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A.K.Capital Services Ltd.

BSE: 530499 Sector: Financials
NSE: N.A. ISIN Code: INE701G01012
BSE 00:00 | 08 Aug 437.65 11.10
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NSE 05:30 | 01 Jan A.K.Capital Services Ltd
OPEN 432.00
PREVIOUS CLOSE 426.55
VOLUME 1161
52-Week high 554.90
52-Week low 326.00
P/E 10.07
Mkt Cap.(Rs cr) 289
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 432.00
CLOSE 426.55
VOLUME 1161
52-Week high 554.90
52-Week low 326.00
P/E 10.07
Mkt Cap.(Rs cr) 289
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

A.K.Capital Services Ltd. (AKCAPITALSERV) - Auditors Report

Company auditors report

To

The Members of

A. K. Capital Services Limited

Report on the audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of A.K. Capital Services Limited ("the Company") which comprise the balance sheet asat March 312021 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 thenended and notes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the standalone financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardprescribed under Section 133 of the Act read with the Companies (Indian AccountingStandard) Rules 2015 as amended ("Ind AS") and the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 312021the profit and other comprehensive income changes in equity and its cash flows for theyear 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 Act. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit ofthe Standalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI) together with the ethical requirements that are relevant toour audit of the standalone financial statements under the provisions of the Act and theRules made thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the standalone financial statements.

Emphasis of Matter

We draw attention to Note 41 of the standalone financial statementswhich describe the management's assessment of the impact of the COVID-19 pandemic onthe financial results of the Company and estimates related to impairment of assets whichare dependent on future developments regarding the severity and duration of the pandemic.Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. For each matter below our description of how ouraudit addressed the matter is provided in that context.

We have determined the matters described below to be the key auditmatters to be communicated in our report. We have fulfilled the responsibilities describedin the Auditor's responsibilities for the audit of the standalone financialstatements section of our report including in relation to these matters. Accordingly ouraudit included the performance of procedures designed to respond to our assessment of therisks of material misstatement of the standalone financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying standalone financial statements.

