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Niyogin Fintech Ltd.

BSE: 538772 Sector: Financials
NSE: N.A. ISIN Code: INE480D01010
BSE 00:00 | 02 Mar 69.75 -3.65
(-4.97%)
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73.00

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73.00

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69.75

NSE 05:30 | 01 Jan Niyogin Fintech Ltd
OPEN 73.00
PREVIOUS CLOSE 73.40
VOLUME 6731
52-Week high 96.35
52-Week low 21.80
P/E
Mkt Cap.(Rs cr) 652
Buy Price 69.85
Buy Qty 1.00
Sell Price 69.75
Sell Qty 1600.00
OPEN 73.00
CLOSE 73.40
VOLUME 6731
52-Week high 96.35
52-Week low 21.80
P/E
Mkt Cap.(Rs cr) 652
Buy Price 69.85
Buy Qty 1.00
Sell Price 69.75
Sell Qty 1600.00

Niyogin Fintech Ltd. (NIYOGINFINTECH) - Auditors Report

Company auditors report

To the Members of

Niyogin Fintech Limited

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Niyogin Fintech Limited (formerlyknown as M3 Global Finance Limited) (the "Company") which comprise the balancesheet as at 31 March 2019 the statement of profit and loss and the statement of cashflows for the year then ended and notes to the financial statements including a summaryof the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid 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 accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2019 loss and its cash flows for the yearended on that date.

Basis for opinion

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 arefurther described in the Auditor's Responsibilities for the Audit of the 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 financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Key audit matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

Key audit matter How the matter was addressed in our audit
Identification of Non-performing assets ("NPA") and adequacy of provisions
Gross NPAs: Rs. 93.54 lac at 31 March 2019
Charge: Rs. 56.48 lac for year ended 31 March 2019
Closing Provisions for NPAs: Rs. 56.48 at 31 March 2019
Refer to the accounting policies in the financial statements: Significant Accounting Policies 2(ii) – Use of Estimates 2(x) – provisioning for NPAs" "Note 11 to the financial statements: Long term loans and advances" and "Note: 5 to the financial statement: Long term provisions"
Significant area of estimate and judgment with manual processes to identify NPAs Our key audit procedures included:
Design / controls
Identification of NPA's is undertaken in accordance with the Prudential Norms on Income Recognition Asset Classification & Provisioning. Provisions in respect of non-performing advances (provisioning on loans and advances) are made based on management's assessment of the degree of impairment of the advances subject to the minimum provisioning levels prescribed under RBI guidelines with regard to the Prudential Norms on Income Recognition Asset Classification & Provisioning prescribed from time to time as applicable to NBFCs and as per polices approved by the Board of Directors of the Company. • Assessing the design implementation and operating effectiveness of key internal controls over monitoring process of recoverability of loans timely identification of NPA accounts assessment and quantification of provisions and assessing the reliability of management information including overdue reports.
• Testing of management's controls over application of the Company's NPA provision policy.
We have identified NPA identification and provision as a key audit matter because – Substantive tests
1) It is an area which involves significant management judgement; • Test of details over of calculation of NPA provisions as at 31 March 2019 for assessing the completeness accuracy and relevance of data and to ensure that the same is in compliance with RBI guidelines with regard to the Prudential Norms on Income Recognition Asset Classification & Provisioning.
2) The Company uses manual processes to identify overdue status and tagging of NPAs. • Test of details over appropriate application of accounting principles and validating completeness and accuracy of the data used in the identification of NPA's and measurement of provision amounts.

Other information

The Company's management and the Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sAnnual Report but does not include the financial statements and our auditor's reportthereon. The other information is expected to be made available to us after the date ofthis auditor's report.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe 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.

Management's responsibility for the financial statements

The Company's management and the 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 state of affairs profit / loss and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Accounting Standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe 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 the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements management and the Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative 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 financial statements

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 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 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 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 Act we are also responsible for expressing our opinion on whether the Companyhas adequate internal financial controls with reference to the financial statements inplace and the operating effectiveness 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• 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.

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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen 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 2016 (the "Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

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

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.

c) The balance sheet the statement of profit and loss and the statement of cash flowsdealt with by this Report 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 the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of Section164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tothe financial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 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 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 financial statements regarding holdings as well as dealingsin specified bank notes during the period from 8 November 2016 to 30 December 2016 havenot been made in these financial statements since they do not pertain to the financialyear ended 31 March 2019.

