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Daulat Securities Ltd.

BSE: 530171 Sector: Financials
NSE: N.A. ISIN Code: INE108C01019
BSE 00:00 | 18 Jun 11.67 0.22
(1.92%)
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NSE 05:30 | 01 Jan Daulat Securities Ltd
OPEN 11.67
PREVIOUS CLOSE 11.45
VOLUME 5708
52-Week high 11.67
52-Week low 2.25
P/E 7.58
Mkt Cap.(Rs cr) 6
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 11.67
CLOSE 11.45
VOLUME 5708
52-Week high 11.67
52-Week low 2.25
P/E 7.58
Mkt Cap.(Rs cr) 6
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Daulat Securities Ltd. (DAULATSECURITIE) - Auditors Report

Company auditors report

To The Members M/S.DAULAT SECURITIES LIMITED

Report on Financial Statements

Opinion

We have audited the accompanying financial statement of DAULAT SECURITIES LIMITED which comprises the Balance sheet as at 31st March 2020 the Statement of Profitand Loss (Including other Comprehensive Income)the Statement of Changes in Equity and theStatement of Cash Flow for the year then ended and a summary of Significant accountingpolicies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (the ‘Act') in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2020 and profit and other comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We have conducted our audit in accordance with the Standards on Auditing specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thosestandards are further described in the Auditor's Responsibilities for the Audit ofFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by Institute of Chartered Accountants of Indiatogether with ethical requirements that are relevant to our audit of financial statementunder the provisions of Companies Act 2013 and rules these under and we have fulfilledour other ethical responsibilities in accordance with these requirements and code ofethics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.

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.

1) Classification and measurement of financial assets

Business model assessment

Ind AS 109 Financial Instruments contains three principal measurement categories forfinancial assets i.e.: Amortised cost; Fair Value through Other Comprehensive Income(‘FVOCI'); and Fair Value through Profit and Loss (‘FVTPL').

A financial asset is classified into a measurement category at inception and isreclassified only in rare circumstances. The assessment as to how an asset should beclassified is made on the basis of both the Group's business model for managing thefinancial asset and the contractual cash flow characteristics of the financial asset. Theterm ‘business model' refers to the way in which the Group manages its financialassets in order to generate cash flows. That is the Group's business model determineswhether cash flows will result from collecting contractual cash flows selling thefinancial assets or both. Amortised cost classification and measurement category is met ifthe financial asset is held within a business model whose objective is to hold financialassets in order to collect contractual cash flows. FVOCI classification and measurementcategory is met if the financial asset is held in a business model in which assets aremanaged both in order to collect contractual cash flows and for sale. Such financialassets are subsequently measured at fair value with changes in fair value recognized inother comprehensive income. FVTPL classification and measurement category is met if thefinancial asset does not meet the criteria for classification and measurement at amortisedcost or at FVOCI. Such financial assets are subsequently measured at fair value withchanges in fair value recognized in profit or loss.

Key audit procedures included: Design / controls

Assessing the design implementation and operating effectiveness of key internalcontrols over management's intent of purchasing a financial asset and the approvalmechanism for such stated intent and classification of such financial assets on the basisof management's intent (business model).

For financial assets classified at amortised cost we tested controls over theclassification of such assets and subsequent measurement of assets at amortised cost.Further we tested key internal controls over monitoring of such financial assets to checkwhether there have been any subsequent sales of financial assets classified at amortisedcost. For financial assets classified at FVOCI we tested controls over the classificationof such assets and subsequent measurement of assets at fair value.

2) Recognition and measurement of impairment of loans and advances involve significantmanagement judgement

With the applicability of Ind AS 109 credit loss assessment is now based on expectedcredit loss (‘ECL') model. The Group's impairment allowance is derived from estimatesincluding the historical default and loss ratios. Management exercises judgement indetermining the quantum of loss based on a range of factors.

The most significant areas are:

• Segmentation of loan book Loan staging criteria

• Calculation of probability of default / Loss given default

• Consideration of probability weighted scenarios and forward lookingmacro-economic factors.

Key audit procedures included: Design / controls

• Assessing the design and implementation of key internal financial controls overloan impairment process used to calculate the impairment charge. We used our modellingspecialist to test the model methodology and reasonableness of assumptions used.

• Testing of management review controls over measurement of impairment allowancesand disclosures in the consolidated financial statements.

Substantive tests

• We focused on appropriate application of accounting principles validatingcompleteness and accuracy of the data and reasonableness of assumptions used in the model.

• Appropriateness of management's judgments was also independently reconsidered inrespect of calculation methodologies segmentation economic factors the period ofhistorical loss rates used loss emergence periods and the valuation of recovery assetsand collateral.

Responsibility of Management and Those Charged with Governance for the FinancialStatements

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 preparationand presentation of these financial statements that give a true and fair view of the stateof affairs profit and other comprehensive income changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards (‘Ind AS') specified under section 133 ofthe Act. This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error. In preparing the standalonefinancial statements management and the Board of Directors are 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 is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibility for the Audit of Financial Statement

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 auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements. As part of an audit inaccordance 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 forgery intentional omissions misrepresentations or the override of internalcontrol.

