We have audited the accompanying financial statements of Scintilla Commercial & Credit 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 Changes in Equity and the Statement of Cash Flows for the year
then ended, and notes to the financial statements, including a summary of significant accounting policies and
other explanatory information (hereinafter referred to as (" Financial Statements").
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 ("the Act") in the
manner so required and give a true and fair view in conformity with the Indian Accounting Standards
prescribed under section 133 of the Act read with the Companies (Indian Accounting Standards) Rules, 2015,
as amended, ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the
Company as at March 31, 2025, and total comprehensive income (comprising of net profit and other
comprehensive income/(loss)), changes in equity and its cash flows for the year then ended.
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 Auditor's
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 ("the
ICAI") together with the ethical requirements that are relevant to our audit of the standalone financial
statements under the provisions of the Act and the Rules made there under, and we have fulfilled our other
ethical responsibilities in accordance with these requirements and the ICAI's Code of Ethics. We believe that the
audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the financial
statements.
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. We have determined the matters described below to be the key audit matters to be communicated
in our report.
Description of Key Audit Matter
Provision for expected credit losses (ECL) on loans (refer note no 5.2(f), note no 11 and 34(1)(a) of the financial
statements
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Sr.
No.
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Key Audit Matter
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How the matter was addressed in our audit
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1.
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Management estimates impairment
provision using Expected Credit loss model
for the loan assets. Measurement of loan
impairment involves application of
significant judgement by the
management. The most significant
judgements are:
Timely identification and classification of
the impaired loans.
Determination of probability of defaults
(PD) and estimation of loss given defaults
(LGD) based on the premise that loans
made by the company are unsecured and
relevant factors.
The estimation of Expected Credit Loss
(ECL) on financial instruments involve
significant judgments and estimates.
Following are points with increased level
of audit focus:
• Classification of assets to stage 1, 2 or 3
using criteria in accordance with Ind AS
109
• Accounting interpretations,
assumptions and data used to build the
models;
• Inputs and judgements used by the
management at various assets stages.
• The disclosures made in the financial
statements for ECL especially in
relation to judgements and estimates
made by the management in
determination of the ECL.
Considering the significance of such
allowances to the overall financial
statements and degree of judgement and
estimation involved in computation of
expected credit losses, this area is
considered as key audit matter.
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1) In our audit approach we assessed the basis upon
which the ECL model is build and discussed with the
management of the Company in order to understand
the mechanics of ECL deployed by the company to
measure the loan impairment.
2) We examined that Board does not have approved
policy for computation of ECL, but have in place the
internal guidelines for computation of ECL. These
internal guidelines address procedures and controls for
assessing and measuring the credit risk on its loan
portfolio.
3) We evaluated the operating effectiveness of controls
across the process relevant to ECL including the
judgments and estimates.
4) We evaluated the nature of loan assets of the company
and held discussions with the management and
assessed that the company has only one class of loan
i.e. unsecured loans repayable on demand and 12
month ECL is just the same as lifetime ECL, because the
all the loans are repayable on demand, which is shorter
than 12 months as a result life time of a loan is that
short period required to transfer cash when demanded
by the company.
5) We tested the completeness of loans and advances
included in the Expected Credit Loss calculations as of
March 31, 2025 by reconciling it with the balances as
per loan balance register as on date.
6) We tested assets on sample basis to verify that they
were allocated to the appropriate stage.
7) For samples of exposure, we tested the
appropriateness of determining EAD, PD and LGD.
8) For forward looking assumptions used in ECL
calculations, we held discussions with management,
assessed the assumptions used to determine the
probability weights assigned to the possible outcomes.
During our examination we assessed that company
estimates the PD based on historical observed default
rates adjusted for forward looking estimates, based
upon macro-economic developments occurring in the
economy and market it operates in.
9) We performed an overall assessment of the ECL
provision including the management's assessment if
they were reasonable considering the Company's
portfolio, risk profile, credit risk management practices
and the macro-economic environment. We held
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Sr.
No.
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Key Audit Matter
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How the matter was addressed in our audit
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1.
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discussions with the management on its assessment
and we assessed that management does not expect
any significant impairment in its entire loan portfolio.
However, we could not assess the appropriateness of
the future scenarios and assumptions made by the
management in response to economic uncertainty as
we do not have the access of the detailed data (like
Income tax returns, financial statements, projected
financial statements, cash flow statements etc.) of the
borrowers of the company.
10) We assessed the adequacy and appropriateness of
disclosures in compliance with accounting standards in
relation to judgements used in estimation of ECL
provisions.