Sr. No. Key Audit Matter How Our audit addressed the key audit matter
1(a) Measurement of investments in accordance with Ind AS 109 "Financial Instruments" (note 2 6 36 37 and 39 to the Standalone Financial Statements) Principal Audit Procedures
• Obtained an understanding of Company's business model assessed in accordance with Ind AS 109;
On initial recognition investments are recognized at fair value in case of Investments which are recognised at fair value through profit and loss (FVTPL) its transaction cost is recognised in the statement of profit and loss. In other cases the transaction costs are attributed to the acquisition value of the investments.
• Evaluated the Company's assessment of business model;
• Obtained an understanding of the determination of the measurement of the investments and tested the reasonableness of the significant judgments applied by the management;
The Company's investments are subsequently classified into following categories based on the objective of its business model to manage the cash flows and options available in the standard:
• Evaluated the design of internal controls relating to the measurement and also tested the operating effectiveness of the aforesaid controls;
• Debt instruments at amortised cost • Ensured that the Company has used valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value maximising the use of relevant observable inputs and minimising the use of unobservable inputs including consideration of the current economic and market conditions due to COVID-19 pandemic;
• Debt instruments and equity instruments at fair value through profit or loss (FVTPL)
• Equity instruments measured at fair value through other comprehensive income (FVTOCI)
The Company has assessed following two business model: • Obtained and assessed the valuation certificate of independent valuer in respect of fair value investments; and
- Held to collect contractual cash flows
- Realising cash flows through the sale of investments. The Company makes decisions based on the assets' fair values and manages the assets to realise those fair values.
• Assessed the appropriateness of the disclosure in the standalone financial statements in accordance with the applicable financial reporting framework.
Since valuation of investments at fair value involves critical assumptions significant risk in valuation and complexity in assessment of business model the valuation of investments as per Ind AS 109 is determined to be a key audit matter in our audit of the standalone financial statements.
1(b) Impairment loss on investments measured at amortized cost: (note 2 6 36 and 37 to the Standalone Financial Statements) Principal audit procedures
• Analysed the methodology for the allowance for credit losses including consideration of the current and estimated future economic conditions arising from the COVID-19 pandemic;
Recognition and measurement of impairment relating to the investments measured at amortized cost involves significant management judgment and as per the requirements of Ind AS 109 credit loss assessment is based on management's ECL model. Management exercises judgment in determining the quantum of loss based on a range of factors.
• For investments and allowance for the credit loss thereon we tested the input data such as credit reports and other credit related information used in estimating the probability of default by comparing them to external and internal sources of information.
The most significant areas are:
- Credit ratings of the investments;
- Investment staging criteria; • Verified the data inputs used for probability of default rate and loss given defaults rate;
- Calculation of probability of default rate / Loss given default rate;
• Verified the computation of the allowance for credit losses and tested the mathematical accuracy; and
- Consideration of probability weighted scenarios; and
• Assessed the appropriateness of the disclosure in the standalone financial statements in accordance with the applicable financial reporting framework.
- Forward looking macro-economic factors.
The Company considered current and anticipated future economic conditions relating to industries the Company deals. In calculating expected credit loss the Company has also considered credit reports and other related credit information for its investments to estimate the probability of default in future and has taken into account estimates of possible effect from the pandemic relating to COVID -19.
There is a large increase in the data inputs required for the computation of ECL of investments. This increases the risk of completeness and accuracy of the data that has been used as a basis of assumptions in the model and therefore we identified allowance for credit losses of investments as a key audit matter.
2 Related party transactions and disclosures (as described in note 34 of the Standalone Financial Statements) Principal Audit Procedures
• Obtained read and assessed the Company's policies processes and procedures in respect of identifying related parties evaluation of arm's length obtaining necessary approvals recording and disclosure of related party transactions including compliance of transactions and disclosures in accordance with the regulations.
The Company has undertaken transactions with its related parties in the normal course of business.
We have identified the accuracy and completeness of related party transactions and its disclosure as set out in respective notes to the standalone financial statements as a key audit matter to verify whether the transactions are recorded at arm length basis disclosure of such transactions in the financial statements and regulatory compliance thereon during the year ended 31 March 2021.
• We have tested on a sample basis related party transactions with the underlying contracts and other supporting documents for appropriate authorization and approval for such transactions.
• We have read minutes of meeting of the Board and its relevant committee meetings and minutes of meetings of those charged with governance in connection with transactions with related parties affected during the year and Company's assessment of related party transactions being in the ordinary course of business at arm's length and in accordance with the regulations.
• Assessed and tested the disclosures made in accordance with the requirements of Ind AS and the applicable regulations.

Information Other than the Financial Statements and Auditor'sReport Thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in Board's Report including Annexures to Board's Report andShareholder's Information but does not include the standalone financial statementsand our auditor's report thereon.

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

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information; we are required to report that fact. Wehave nothing to report in this regard.

Management's Responsibility for the Standalone FinancialStatements

The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Act with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance (including other Comprehensive Income) cash flows and changes in equity ofthe Company in accordance with the Indian Accounting Standards (Ind AS) and otheraccounting principles generally accepted in India. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor the safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management isresponsible 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 are also responsible for overseeing theCompany's financial reporting process.

Auditors' Responsibility for the audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin

(i) planning the scope of our audit work and in evaluating the resultsof our work; and

(ii) to evaluate the effect of any identified misstatements in thestandalone financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 of India in terms of sub-section(11) of Section 143 of the Act we give in the Annexure "A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act based on our audit wereport that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit;

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books;

c) The balance sheet the statement of profit and loss changes inequity and the statement of cash flows dealt with by this Report are in agreement with thebooks of account;

d) In our opinion the aforesaid standalone financial statements complywith the Indian Accounting Standards specified under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended;

e) On the basis of the written representations received from thedirectors as on March 312021 and taken on record by the Board of Directors none of thedirectors is disqualified as on March 312021 from being appointed as a director in termsof Section 164(2) of the Act;

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in "Annexure B". Our report expresses an unmodifiedopinion on the adequacy and operating effectiveness of the Company's internalfinancial control over financial reporting;

g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of Section 197(16) of the Actas amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid or provided to its directors during theyear is in accordance with the provision of Section 197 of the Act;

h) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 as amended in our opinion and to the best of our information and accordingto the explanations given to us:

i. The Company does not have any pending litigations which would impactits standalone financial position;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses; and

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.