• 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 Companyhas adequate internal financial controls with reference to the standalone financialstatements in place and the operating effectiveness of such controls. evaluate theappropriateness of accounting policies used and the reasonableness of accounting estimatesand 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue 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. We communicate with those charged with governance regarding among othermatters 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 we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards. From the matters communicatedwith those charged with governance we determine those matters that were of mostsignificance in the audit of the standalone financial statements of the current period andare therefore the key audit matters. We describe these matters in our auditor's reportunless law or regulation precludes public disclosure about the matter or when inextremely rare circumstances we determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

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 ofthe Act we give in Annexure "A" a statement on matters specified in pharagarph3 and 4 of order to the extent applicable. 2. As required by Section 143 (3) of the Actwe 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 and the Statement of Profit and Loss dealt with by this Reportare in agreement with the books of account;

(d) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

(e) On the basis of the written representations received from the directors as on 31March 2020 and taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 from being appointed as a director in terms of Section164 (2) of the Act;

(f) With respect to report on the adequacy of the Internal Financial Control overfinancial reporting of the Company and the operating effectiveness of such controls referto our report in "Annexure B".

(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 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company does not have any pending litigations on its financial position in itsfinancial statements.

ii. The Company does not have any material foreseeable losses.

iii. The Company does not require to transfer any amount to the Investor Education andProtection Fund.

Dated: 30.06.2020 For P.D.Randar & Co.
Place : Kolkata Chartered Accountants
Kriti Agarwal
Partner
Membership No. 302753
Firm Regn No.319295E
UDIN:- 20302753AAAABP2741

Annexure A to the Independent Auditors' Report

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the members of Daulat Securities Limited of evendate)

I. a) The Company has maintained proper records showing full particulars includingquantative details and situation of its plant property and Equipments.

b) According to the information and explanation given to us the management atreasonable intervals has physically verified the plant Property and Equipments of thecompany and no discrepancies were noticed.

c) There are no immovable property held in the name of company.

II. The Company has maintained proper records of Inventories and physical verificationhave conducted by the management at regular intervals. There were no materialdiscrepancies found.

III. According to the information and explanation given to us the companies hasgranted loan and advances to parties covered in the register maintained under section 189of the companies Act 2013. The Borrowers have been regular in payment of the Interest asstipulated. The terms of arrangements do not stipulate any repayment schedule and theloans are repayable on demand.

IV. In our opinion and according to the information and explanations given to us thecompany has complied with the Provisions of Sections 185 and 186 of the companies Act2013.

V. The Company has not accepted any deposits from the public.

VI. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any of the services rendered by the Company.

VII. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company the company is regular in depositingundisputed statutory dues including provident fund income tax sales tax wealth taxservice tax duty of customs value added tax cess and other material statutory dues. Asexplained to us the Company did not have any dues on account of employees' stateinsurance and duty of excise. According to the information and explanations given to usno undisputed amounts payable in respect of provident fund income tax sales tax wealthtax service tax duty of customs value added tax cess and other material statutory dueswere in arrears as at 31 March 2020 for a period of more than six months from the datethey became payable.

(b) According to the information and explanations given to us there are no dues whichare required to be deposited with the appropriate authorities. VIII. The company had takenSecured Loan from Bank. The Company has not defaulted in repayment of Principle andInterest.

IX. The company did not raise money by way of initial public offer or further publicoffer(including debt instruments) and term loans during the year Accordingly paragraph3(ix) of the Order is not applicable

X. According to the information and explanations given to us no material fraud on orby the company by its officers or employees has been noticed or reported during the courseof our audit.

XI. According to the information and explanations given to us and based on ourexamination of the records of the company the Company has paid for managerialremuneration in accordance with the provisions of Section 197 read with Schedule V to theAct.

XII. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

XIII. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has entered into any transactionswith the related parties in compliance with Sections 177 and 188 of the Act 2013.

XIV. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.

XV. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non cashtransactions with Directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

XVI. The Company not registered under Section 45-IA of the Reserve Bank of India Act1934.

Dated: 30.06.2020 For P.D.Randar & Co.
Place : Kolkata Chartered Accountants
Kriti Agarwal
Partner
Membership No. 302753
Firm Regn No.319295E
UDIN:- 20302753AAAABP2741

ANNEXURE-B TO THE AUDITOR'S REPORT

Report on the Financial Statements of Daulat Securities Limited on the InternalFinancial Controls under Clause(i) of Subsection 3 of Section 143 of the CompaniesAct2013("the Act")

We have audited the internal financial controls over the financial reporting of DaulatSecurities Limited ("the Company") as on 31 March 2020 in conjunction with ouraudit of the 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 Guidance Note on Audit of Internal Financial Controls over Financial Reporting issuedby the Institute of Chartered Accountants of India (‘ICAI').These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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 Companies Act2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialreporting based on our audit. We conducted our audit in accordance with the Guidance Noteon Audit of Internal Financial Controls over Financial Reporting(the "GuidanceNote") and the Standards on Auditing issued by ICAI and deemed to be prescribedunder section 143(10) of the Companies Act2013to the extent applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those standards and Guidance Note require that we comply with the ethicalrequirement s and plan and platform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls over financial reporting was established and maintainedand if such controls operated effectively in all material aspects. Our audit involvesperforming procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls system over financial reporting and their operatingeffectiveness .Our audit 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. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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 ofcost records that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance andtransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and the receipt and expendituresof the company are being made only in accordance with authorisations of management anddirectors of the company; and (3) provide reasonable assurance regarding prevention ortimely detection of unauthorised acquisition use or disposition of the company's assetsthat could have a material effect on the financial statements.

Inherent Limitation 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 to be detected.Also projections of any evaluation of the internal financial controls over financialreporting may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial control system over financial reporting and such internal financial controlssystem over financial reporting were operating effectively as on 31 March2020 based onthe 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 Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India

Dated: 30.06.2020 For P.D. Randar & Co.
Place : Kolkata Chartered Accountants
Kriti Agarwal
Partner
Membership No. 302753
Firm Regn No.319295E
UDIN:- 20302753AAAABP2741