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BSE Ltd.

BSE: 538397 Sector: Others
NSE: BSE ISIN Code: INE118H01025
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BSE Ltd. (BSE) - Auditors Report

Company auditors report

To the Members of BSE Limited

Report on the Audit of the Ind AS Financial Statements Opinion

We have audited the accompanying Ind AS financial statements of BSE Limited ("theCompany") which comprise the Balance sheet as at March 31 2020 the Statement ofProfit and Loss including Other Comprehensive Income the Cash Flow Statement and thestatement of Changes in Equity for the year then ended and notes to the Ind AS financialstatements including a summary of significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013 as amended ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2020 its Profitincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.

Basis for Opinion

We conducted our audit of the Ind AS financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the ‘Auditor'sResponsibilities for the Audit of the Ind AS Financial Statements' section of our report.We are independent of the Company in accordance with the ‘Code of Ethics' issued bythe Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fullled 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 Ind AS financial statements.

Emphasis of Matter

We draw attention to Note 43 to the Ind AS financial statements in respect ofcontribution to be made of Rs. 1264 lakhs to Core Settlement Guarantee Fund (‘coreSGF') by the Company to clearing corporations(‘CCs') other than Indian ClearingCorporation Limited ("ICCL"). Considering the representation made by the CCs andto be made by the Company to Securities Exchange Board of India ("SEBI") andpending clarication to be received from them in this regard no impact has been consideredin the Ind AS financial statements.

Our opinion is not modied in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignicance in our audit of the Ind AS financial statements for the financial year endedMarch 31 2020. These matters were addressed in the context of our audit of the Ind ASfinancial 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 audit matters to becommunicated in our report. We have fullled the responsibilities described in theAuditor's responsibilities for the audit of the Ind AS financial statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the Ind AS financial statements. The results of our audit proceduresincluding the procedures performed to address the matters below provide the basis for ouraudit opinion on the accompanying Ind AS financial statements.

Key audit matters How our audit addressed the key audit matter
Valuation of investments and its impairment (as described in note 32 of the Ind AS financial statements)
Quoted investments and unquoted investments represent the most significant amount on the balance sheet. The total of these aggregating to Rs. 216030 Lakhs represented 77% of total assets of the Company as at March 312020. Our audit procedures included the following:
• We assessed the design and implementation of controls over valuation and existence of investments.
• For the fair valuation models we understood and assessed the methodology used. We tested the underlying data and assumptions used in the determination of the fair value.
• We traced the quantity held from the independent confirmation provided by Custodian and Fund houses.
There is a risk that the fair value of investments is not determined appropriately and also considering the current impact of the covid 19 on the impairment of the investment. Accordingly the valuation of investments and its impairment is considered as a key audit matter.
• We tested the valuation of the quoted and unquoted investments to independent pricing sources.
• We assessed and tested the management procedures for performing impairment analysis of investments including likely impact of Covid-19 on value of investments.
Information Technology (IT) systems and controls
As a Stock Exchange the reliability of IT systems plays a key role in the business operations. Since large volume of transactions are processed the IT controls are required to ensure that systems process data as expected and that changes are made in an appropriate manner.