For PYS & CO. LLP
Chartered Accountants
Firm's Registration No. 012388S/S200048
G.D. Joglekar
Partner
Membership No.: 39407
UDIN: 21039407AAAAIV2347
Place: Mumbai
Date: May 29 2021

ANNEXURE ‘A'TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 1 under the heading "Report on OtherLegal and Regulatory Requirements" of our report of even date)

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) The Company has regular programme of physical verification of itsfixed assets by which all the fixed assets are verified in a phased manner which isreasonable having regard to size of the Company and nature of its fixed assets. During theyear the management of the Company has conducted physical verification of all of itsfixed assets and no discrepancy was noticed on such verification.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.

(ii) Considering the nature of business the Company does not haveinventory. In view of this paragraph 3(ii) of the Order is not applicable to the Company.

(iii) The Company has not granted any loans secured or unsecured tocompanies firms limited liability partnerships or other parties covered in the registermaintained under Section 189 of the Act. Accordingly the Paragraph 3 (iii) (a) 3 (iii)(b) and 3 (iii) (c) of the Order are not applicable to the Company.

(iv) In our opinion and according to the information and explanationsprovided to us the Company has complied with the provisions of Section 185 and 186 of theAct with respect to loans guarantees security and investments.

(v) In our opinion and according to the information and explanationsgiven to us the Company has not accepted any deposits during the year from the public towhich the directives issued by the Reserve Bank of India and the provisions of Sections 73to 76 and any other relevant provisions of the Act and the rules framed thereunder apply.

(vi) In our opinion and according to the information and explanationsgiven to us the Central Government has not prescribed maintenance of cost records underSub-section (1) of Section 148 of the Act.

(vii) (a) According to the information and explanations given to usthe Company has been generally regular in depositing undisputed statutory dues includingprovident fund income tax goods and service tax cess and any other statutory dues withthe appropriate authorities. There are no arrears of outstanding statutory dues as at theMarch 312021 for a period of more than six months from the date they became payable. Asinformed during the year statutory dues in the nature of duty of excise duty ofcustoms value added tax and sales tax are not applicable to the Company.

(b) According to information and explanations given to us there are nodues on account of sales tax goods and service tax duty of customs duty of excisevalue added tax and cess which have not been deposited with the appropriate authorities onaccount of any dispute.

(viii) In our opinion and according to information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings to banksfinancial institutions. Further the Company does not have any loans or borrowings fromgovernment and has not issued any debentures during the year.

(ix) Based on information and explanations given to us the term loanshave been applied for the purposes for which they were raised. The Company has not raisedany money by way of initial public offer or further public offer.

(x) To the best of knowledge and according to the information andexplanations given to us no fraud by the Company or any fraud on the Company by itsofficers or employees have been noticed or reported during the year.

(xi) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has paid/provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable to the Company.

(xiii) According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with Section 177 and 188 of the Act where applicable and detailsof such transactions have been disclosed in the standalone financial statements asrequired by the applicable accounting standards.

(xiv) According to the information and explanations give to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year.

(xv) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him as referred to insection 192 of the Act. Accordingly paragraph 3(xv) of the Order is not applicable to theCompany.

(xvi) The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934.

For PYS & CO. LLP
Chartered Accountants
Firm's Registration No. 012388S/S200048
G.D. Joglekar
Partner
Membership No.: 39407
UDIN: 21039407AAAAIV2347
Place: Mumbai
Date: May 29 2021

ANNEXURE ‘B'TO THE INDEPENDENT AUDITORS'REPORT

(Referred to in paragraph 2(f) under the heading ‘Report on OtherLegal and Regulatory Requirements' of our report of even date)

Report on the internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financialreporting of A. K. Capital Services Limited as of March 312021 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting issued by the Institute of Chartered Accountants of India(‘ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence toCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting and the Standards on Auditing prescribed under section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting 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 Ind AS financial statements whether due to fraud orerror.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.

Meaning of internal Financial Controls Over Financial Reporting

A Company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of standalone financial statements for external purposes inaccordance with generally accepted accounting principles. A Company's internal financialcontrol over financial reporting includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the Company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial 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 standalonefinancial statements.

Inherent Limitations of internal Financial Controls Over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper management overrideof controls 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 further periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2021 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Control Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For PYS & CO. LLP
Chartered Accountants
Firm's Registration No. 012388S/S200048
G.D. Joglekar
Partner
Membership No.: 39407
UDIN: 21039407AAAAIV2347
Place: Mumbai
Date: May 29 2021

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