The Members of
Aditya Birla Capital Limited
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements of Aditya BirlaCapital Limited (the "Company") which comprise the Balance Sheet as at 31stMarch 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 summa of significant accounting policies and other explanato information.In our opinion and to the best of our information and according to the explanations givento us the aforesaid standalone 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 31st March 2021 and its profit totalcomprehensive income its cash flows and the changes in equity for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the AuditorsResponsibility for the Audit of the Standalone Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAIs Code of Ethics.We believe that the audit evidence obtained by us is sufficient and appropriate to providea basis for our audit opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
|Key Audit Matter ||Auditors Response |
|1. Impairment of Investments ||We performed the following audit procedures: |
|Where impairment indicators have been identified the quantification of impairment in the caring 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. || Compar ing the assumptions to externally derived data in relation to key inputs such as long-term growth rates and discount rates. |
|(Refer Note 2.3 8 and 48 to the Standalone Financial Statements) || Assessing the appropriateness of the forecasted cash flows within the budgeted period based on our understanding of the business. |
| || Considering historical forecasting accuracy by comparing previously forecasted cash flows to actual results achieved. |
| || Inv olving our fair valuation experts to challenge the managements underlying assumptions for terminal growth rate and weighted average cost of capital and the appropriateness of the valuation model used. |
| || P erforming sensitivity analysis in relation to the key assumptions. |
Information Other than the Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the other information.The other information comprises the information included in the Boards Report(including annexures thereto) Business Responsibility Statement and Management discussionand analysis (MD&A) (collectively referred to as "other information") butdoes not include the consolidated financial statements the standalone financialstatements and our auditors report thereon.
Our opinion on the standalone financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements ourresponsibility 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 a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.
Managements Responsibility for the Standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the 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 standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error. In preparing the standalone financial statements management isresponsible for assessing the Companys 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. Those Board of Directors arealso responsible for overseeing the Companys financial reporting process.
Auditors Responsibility for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditors report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone financial statements. As part of an auditin accordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forge intentional omissions misrepresentations or the override of internalcontrol.
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 managements use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompanys ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors report. However future events or conditionsmay cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider 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 standalone financialstatements.
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 alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. A s required by Section 143(3) of the Act based on our audit we report to theextent applicable that:
a We have sought and obtained all the information and) explanations which to the bestof our knowledge and belief were necessa for the purposes of our audit.
b I ) n 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 T ) he 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 books of account.
d I ) n our opinion the aforesaid standalone financial statements comply with the IndAS specified under Section 133 of the Act.
e On the basis of the written representations received) from the directors as on 31stMarch 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2021 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 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 Companys internal financial controlsover financial reporting.
g With respect to the other matters to be included in the) Auditors Report inaccordance with the requirements of section 197(16) of the Act as amended I n ouropinion and to the best of our information and according to the explanations given to usthe remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act.
h With respect to the other matters to be included) in the Auditors 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 does not have any pending. litigations which would impact its financialposition.
i The Company did not have any long-termi. contracts including derivative contracts forwhich there were any material foreseeable losses.
i There were no amounts which were required
ii. to be transferred to the Investor Education and Protection Fund by the Company.
2. A s required by the Companies (Auditors Report) Order 2016 (the"Order") issued by the Central Government in terms of Section 143(11) of theAct we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.
For Deloitte Haskins & Sells LLP
(Firms Registration No. 117366W/W-100018)
Membership No. 108262
Date: 14th May 2021
Annexure "A" to the Independent Auditors Report
(Referred to in paragraph 1(f) under Report on Other Legal and RegulatoRequirements section of our report of even date) Report on the Internal FinancialControls Over Financial Reporting under Clause (i) of Sub-section 3 of Section 143 of theCompanies Act 2013 (the "Act")
We have audited the internal financial controls over financial reporting of AdityaBirla Capital Limited (the "Company") as of 31st March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India.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 companys 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 Companies Act 2013.
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 Companies Act 2013 to the extent applicable to an audit ofinternal financial controls. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects.
