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Central Depository Services (India) Ltd.

BSE: 538434 Sector: Financials
NSE: CDSL ISIN Code: INE736A01011
BSE 05:30 | 01 Jan Central Depository Services (India) Ltd
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Central Depository Services (India) Ltd. (CDSL) - Auditors Report

Company auditors report

To

The Members of

CENTRAL DEPOSITORY SERVICES (INDIA) LIMITED

Report on the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of CENTRALDEPOSITORY SERVICES (INDIA) LIMITED ("the Company") which comprise the BalanceSheet as at March 31 2018 and the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and a summary of the significant accounting policies and otherexplanatory information.

Management's Responsibility for the Standalone Ind AS Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the Indian Accounting Standards(Ind AS) prescribed under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended and other accounting principles generallyaccepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalone IndAS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

In conducting our audit we have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made thereunder and the Orderissued under section 143(11) of the Act.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the Ind AS and other accounting principles generally accepted in India of the stateof affairs of the Company as at March 31 2018 and its profit total comprehensiveincome its cash flows and the changes in equity for the year ended on that date.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit 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 relevant books of account.

d) In our opinion the aforesaid standalone Ind AS financial statements comply with theIndian Accounting Standards prescribed under section 133 of the Act.

e) On the basis of the written representations received from the directors of theCompany and taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2018 from being appointed as a director in terms of Section164(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 Company's internal financial controls overfinancial reporting.

g) 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 as at March 31 2018 onits financial position in its standalone Ind AS financial statements;

ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses on long term contracts as at March 31 2018.The Company does not have any outstanding derivative contracts as at March 31 2018.

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

2. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm's Registration No. 117365W)

G. K. Subramaniam

Partner

(Membership No. 109839)

MUMBAI April 21 2018

ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph (f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Act

We have audited the internal financial controls over financial reporting of CENTRALDEPOSITORY SERVICES (INDIA) LIMITED ("the Company") as of March 31 2018 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor 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 efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.

Auditors' Responsibility

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 on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and 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 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 auditor's judgement including the assessment of the risks ofmaterial 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 Company's 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material 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.

Opinion

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 March 31 2018 based on "the criteria forinternal financial control over financial reporting established by the Company consideringthe essential components of internal control stated in the Guidance Note issued by theInstitute of Chartered Accountants of India".

For DELOITTE HASKINS & SELLS

Chartered Accountants

(Firm's Registration No. 117365W)

G. K. Subramaniam

Partner

(Membership No. 109839)

MUMBAI April 21 2018

ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report of even date)

(i) (a) According to the information and explanations given to us the Company hasmaintained proper records showing full particulars including quantitative details andsituation of fixed assets.

(b) The fixed assets were physically verified during the year by the Management inaccordance with a regular programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. According to theinformation and explanation given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed provided to us we reportthat the title deeds comprising all the immovable properties of land and buildings whichare freehold are held in the name of the Company as at the balance sheet date. In respectof immovable properties of land and buildings that have been taken on lease and disclosedas fixed asset in the financial statements the lease agreements are in the name of theCompany where the Company is the lessee in the agreement.

(ii) The Company does not have any inventory and hence reporting under clause (ii) ofthe Order is not applicable.

(iii) To the best our knowledge and according to the information and explanations givento us the Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained undersection 189 of the Act.

(iv) To the best our knowledge and according to the information and explanations givento us the Company has not granted any loans made investments or provided guaranteesunder the provisions of Sections 185 and 186 of the Act and hence reporting under clause(iv) of the Order is not applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year. According to the information and explanations givento us no order has been passed by the Company Law Board or National Company Law Tribunalor the Reserve Bank of India or any Court or any other Tribunals in this regard in thecase of the Company.

(vi) To the best our knowledge and according to the information and explanations givento us the Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act in respect of the services rendered by the Company.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) The Company has been regular in depositing undisputed statutory dues includingProvident Fund Employees' State Insurance Value Added Tax Income-tax Service TaxGoods and Service Tax cess and other material statutory dues applicable to it to theappropriate authorities. There were no amounts payable in respect of Sales Tax CustomsDuty Work Contract Tax and Excise Duty.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Service Tax Goods and Service Tax cess Sales Tax CustomsDuty Work Contract Tax Value Added Tax and Excise Duty and other material statutorydues in arrears as at March 31 2018 for a period of more than six months from the datethey became payable.

(c) Details of dues of Income-tax and Service Tax which have not been deposited as onMarch 31 2018 on account of disputes are given below:

Name of Statute Nature of dues Forum where dispute is pending Period to which the amount relates Amount involved (Rs. in Lakhs) Amount unpaid (Rs. in Lakhs)
Service Tax Service Tax Customs Excise & Service Tax Appellate Tribunal West Zonal Bench FY 2004-05 to FY 2008- 09 3293.70 3293.70
Service Tax Service Tax Customs Excise & Service Tax Appellate Tribunal West Zonal Bench FY 2009-10 512.02 512.02
Service Tax Service Tax Customs Excise & Service Tax Appellate Tribunal West Zonal Bench FY 2010-11 86.81 86.81
Service Tax Service Tax Customs Excise & Service Tax Appellate Tribunal West Zonal Bench FY 2011-12 86.28 86.28
Income Tax Income Tax The Commissioner of Income Tax (Appeals) Mumbai FY 2010-11 4.92 4.92

There are no dues of Sales Tax Customs Duty Excise Duty and Value Added Tax as onMarch 31 2018 on account of disputes.

(viii) To the best of our knowledge and according to the information and explanationsgiven to us the Company has not taken any loans or borrowings from financialinstitutions banks and government and has not issued any debentures. Hence reportingunder clause (viii) of the Order is not applicable to the Company.

(ix) To the best of our knowledge and according to the information and explanationsgiven to us the Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments) or term loans and hence reporting under clause(ix) of the Order is not applicable.

(x) To 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) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.

(xiii) In our opinion and according to the information and 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 as required by the applicable accountingstandards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of the Order is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any noncash transactions with itsdirectors or persons connected with them and hence provisions of section 192 of the Actare not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For DELOITTE HASKINS & SELLS

Chartered Accountants (Firm's Registration No. 117365W)

G. K. Subramamam
Partner
MUMBAI April 21 2018 (Membership No. 109839)