(C) With respect to the matter to be included in the Auditor's Report under section 197(16):

In our opinion and according to the information and explanation given to us during thecurrent year the remuneration paid by the Company to its directors is in accordance withthe provisions of Section 197 read with Schedule V of the Act. The remuneration paid toany director is not in excess of the limit laid down under Section 197 read with ScheduleV of the Act. The Ministry of Corporate Affairs has not prescribed other details underSection 197 (16) which are required to be commented upon by us.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Sd/-
Sameer Mota
Mumbai Partner
22 May 2019 Membership No: 109928

Report of even date on financial statements of Niyogin Fintech Limited

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

b. The Company has a regular program of physical verification of its fixed assets bywhich all the fixed assets are verified at the end of the financial year. In our opinionthis periodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. According to the information and explanation givento us no material discrepancies were noticed on such verification.

c. The Company does not have any immovable property held in its name. Accordingly theprovision of clause 3(i)(c) of the Order is not applicable to the Company.

(ii) The Company is in the business of providing lending services and does not hold anyphysical inventories. Accordingly the provision of clause 3(ii) of the Order is notapplicable to the Company.

(iii) 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 theAct. Accordingly the provision of clause 3(iii) of the Order is not applicable to theCompany.

(iv) According to the information and explanations given to us the Company has notgranted any loans made investments or provided guarantees under section 185 and 186 ofthe Act. Accordingly the provision of clause 3(iv) of the Order is not applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public to which the directives issued by Reserve Bank ofIndia and the provisions of Section 73 to Section 76 or any other relevant provisions ofthe Act and the rules framed there under apply. Accordingly clause 3(iv) of the Order isnot applicable to the Company.

(vi) The Central Government has not prescribed the maintenance of cost records undersub section (1) of section 148 of the Act for any of the services rendered by the Company.Accordingly the provision of clause 3(vi) of the Order is not applicable.

(vii) a) According to the information and explanations given to us and on the basis ofour examination of records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income-taxgoods and service tax cess and other material statutory dues have generally beenregularly deposited by the Company with the appropriate authorities though there have beendelays in a few cases pertaining to income-tax. As explained to us the Company did nothave any dues on account of employees' state insurance sales-tax duty of customs dutyof excise and value added tax.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income-tax goods and service tax cess and othermaterial statutory dues were in arrears as at 31 March 2019 for a period of more than sixmonths from the date they became payable.

b) According to the information and explanations given to us the Company did not haveany dues on account of income-tax goods and service tax service tax which have not beendeposited on account of dispute.

(viii) In our opinion and according to the information and explanations given to usthe Company did not have any have any loans or borrowings from financial institutionsbanks government or debenture holders during the year. Accordingly clause 3(viii) of theOrder is not applicable to the Company.

(ix) According to the information and explanations given to us the Company has notraised moneys by way of initial public offer or further public offer and term loans duringthe year. Accordingly clause 3(ix) of the Order is not applicable to the Company.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the explanation and information given to us no material fraud by the Companyor on the Company by its officers or employees has been noticed or reported during theyear.

(xi) According to the information and explanations give 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 the provision of clause 3(xii) of the Orderis not applicable.

(xiii) According to the information and explanations given to us and on the basis ofour examination of the records of the Company transactions with the related parties arein compliance with section 177 and 188 of the Act where applicable and the details havebeen disclosed in the financial statements as required by the applicable accountingstandards.

(xiv) According to the information and explanations given 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. Accordingly the provision of clause 3(xiv) of the Order is not applicable.

(xv) According to the information and explanations given to us and based on ourexamination of the records the Company has not entered into any non-cash transactionswith directors or persons connected with him during the year. Accordingly clause 3(xv) ofthe Order is not applicable to the Company.

(xvi) The Company is required to be registered under section 45-IA of the Reserve Bankof India Act 1934 and it has obtained certificate of registration dated 30 December 2013.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Sd/-
Sameer Mota
Mumbai Partner
22 May 2019 Membership No: 109928

Annexure B to the Independent Auditor's

Report on the financial statements of Niyogin Fintech Limited for the year ended 31March 2019

Report on the internal financial controls with reference to the aforesaid financialstatements under Clause (i) of Subsection 3 of Section 143 of the Companies Act 2013

(Referred to in paragraph 2(A)(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date) Opinion

We have audited the internal financial controls with reference to the financial statements of Niyogin Fintech Limited (the "Company") as of 31 March 2019 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to the financial statements and such internal financial controlswere operating effectively as at 31 March 2019 based on the internal financial controlswith reference to the financial statements 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 (the "Guidance Note").

Management's responsibility for internal financial controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to the financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. 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 (hereinafter referred to as the"Act").

Auditor's responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to the financial statements based on our audit. We conducted ouraudit in accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143 (10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to the financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to the financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference to thefinancial statements included obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material 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 withreference to the financial statements.

Meaning of internal financial controls with reference to the financial statements

A company's internal financial controls with reference to the financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of the financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrols with reference to the financial statements include those policies and proceduresthat (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) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent limitations of internal financial controls with reference to the financialstatements

Because of the inherent limitations of internal financial controls with reference tothe financial 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 withreference to the financial statements to future periods are subject to the risk that theinternal financial controls with reference to the financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Sd/-
Sameer Mota
Mumbai Partner
22 May 2019 Membership No: 109928

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