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Information other than the Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the other information. The other information comprises the
information included in the Management's Discussion and Analysis, Board's Report including Annexure to Board's
Report, Corporate Governance Report included in the Company's annual report, but does not include the financial
statements and our auditor's 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 during the course of our 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.
When we read the other information included in the above reports, if we conclude that there is material
misstatement therein, we are required to communicate the matter to those charged with governance and
determine the actions under the applicable laws and regulations.
Management's Responsibility and those charged with governance for the Financial Statements
The Company's Board of Directors are responsible for the matters stated in section134(5) of the Act with respect to
the preparation of these financial statements that give a true and fair view of the financial position, financial
performance, changes in equity and cash flows of the Company in accordance with the Indian Accounting
Standards (Ind AS) specified under Section 133 of the Act and other accounting principles generally accepted in
India. This responsibility also includes maintenance of adequate accounting records in accordance with the
provisions of the Act for safe guarding 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 statements that give a true and fair view and are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, Management is 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. The Company's Board of Directors are also responsible for overseeing the Company's
financial reporting process.
Auditor's 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 auditor's 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:
• 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.
• 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 Act, we are also responsible for
expressing our opinion on whether the Company has adequate internal financial control system in place
and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
and related disclosures made by management.
• 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 auditor's 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 auditor's report.
However, future events or conditions may cause the Company to cease to continue as a going concern.
• 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 origin aggregate,
makes it probable that the economic decisions of a reasonably knowledgeable user of the standalone 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 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 auditor's 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
1) As required by the Companies (Auditor's Report) Order, 2020 ("the Order") issued by the Central Government in
terms of Section143(11) of the Act, we give in the "Annexure B" a statement on the matters specified in paragraph
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 best of 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 the Company so far as it appears
from our examination of those books.
c) The Balance Sheet, the Statement of profit and loss (including other comprehensive income), the Statement of
Changes in Equity and the Statement of cash flow dealt with by this Report are in agreement with the relevant
books of account.
d) In our opinion, the aforesaid financial statements comply with the Indian Accounting Standards specified under
Section 133 of the Act.
e) On the basis of the written representations received from the directors as on March 31, 2025 taken on record by
the Board of Directors, none of the directors is disqualified as on March 31, 2025 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 with reference to financials statements of the
Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure A".
g) With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Amendment Rules, 2021, effective from 01st April 2021, in our opinion and to best
of our information and according to the explanations given to us:
a) The Company did not have any material pending litigations as at March 31, 2025, which may effect on its
financial position significantly
b) The Company did not have any long-term contracts including derivative contracts for which there were any
material foreseeable losses, during the year ended March 31, 2025.
c) During the year no amounts were required to be transferred, to the Investor Education and Protection Fund by
the Company, so the question of delay in transferring such sums does not arise.
d) Omitted by the Companies (Audit and Auditors) Amendment Rules 2021, effective from 01st April, 2021
e) (i) The Management has represented that, to the best of its knowledge and belief, as disclosed in Note
36(1)(14)(A) to the financial statements, 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 Note
36(1)(14)(B) to the financial statements, no funds have been received by the Company from any person(s) or
enti'ty(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) Unmodified Opinion:
Based on the audit procedures performed that have 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) contain any material mis-statement.
f) No dividends were declared or paid during the year by the Company, hence compliance with Section 123 of the
Companies Act, 2013 is not applicable
g) With respect to the matters to be included in the Auditors Report in accordance with Rule 11(g) of Companies
(Audit and Auditors) Rules 2014 effective from 1st April 2023, in our opinion and to the best of our information and
according to the explanations given to us and based on our examination which included test checks, the Company
have used an accounting software for maintaining its books of accounts which has a feature of recording audit trail
(edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the
software in compliance to the Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 (or maintaining books
of account using accounting software which has a feature of recording audit trail (edit log) facility as applicable to
the company with effect from April, 2023). Further, during the course of our audit we did not come across any
instance of audit trail feature being tampered with.
Further pursuant to Proviso to Rule 3(1) of the Companies (Accounts) Rules 2014 for reporting requirement for
preservance of Audit trail by the company, the company has preserved/retained the audit trail and the same has
not been tampered with.
3) With respect to the matter to be included in the Auditor's Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the
Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act read
with Schedule V to the Act.
For and on behalf of
For Surajit Roy and Associates
Chartered Accountants
Firm Registration Number: 326099E
Sd/-
CA Surajit Roy
Partner
Membership Number: 057260
UDIN:25057260BMIEVT7213
Place: Kolkata
Date: 29-05-2025
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