been filed by the auditors in Form ADT-4 as prescribed under rule13 of Companies (Audit and Auditors) Rules 2014 with the Central Government.

(c) To the best of our knowledge and according to the information and explanation givento us the company has not received whistle-blower complaints during the year.

xii. As the company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it therefore the provisions of clause 3(xii) (a) to 3(xii) (c) of the Order is notapplicable to the company.

xiii. According to the information and explanation given to us all transactions withthe related parties are in compliance with Sections 177 and 188 of the Act. The details ofsuch related party transactions have been disclosed in the financial statements asrequired under Indian Accounting Standard (Ind AS) 24 Related Party Disclosures specifiedunder Section 133 of the Act.

xiv (a) In our opinion and according to the information and explanation given to usthe Company has an internal audit system commensurate with the size and nature of itsbusiness.

(b) We have considered the internal audit reports of the company issued till date forthe period under audit.

xv. According to the information and explanations given to us during the year thecompany has not entered into any noncash transactions with its directors or personsconnected with its directors and hence provisions of section 192 of the Companies Act2013 are not applicable to the Company.

xvi (a) The Company is required to be registered under section 45-IA of the ReserveBank of India Act 1934 and the Company has obtained the required registration.

(b) According to the information and explanations given to us the Company has notconducted any Non-Banking Financial or Housing Finance activities without obtaining avalid Certificate of Registration (CoR) from the Reserve Bank of India as per the ReserveBank of India Act 1934.

(c) The Company is not a Core Investment Company (CIC) as defined in the regulationsmade by the Reserve Bank of India. Accordingly the reporting under Clause 3(xvi)(c) ofthe Order is not applicable to the Company.

(d) Based on the information and explanations provided by the management of theCompany during the course of audit the Company (as per the provisions of the CoreInvestment Companies (Reserve Bank) Directions 2016) does not have any CIC.

xvii. The Company has not incurred any cash losses in the financial year or in theimmediately preceding financial year.

xvii. There has been no resignation of the statutory auditors during the year.Accordingly clause 3(xviii) of the order is not applicable to the Company.

xix. According to the information and explanations given to us and on the basis of thefinancial ratios ageing and expected dates of realisation of financial assets and paymentof financial liabilities other information accompanying the Ind AS financial statementsour knowledge of the Board of Directors and management plans and based on our examinationof the evidence supporting the assumptions nothing has come to our attention whichcauses us to believe that any material uncertainty exists as on the date of the auditreport that Company is not capable of meeting its liabilities existing at the date ofbalance sheet as and when they fall due within a period of one year from the balance sheetdate. We however state that this is not an assurance as to the future viability of theCompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the balance sheet date will get dischargedby the Company as and when they fall due.

xx. In our opinion and according to the information and explanations given to usSection 135 of the Companies Act 2013 is not applicable to the Company. Accordinglyclause 3(xx)(a) and (b) of the Order is not applicable to the Company.

xxi. The reporting under Clause 3(xxi) of the Order is not applicable in respect ofaudit of Standalone financial statements. Accordingly no comment in respect of the saidclause has been included in this report.

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 312022 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 312022 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.

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