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Our audit procedures included the following:
The IT infrastructure is critical for smooth functioning of the Company's business operations as well as for timely and accurate financial accounting and reporting. • Assessed the information systems used by the Company for IT General Controls (ITGC) and Application controls;
Due to the pervasive nature and complexity of the IT environment and large volume of transactions we have considered IT systems and controls as a key audit matter • The aspects covered in the IT General Control audit were (i) User Access Management (ii) Program Change Management (iii) Other related ITGCs; - to understand the design and test the operating effectiveness of such controls in the system;
• Assessed the changes that were made to the key systems during the audit period and assessing changes that have impact on financial reporting;
• Performed tests of controls (including other compensatory controls wherever applicable) on the IT application controls and IT dependent manual controls in the system.
• Tested the design and operating effectiveness of compensating controls where deficiencies were identified and where necessary extended the scope of our substantive audit procedures.
Provisions for litigation and claims (as described in note 36 of the Ind AS financial statements)
There are certain demands raised by regulatory authorities employees and others. The Company has disputed such demands by appealing them to relevant statutory forums • We obtained and evaluated the Company's accounting policy in relation to accounting assessing and disclosure of claims against the Company.
• We understood the design and tested the operating effectiveness of the Company's key controls over the identification estimation monitoring and disclosure of provisions for litigations and claims.
For various pending litigations against the Company management judgement is needed to determine whether an obligation exists and a provision should be recorded or disclosure if any required in the financial statements in accordance with the criteria set under IND AS 37
• We examined the relevant correspondence with regulators to assess developments in key areas and litigation reports to identify potentially material cases.
• Obtained independent confirmations from lawyers in respect of material cases outstanding.
• We reviewed the Board and other board level committee meeting minutes to assess the effectiveness of management's review controls and conclusions reached.
The measurement of the provision is based on the best estimate of the expenditure required to settle the present obligation.
• For the significant provisions made we understood and assessed the provisioning methodology. We tested the underlying data and assumptions used in the determination of the provisions recorded including expected claim rates.
Considering the judgement and estimate involved matter is considered as a key audit matter.
• For cases where a provision was not recognized we evaluated the adequacy of disclosure made in the Ind AS financial statements.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual Report but does not includethe Ind AS financial statements and our auditor's report thereon.

Our opinion on the Ind AS financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.

In connection with our audit of the Ind AS financial statements our responsibility isto read the other information and in doing so consider whether such other information ismaterially inconsistent with the Ind AS financial statements or our knowledge obtained inthe audit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and the Board of Directors for the Ind AS FinancialStatements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Ind AS 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 accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation 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 Ind AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.

In preparing the Ind AS financial statements management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Ind AS financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the Ind AS financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign 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 hasadequate internal financial controls with reference to nancial statements in place and theoperating effectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

Evaluate the overall presentation structure and content of the Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit ndings including anysignificant deciencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most signicance in the audit of the Ind AS financial statements forthe financial year ended March 31 2020 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso 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 subsection (11) of section 143 ofthe Act we give in Annexure 1 a statement on the matters specified in paragraphs 3 and 4of the Order.

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 bestof our knowledge and belief were necessary for the purposes of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account;

(d) In our opinion the aforesaid Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Ind AS financial statements and theoperating effectiveness of such controls refer to our separate Report in Annexure 2 tothis report;

(g) In our opinion the managerial remuneration for the year ended March 31 2020 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Ind AS financial statements – Refer Note 36 to the Ind AS financialstatements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

iii. During the year there has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.

For S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
Per Jayesh Gandhi
Partner
Membership Number: 037924
UDIN: 20037924AAAACU5730
Place of Signature: Mumbai
Date: May 21 2020

Re: BSE Limited

Annexure 1 referred to in paragraph 2 (f) under the heading

"Report on other legal and regulatory requirements" of our report of evendate

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of xed assets.

(b) Fixed assets have been physically veried by the management during the year and nomaterial discrepancies were identified on such verication.

(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the Company except for the immovable properties viz. P T.J. and Rotunda Buildingsituated at Dalal owers

Street Fort Mumbai 400 001 for which title deeds are not available Further for theother two Properties viz. Machinery

House situated at 11 Bharucha Marg Mumbai 400 023 and Cama Building situated at 24/26Dalal street Fort Mumbai 400 001 title deeds are held in the name of BSE Trustees theerstwhile legal entity.

(ii) The Company's nature of business does not require holding of any inventories andaccordingly the requirements under paragraph 3(ii) of the Order are not applicable to theCompany.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies rms Limited Liability Partnershipsor other parties covered in the register maintained under section 189 of the CompaniesAct 2013. Accordingly the provisions of clause 3(iii) (a) (b) and (c) of the Order arenot applicable to the Company and hence not commented upon.

(iv) In our opinion and according to the information and explanations given to usthere are no loans investments guarantees and securities given in respect of whichprovisions of section 185 of the Companies Act 2013 are applicable. According to theinformation and explanations given to us the Company has complied with the provisions of186 of the Companies Act 2013 in respect investments made by the Company.

(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended).Accordingly the provisions of clause 3(v) of the Order are not applicable.