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 auditors judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Companys 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 necessa 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 31st March 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note.
For Deloitte Haskins & Sells LLP
(Firms Registration No. 117366W/W-100018)
Membership No. 108262
Date: 14th May 2021
Annexure "B" to the Independent Auditors Report
(Referred to in paragraph 2 under Report on Other Legal and RegulatoRequirements section of our report of even date)
(i) I n respect of fixed assets:
a The Company has maintained proper records showing) full particulars includingquantitative details and situation of the fixed assets.
b The Fixed assets were physically verified during the) previous year by the Managementwith a regular programme of verification which in our opinion provides for physicalverification of all the fixed assets at reasonable intervals. According to the informationand explanations given to us no material discrepancies were noticed on such verification.
c) According to the information and explanations given to us and the records examinedby us and based on the examination of share certificate provided to us we report thatthe title deed comprising the immovable property in building (Apeejay House) which isfreehold is in the name of the Company as at the balance sheet date.
(ii) The Company is Core Investment Company and its do not require it to hold anyinventories and hence reporting under clause (ii) of the Order is not applicable.
(iii) The Company has granted loans secured or unsecured companies firms LimitedLiability Partnerships or other parties covered in the register maintained under section189 of the Companies Act 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 Companys interest.
b The schedule of repayment of principal and payment) of interest has been stipulatedand repayments or receipts of principal amounts and interest have been regular as perstipulations.
c There is no overdue amount remaining outstanding) as at the year-end.
(iv) A ccording to the information and explanations to us the Company has not grantedany loans made investments provided guarantees and security under provisions of section185 and 186 of the Companies Act 2013 and hence reporting under clause (iv) of the CARO2016 is not applicable.
(v) A ccording to the information and explanations us the Company has not accepted anydeposit during the year and there are no unclaimed deposits as on the Balance Sheet dateand hence reporting under clause (v) of the Order is not applicable.
(vi) H aving regard to the nature of the Companys business / activitiesreporting under clause (vi) of the Order is not applicable.
(vii) A ccording to the information and explanations given to us in respect ofstatuto dues:
a The Company has generally been regular in depositing) undisputed dues includingProvident Fund Family Pension Fund Goods and Service Tax and other material statutodues applicable to it with the appropriate authorities. To the best of our knowledge andbelief the Company was not required to deposit or pay any dues in respect ofEmployees State Insurance Customs duty and Cess during the year.
b T ) here were no undisputed amounts payable in respect of Provident Fund FamilyPension Fund Income-tax Goods and Service Tax and other material statuto dues inarrears as at 31st March 2021 for a period of more than six months from thedate they became payable. to
c T ) here were no dues in respect of Customs duty Cess Income-tax and Goods andService Tax which have not been deposited as on 31st March 2021 on account ofdisputes.
(viii) The Company has not taken any loans or borrowings from financial institutionsbanks and government or has not issued any debentures. Hence reporting under clause (viii)of CARO 2016 is not applicable to the Company.
(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause (ix) ofthe Order is not applicable.
(x) T o 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) I n our opinion and according to the information and explanations given to us theCompany has paid managerial to remuneration in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Companies Act 2013.
(xii) A ccording to the information and explanations given to the Company is not aNidhi Company and hence reporting under clause (xii) of the Order is not applicable.
(xiii) I n our opinion and according to the information explanations given to us theCompany is in compliance with Section 188 and 177 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) D uring the previous year the Company has made allotment of equity shares and itis in compliance with the section 42 of the Companies Act 2013. The part of the amountraised through preferential allotment has been used for the purposes for which the fundswere raised us and balance is maintained in mutual fund as tempora investments pendingutilisation for stated purposes.
(xv) I n our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of the Act arenot applicable.
(xvi) The Company is required to be registered under section
45-IA of the Reserve Bank of India Act 1934 and it has obtained the registration.
For Deloitte Haskins & Sells LLP
(Firms Registration No. 117366W/W-100018)
Membership No. 108262
Date: 14th May 2021