We have audited the standalone financial statements of KJMC Financial
Services Limited. (“the Company”), which comprise the Balance Sheet
as at March 31 2025, 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 then ended and notes to the standalone
financial statements, including a summary of material accounting policies
and other explanatory information.
In our opinion and to the best of our information and according to the
explanations given to us, the aforesaid standalone financial statements
give the information required by the Companies Act,2013 (“Act”) in the
manner so required and give a true and fair view in conformity with
the accounting principles generally accepted in India, of the state of
affairs of the Company as at March 31, 2025, and its profit and other
comprehensive income, 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) specified under section 143(10) of the Companies Act, 2013.
Our responsibilities under those Standards are further described in the
Auditors' Responsibilities for the audit of the Financial Statements section
of our report.
We are independent of the Company in accordance with the Code of
Ethics issued by the Institute of Chartered Accountants of India together
with the ethical requirements that are relevant to our audit of the financial
statements under the provisions of the Companies Act, 2013 and the
Rules thereunder, and we have fulfilled our other ethical responsibilities in
accordance with these requirements and the Code of Ethics. We believe
that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment,
were of most significance in our audit of the financial statements of the
current period. These matters were addressed in the context of our audit
of the financial statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
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No.
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Key Audit Matter
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Auditors’ Response
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1
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Impairment of Investments
Where impairment indicators have been identified, the quantification
of impairment in the carrying value of investments is considered to
be a risk area due to the judgmental nature of key assumptions.
The estimated recoverable amount is subjective due to the inherent
uncertainty involved in forecasting and discounting future cash flows.
The most
significant judgements are:
• Timely identification of diminution in the value of investments.
• Proper estimation of fair market value in respect of listed and
unlisted investments
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Auditor’s Response
Tested the design and effectiveness of internal controls implemented
by the management for following:
• Identification of any diminution in the value of investments.
• Collection of relevant data to estimate the fair market value of
investments at the balance sheet date.
• To ascertain the sufficiency of amount of provision in case of
diminution in value of investments
• Management's judgement applied for the key assumptions used for
the purpose of determination of impairment provision.
• Completeness and accuracy of the data inputs used.
• We critically assessed and tested the key underlying assumptions
and significant judgements used by management.
• For investments identified by management as potentially impaired,
examined the same and checked the calculation of the impairment
• Examined the investments which had not been identified by
management as potentially impaired and formed our own
judgement as to whether that was appropriate through examining
available information
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2
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Impairment of financial assets as at the balance sheet (Expected
Credit Losses)
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Auditors Response
• Read and assessed the Company's accounting policies for
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Ind AS 109 requires the Company to provide for impairment of its
loan receivables (designated at amortized cost and fair value through
other comprehensive income) using the expected credit loss (ECL)
approach. ECL involves an estimation of probability weighted loss
on financial instruments over their life, considering reasonable and
supportable information about past events, current conditions, and
forecasts of future economic conditions which could impact the credit
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impairment of financial assets and their compliance with Ind AS
109
• Evaluated the reasonableness of the Management estimates
by understanding the process of ECL estimation and related
assumptions and tested the controls around data extraction and
validation.
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quality of the Company's loans and advances
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• Tested the ECL model, including assumptions and underlying
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In the process, a significant degree of judgment has been applied by
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computation.
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the Management for:
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• Assessed the floor/minimum rates of provisioning applied by the
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• Grouping of borrowers based on homogeneity by using appropriate
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Company for loan products with inadequate historical defaults.
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statistical techniques;
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• Tested assumptions used by the Management in determining the
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• Estimation of behavioral life;
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overlay for macro-economic factors.
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• Determining macro-economic factors impacting credit quality of
receivables;
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Assessed disclosures included in the standalone Ind AS financial
statements in respect of expected credit losses.
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Estimation of losses for loan products with no/minimal historical
defaults.
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Information other than the Financial Statements and Auditors’
Report thereon
The Company's Management and Board of Directors are responsible for
the other information. The other information comprises the information
included in the Annual Report, but does not include the financial
statements and our auditors' report thereon.
