To the Members of Supra Pacific Management Consultancy Limited Report on the Audit ofthe Financial Statements
We have audited the accompanying financial statements of Supra Pacific ManagementConsultancy Limited (the "Company") which comprise the Balance Sheet as at 31March 2021 and the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Cash Flows and the Statement of Changes in Equity for the year thenended and a summary of 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 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 31 March 2021 and its profit total comprehensiveincome its cash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing specified under section 143(10) of the Act (SAs). Our responsibilities underthose Standards are further described in the Auditor's Responsibility for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules made thereunder and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the ICAI's Code of Ethics. We believe that the audit evidence obtained by us issufficient and appropriate to provide a basis for our audit opinion on the financialstatements.
Key Audit Matter
Key audit matter is a matter that in our professional judgment were of mostsignificance in our audit of the financial statements of the current year. 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. Wehave determined the matters described below to be the key audit matter to be communicatedin our report.
|Key Audit Matter ||Auditor's Response |
|Impairment of carrying value of loans and advances: ||Principal audit procedures performed: |
|Management estimates impairment provision using Expected Credit loss model (ECL) for the loan exposure. Measurement of loan impairment involves application of significant judgement by the management. The most significant judgements are: ||We examined Board Policy approving methodologies for computation of ECL that address policies procedures and controls for assessing and measuring credit risk on all lending exposures commensurate with the size complexity and risk profile specific to the Company. The parameters and assumptions used and their rationale and basis are clearly documented. |
| Timely identification and classification of the impaired loans and ||We evaluated the design and operating effectiveness of controls across the processes relevant to determination of ECL including the judgements and estimates. |
| Determination of probability of defaults (PD) and estimation of loss given defaults (LGD) based on the value of collaterals and relevant factors ||These controls among others included controls over the allocation of assets into stages including management's monitoring of stage effectiveness model monitoring including the need for post model adjustments model validation credit monitoring individual provisions and production of journal entries and disclosures. |
|The Company started retail lending activities in Financial Year 2020-21. The Company doesn't have credit loss history and has assigned PD to each borrower on the basis of the Company's internal rating model on various rating agencies' database and LGD are based on based on the value of collaterals and relevant factors. ||We tested the completeness of loans and advances included in the Expected Credit Loss calculations as of 31 March 2021 by reconciling it with the balances as per loan balance register as on that date. |
|The estimation of Expected Credit Loss (ECL) on financial instruments involve significant judgements and estimates. Following are points with increased level of audit focus: ||We tested assets in stage 1 2 and 3 on sample basis to verify that they were allocated to the appropriate stage. |
| Classification of assets to stage 1 2 or 3 using criteria in accordance with Ind AS 109; ||For samples of exposure we tested the appropriateness of determining Exposure at Default (EAD) PD and LGD. |
| Accounting interpretations and data used to build and run the models; ||For exposure determined to be individually impaired we tested a samples of loans and advances and examined management's estimate of future cash flows assessed their reasonableness and checked the resultant provision calculations. |
| Inputs and Judgements used in determination of management overlay at various asset stages considering the current uncertain economic environment with the range of possible effects unknown to the country; ||For forward looking assumptions used in ECL calculations we held discussions with management assessed the assumptions used and the probability weights assigned to the possible outcomes. |
| The disclosures made in financial statements for ECL especially in relation to judgements and estimates by the Management in determination of the ECL. ||We performed an overall assessment of the ECL provision including management's assessment on Covid-19 impact to determine if they were reasonable considering the Company's portfolio risk profile credit risk management practices and the macro economic environment. |
| ||We assessed the adequacy and appropriateness of disclosures in compliance with the Ind AS 107 in relation to ECL especially in relation to judgements used in estimation of ECL provision. |
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the management report but does notinclude the financial statements and our auditor's report thereon. The Annual report isexpected to be made available to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the other information andwe do not and will not express any form of assurance conclusion thereon.
In connection with our audit of the 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 financialstatements or our knowledge obtained during the course of our audit or otherwise appearsto be materially misstated.
When we read the management report if we conclude that there is a materialmisstatement therein we are required to communicate the matters to those charged withgovernance as required under SA 720 The Auditor's responsibilities Relating to OtherInformation.
Management's Responsibility for the 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 financial statements that givea true and fair view of the financial position financial performance including othercomprehensive income cash flows and changes in equity 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 financial statement that givea true and fair view and are free from material misstatement whether due to Iraud orerror.
In preparing the financial statements management is responsible for assessing theCompany'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.
Those Board of Directors are also responsible for overseeing the Company's financialreporting process. Auditor's Responsibility 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 financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany 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 the 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.
Obtain sufficient appropriate audit evidence regarding the financial informationof the Company to express an opinion on the financial statements.
Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the 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 the 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 financial statements of thecurrent year and are therefore the key audit matter. 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.
The audit of the financial statements of the Company for the year ended 31 March 2020was carried out by the predecessor auditor. The report of the predecessor auditor on thecomparative financial statements dated 29 June 2020 expressed an unmodified opinion.