(vi) T o the best of our knowledge and as explained the Central

Government has not specified the maintenance of cost records under Section 148(1) ofthe Companies Act 2013 for the services rendered by the Company.

(vii) (a) Undisputed statutory dues including provident fund income-tax service taxgoods and service tax cess and other statutory dues have generally been regularlydeposited with the appropriate authorities. As informed the provisions relating toemployees' state insurance sales-tax duty of custom duty of excise and value added taxare not applicable to the Company.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income-tax service tax goods and service tax cessand other statutory dues were outstanding at the year end for a period of more than sixmonths from the date they became payable. As informed the provisions relating toemployees' state insurance sales-tax duty of custom duty of excise and value added taxare not applicable to the Company.

(c) According to the information and explanations given to us there are no dues ofincome tax service tax goods and service tax and cess which have not been deposited onaccount of any dispute. The provisions relating to employees' state insurance sales-taxduty of custom duty of excise and value added tax are not applicable to the Company.

(viii) The Company did not have any outstanding loans or borrowings from financialinstitution or bank or government or has any debentures outstanding during the year.

(ix) According to the information and explanations given by the management the Companyhas not raised any money way of initial public offer or further public offer or debtinstruments or term loans hence reporting under clause (ix) is not applicable to theCompany and hence not commented upon.

(x) Based upon the audit procedures performed for the purpose of reporting the true andfair view of the financial statements and according to the information and explanationsgiven by the management we report that no fraud by the Company or on the Company by theOfficers and employees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by the management themanagerial remuneration has been paid / provided in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

(xii) In our opinion the Company is not a nidhi company. The of clause 3(xii) of theorder are therefore not applicable to the Company and hence not commented upon.

(xiii) According to the information and explanations given by the managementtransactions with the related parties are in compliance with section 177 and 188 of theCompanies Act 2013 where applicable and the details have been disclosed in the notes tothe financial statements as required by the applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the Balance Sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe Company and not commented upon.

(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in section 192 of the Companies Act 2013.

(xvi) According to the information and explanations given to us the provisions ofsection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.

For S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
Per Jayesh Gandhi
Partner
Membership Number: 037924
UDIN: 20037924AAAACU5730
Place of Signature: Mumbai
Date: May 21 2020

Re: BSE Limited

Annexure 2 referred to in paragraph 2 (f) under the heading

"Report on other legal and regulatory requirements" of our report of evendate

Report on the Internal Financial Controls under Clause (i) of Subsection 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of BSE Limited("the Company") as of March 31 2020 in conjunction with our audit of the IndAS financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efcient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these Ind AS financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the "Guidance Note")and the Standards on Auditing as specified under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls and both issuedby the Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting with reference to these Ind AS financial statements was established andmaintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to these Ind ASfinancial statements and their operating effectiveness. Our audit of internal financialcontrols over financial reporting included obtaining an understanding of internalfinancial controls over financial reporting with reference to these Ind AS financialstatements 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 judgement including the assessment of therisks of material misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the internal financial controls over financialreporting with reference to these Ind AS financial statements.

Meaning of Internal Financial Controls Over Financial Reporting with reference to theseFinancial Statements

A company's internal financial control over financial reporting with reference to theseInd AS financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accountingprinciples. A company's internal financial control over financial reporting with referenceto these Ind AS financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial 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 financialstatements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting WithReference to these Ind AS Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these Ind AS financial statements including the possibilityof collusion or improper management override of controls material misstatements due toerror or fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls over financial reporting with reference to these Ind ASfinancial statements to future periods are subject to the risk that the internal financialcontrol over financial reporting with reference to these Ind AS financial statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols over financial reporting with reference to these Ind AS financial statements andsuch internal financial controls over financial reporting with reference to these Ind ASfinancial statements were operating effectively as at March 31 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For S.R. Batliboi & CO. LLP
Chartered Accountants
ICAI Firm Registration Number: 301003E/E300005
Per Jayesh Gandhi
Partner
Membership Number: 037924
UDIN: 20037924AAAACU5730
Place of Signature: Mumbai
Date: May 21 2020

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