Our opinion on the financial statements does not cover the other
information and we do not express any form of assurance conclusion
thereon. In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so, consider
whether the other information is materially inconsistent with the financial
statements or our knowledge obtained in the audit or otherwise appears
to be materially misstated. If, based on the work we have performed, we
conclude that there is a material misstatement of this other information,
we are required to report that fact.
We have nothing to report in this regard.
Management’s Responsibility for the Standalone Financial
Statements
The Company's Management and Board of Directors are responsible
for the matters stated in section 134(5) of the Companies Act, 2013
(“the Act”) with respect to the preparation of these standalone financial
statements that give a true and fair view of the financial position,
financial performance, statement of changes in equity and cash flows
of the Company in accordance with the accounting principles generally
accepted in India, including the Indian Accounting Standards (Ind AS)
specified under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting
records in accordance with the provisions of the Act for safeguarding of
the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate accounting
policies; making judgments and estimates that are reasonable and
prudent; and design, implementation and maintenance of adequate
internal financial controls, that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the financial statement that give a true
and fair view and are free from material misstatement, whether due to
fraud or error.
In preparing these financial statements, Management and Board
of Directors are responsible for assessing the Company's ability to
continue as a going concern, disclosing, as applicable, matters related
to going concern and using the going concern basis of accounting
unless Management either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so. Those Board of
Directors are also responsible for overseeing the Company's financial
reporting process.
Auditors’ Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the
financial statements as a whole are free from material misstatement,
whether due to fraud or error, and to issue an auditors' report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with SAs will always
detect a material misstatement when it exists. Misstatements can arise
from fraud or error and are considered material if, individually or in the
aggregate, they could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, we exercise professional
judgment and maintain professional skepticism throughout the audit. We
also:
1. Identify and assess the risks of material misstatement of the financial
statements, whether due to fraud or error, design and perform audit
procedures responsive to those risks, and obtain audit evidence that
is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud
is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the
override of internal control.
2. Obtain an understanding of internal control relevant to the audit
in order to design 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 whether the
company has adequate internal financial controls system in place
and the operating effectiveness of such controls.
3. Evaluate the appropriateness of accounting policies used and the
reasonableness of accounting estimates and related disclosures
made by Management.
4. Conclude on the appropriateness of Management's use of the going
concern basis of accounting and, based on the audit evidence
obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Company's
ability to continue as a going concern. If we conclude that a material
uncertainty exists, we are required to draw attention in our auditors'
report to the related disclosures in the 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
auditors' report. However, future events or conditions may cause the
Company to cease to continue as a going concern.
5. Evaluate the overall presentation, structure and content of the
financial statements, including the disclosures, and whether the
financial statements represent the underlying transactions and
events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements
that, individually or in aggregate, make it probable that the economic
decisions of a reasonably knowledgeable user of the financial statements
may be influenced. We consider quantitative materiality and qualitative
factors in (i) Planning the scope of our audit work and in evaluating
the results of our work; and (ii) To evaluate the effect of any identified
misstatements in the financial statements.
We communicate with those charged with governance of the company
regarding, among other matters, the planned scope and timing of the
audit and significant audit findings including any significant deficiencies in
internal control that we identify during our audit.
We also provide those charged with governance with a statement
that we have complied with relevant ethical requirements regarding
independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence,
and where applicable, related safeguards.
From the matters communicated with those charged with governance,
we determine those matters that were of most significance in the audit of
the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditors' report unless
law or regulation precludes public disclosure about the matter or when, in
extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing
so would reasonably be expected to outweigh the public interest benefits
of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors' Report) Order, 2020 (“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:
1. We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
2. In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination
of those books of accounts and the company has maintained daily
backup of such books in electronic mode, in a server physically
located in India except for the matters stated in the paragraph 2(B)
(f) below on reporting under Rule11 (g) of the Companies (Audit and
Auditors) Rules, 2014.