Our opinion on the financial statements is not modified in respect of the above matteron the comparative financial information.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit 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 including Other ComprehensiveIncome the Statement of Cash Flows and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.
d. In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act.
e. On the basis of the written representations received from the directors and taken onrecord by the Board of Directors none of the directors is disqualified as on 31 March2021 from being appointed as a director in terms of Section 164(2) of the Act.
f. With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
g. With respect to the other matter to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.
h. 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 as amended inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on its financialposition 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 were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
2. 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"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
| ||For DELOITTE HASKINS & SELLS |
| ||Chartered Accountants |
| ||(Firm's Registration No.008072S) |
| ||G. K. Subramaniam |
| ||Partner |
| ||Membership No.109839 |
|MUMBAI June 28 2021 ||(UDIN: 21109839AAAAIY8481) |
ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1(f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 (the "Act")
We have audited the internal financial controls over financial reporting of SupraPacific Management Consultancy Limited (the "Company") as of March 31 2021 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 (the "Guidance Note").These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company 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. 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 judgement 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 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 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.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2021 based on the criteria forinternal financial control over financial reporting established by the Company consideringthe essential components of internal control stated in the Guidance Note.
ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 2 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 property plant and equipment.
(b) The property plant and equipment were physically verified during the year by themanagement in accordance with a regular program of verification which in our opinionprovides for physical verification of all the fixed assets at reasonable intervals.According to the information and explanations given to us no material discrepancies werenoticed on such verification.
(c) In respect of immovable properties of land and buildings that have been taken onlease and disclosed as Right of Use asset in the financial statements the leaseagreements are in the name of the Company where the Company is the lessee in theagreement.
(ii) The Company does not have any inventory and hence reporting under clause 3(ii) ofthe Order is not applicable.
(iii) According to the information and explanations given to us the Company hasgranted loans secured or unsecured to companies firms Limited Liability Partnershipsor other parties covered in the register maintained under section 189 of the CompaniesAct 2013 in respect of which:
(a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company's interest.
(b) The schedule of repayment of principal and payment of interest has been stipulated.However the repayment schedule has not been started as on the balance sheet date.
(iv) In our opinion and according to the information and explanations given to us theCompany has not granted any loans or provided any guarantee or security to any director ofthe Company and hence the provisions of Section 185 of the Act is not applicable to theCompany. The Company has complied with the provisions of Section 186 as applicable.
(v) To the best of our knowledge and according to the information and explanationsgiven to us the Company has not accepted any deposit during the year and no order inrespect has been passed by the Company Law Board or National Company Law Tribunal or theReserve Bank of India or any Court or any other Tribunals with regard to the Company
(vi) Having regard to the nature of the Company's business / activities reportingunder clause (vi) of the Order is not applicable.
(vii) According to the information and explanations given to us in respect of statutorydues:
(a) The Company has generally been regular in depositing undisputed statutory duesincluding Income Tax Goods and Service Tax Cess and other material statutory dues whereapplicable to it with the appropriate authorities.
(b) there were no undisputed amounts payable in respect of Income-tax Goods andService Tax cess and other material statutory dues in arrears as at 31 March 2021 for aperiod of more than six months from the date they became payable except for the duesreferred to below:
|Particulars ||Assessment Year ||Amount (Rs.) |
|Income tax (Self-Assessment Tax) ||2015-16 ||710490/- |
(c) There are no dues of Income Tax Goods and Service Tax cess and other materialstatutory dues as on 31 March 2021 on account of disputes except for the dues referred tobelow:
|Particulars ||Assessment Year ||Amount (Rs.) ||Name of the Authorities |
|Income tax (SelfAssessment Tax) ||2016-17 ||2490761/- ||Lok Adalat |
(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of dues to debenture holders. The Companydoes not have loans or borrowings from to banks financial institutions and government.
(ix) In our opinion and according to the information and explanations given to us thefunds raised through non-convertible debentures issued during the year have been appliedby the Company for the purposes for which they were raised. The Company has not raisedmoneys by way of initial public offer or further public offer.
(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no material fraud on the Company by its officersor employees has been noticed or reported during the year.
(xi) To the best of our knowledge and according to the information and explanationsgiven to us the Company has paid / provided managerial remuneration in accordance withthe requisite approvals mandated by the provisions of section 197 read with Schedule V tothe Act.
(xii) The Company is not a Nidhi Company and hence reporting under clause 3(xii) of theOrder is not applicable.
(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 accountingstandards.
(xiv) According to the information and explanations given to us the Company has notmade private placement of shares. The Company has made private placement ofnon-convertible debentures during the year.
In respect of the above issue we further report that:
a) the requirement of Section 42 of the Act as applicable have been complied with;and
b) the amounts raised have been applied by the Company during the year for the purposesfor which the funds were raised other than temporary deployment pending application offunds.
(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into non-cash transactions with its directorsor persons connected with the directors and hence provisions of section 192 of the Act arenot applicable.
(xvi) In our opinion and according to the information and explanation given to us wereport that the Company has registered as required under section 45-IA of the ReserveBank of India Act 1934.
| ||For DELOITTE HASKINS & SELLS |
| ||Chartered Accountants |
| ||(Firm's Registration No.008072S) |
| ||G. K. Subramaniam |
| ||Partner |
| ||Membership No.109839 |
|MUMBAI June 28 2021 ||(UDIN: 21109839AAAAIY8481) |