3. The Balance Sheet, the Statement of Profit and Loss (including other
Comprehensive Income), Statement of Changes in Equity and the
Cash Flow Statement dealt with by this Report are in agreement with
the books of accounts.
4. In our opinion, the aforesaid standalone financial statements
comply with the Indian Accounting Standards (Ind AS) specified
under Section 133 of the Act, read with Rule 7 of the Companies
(Accounts) Rules, 2014.
5. On the basis of the written representations received from the
directors as on 31st March, 2025 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March,
2025 from being appointed as a director in terms of Section 164 (2)
of the Act.
6. With respect to the adequacy of the internal financial controls over
financial reporting of the Company and the operating effectiveness
of such controls, refer to our separate Report in “Annexure B”.
7. The modifications relating to the maintenance of accounts and other
matters connected therewith are as stated in the paragraph 2A (2)
above on reporting under section 143(3)(b) of the Act and paragraph
2B(f) below on reporting under Rule 11(g) of the Companies (Audit
and Auditors) Rule, 2014.
8. With respect to the other matters to be included in the Auditor's
Report in accordance 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 explanations given to us, the remuneration paid
by the Company to its directors during the year is in accordance with
the provisions of Section 197 of the Act.
A. With respect to the other matters to be included in the Auditors'
Report in accordance with Rule 11 of the Companies (Audit
and Auditors) Rules, 2014, in our opinion and to the best of our
information and according to the explanations given to us:
a. The Company has disclosed the impact of pending
litigations on its financial position in its financial statements
b. The Company did not have any long-term contracts
including derivative contracts for which there were any
material foreseeable losses.
c. There were no amounts which were required to be
transferred to the Investor Education and Protection Fund
by the Company.
d. (i) The Management has represented that, to the best
of its knowledge and belief, as disclosed in the notes
to the accounts, no funds have been advanced or
loaned or invested (either from borrowed funds or
share premium or any other sources or kind of funds)
by the Company to or in any other person(s) or
entity(ies), including foreign entities (“Intermediaries”),
with the understanding, whether recorded in writing
or otherwise, that the Intermediary shall, directly or
indirectly lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf
of the Company (“Ultimate Beneficiaries”) or provide
any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.
(ii) The Management has represented, that, to the
best of its knowledge and belief, as disclosed in the
notes to accounts, no funds have been received
by the Company from any person(s) or entity(ies),
including foreign entities (“Funding Parties”), with
the understanding, whether recorded in writing
or otherwise, that the Company shall, directly or
indirectly, lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf
of the Funding Party (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like on behalf
of the Ultimate Beneficiaries.
(iii) Based on the audit procedures that has been
considered reasonable and appropriate in the
circumstances, nothing has come to our notice that
has caused us to believe that the representations
under sub clause (i) and (ii) of Rule 11(e), as provided
under d (i) and (ii) above, contain any material
misstatement.
e. The Company has not declared any dividend during the
current financial year ended March 31 ,2025
f. Proviso to Rule 3(1) of the Companies (Accounts) Rules,
2014 for maintaining books of account using accounting
software having an audit trail (edit log) facility is applicable
to the Company with effect from April 1, 2023.
Based on our examination which included test checks, except
for the instances mentioned below, the Company has used
accounting software for maintaining its books of account,
which have a feature of recording audit trail (edit log) facility
and the same has operated throughout the year for all relevant
transactions recorded in the respective software:
In the absence of any information on existence of audit trails
(edit logs) for changes made at the application level or database
level in the aforesaid systems, we are unable to comment on
whether the audit trail feature of the said systems/software was
enabled and operated throughout the year at those levels.
Further, for the periods where audit trails (edit logs) facility was
enabled for the respective software, we did not come across
any instances of audit trail feature being tampered with.
For Batliboi & Purohit
Chartered Accountants
Firm Registration Number:101048W
Raman Hangekar
Partner
Place: Mumbai Membership No. 030615
Date: May 28, 2025 UDIN: 25030615BMOCPR2760
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