TO THE MEMBERS OF DOLAT INVESTMENTS LTD.
REPORT ON AUDIT OF STANDALONE FINANCIAL STATEMENTS
We have audited the accompanying standalone financial statements ofDolat Investments Limited (the company') which comprise the balance sheet as at 31March 2021 and the Statement of Profit and Loss (including Other Comprehensive Income)the cash flow statement and the Statement of changes in Equity for the year then endedand a summary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31st March 2021 and its profit totalcomprehensive income the changes in equity and its cash flows for the year ended on thatdate.
BASIS FOR OPINION
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs] specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the Standalone Financial Statementssection of our report. We are independent of the company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theindependence requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules made there under and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We
believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone financialstatements.
KEY AUDIT MATTERS
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements of thecurrent period. These matters were addressed in the context of our audit of the standalonefinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.
Key audit Matter -
Accounting and Valuation of Bank Deposits
The Company's investment under Bank Deposits grouped under OtherFinancial Assets and Cash and Cash Equivalentas on 31/03/2021 amount to Rs 42350 lakhswhich comprises 84.48 % of total assets of the Company. Considering the high value of thisitem of asset it has been considered as a key audit matter.
How our audit addressed the key audit matter
We obtained an understanding of the internal controlsdesigned by the management for accounting and valuation and tested the operatingeffectiveness these controls.
We undertook substantive audit procedures like inspectionrecalculation and reperformance.
We performed procedures to identify encumbrances on theseinvestments and verified sufficiency and appropriateness of disclosures regarding thesame.
We performed procedures to verify adherence to IND-AS.
Key audit Matter - Valuation of Financial Instruments
The derivative financial assets amount to Rs 983.23 lakhs andderivative financial liabilities amount to
Rs 1376.30 lakhs. We focused on this because of the number ofcontracts their measurement and the complexity related to fair value estimation.
How our audit addressed the key audit matter
We obtained an understanding of management's process andevaluated design and tested operating effectiveness of controls around existence andmeasurement of derivative financial instruments.
Reconciling derivative financial instruments data with datareceived from independent third parties.
Considering the appropriateness of disclosures in relation tofinancial risk management and derivative financial instruments.
INFORMATION OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITORSREPORT THEREON
The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Management Discussion and Analysis Board's Report includingAnnexures to Board's Report Business Responsibility Report Corporate Governance andShareholder's Information but does not include the standalone financial statements andour auditor's report thereon.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.
If based on the work we have performed we conclude that thereis a material misstatement of this other information we are required to report that fact.We have nothing to report in this regard.
MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE FINANCIALSTATEMENTS
The Company's Board of Directors is responsible for the mattersstated in Section 134(5) of the Companies Act 2013 ("the Act") with respect tothe preparation and presentation of these standalone financial statements that give a trueand fair view of the financial position financial performance including othercomprehensive income cash flows and changes in the equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards(Ind AS) prescribed under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the company and for preventing and detecting frauds andother irregularities; selection and applications of appropriate accounting policies;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 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 Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so. Those Board of Directorsare also responsible for overseeing the Company's financial reporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONEFINANCIAL STATEMENTS
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal controls.
Obtain an understanding of internal financial controls relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls systemin place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the ability of the company to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the standalone financial statements or if suchdisclosures are inadequate to modify our opinion. Our conclusions are based on the auditevidence obtained up to the date of our auditor's report. However future events orconditions may cause the company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Obtain sufficient appropriate audit evidence regarding thestandalone financial information of business activities within the company to express anopinion on the standalone financial statements. We are responsible for the directionsupervision and performance of the audit of the standalone financial statements of suchentities.
We believe that the audit evidence obtained by us is sufficientand appropriate to provide a basis for our audit opinion on the standalonefinancial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Due to COVID-19 pandemic and lockdown & other restrictions imposedby the Government and local authorities the audit process carried out subsequent tocommencement of lockdown was based on the remote access and evidence shared digitally. Ouropinion is not modified in respect of this matter.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central
Government of India in terms of sub-section (11) of section 143 of theAct we give in the Annexure A a statement on the matters specified in the paragraphs 3and 4 of 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 explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b. in our opinion proper books of account as required by law have beenkept by the company so far as it appears from our examination of those books;
c. the balance sheet statement of profit and loss including othercomprehensive income statement of changes in equity and the cash flow statement dealtwith by this Report are in agreement with the books of account;
d. in our opinion the aforesaid standalone financial statements complywith the Indian Accounting Standards specified under section 133 of the Act.
e. on the basis of the written representations received from thedirectors as on 31 March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 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 overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate report in "Annexure B"; and
g. with respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 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 impactits financial position. - Refer Note No.29 of Notes to Accounts for other litigations.
ii. the Company did not have any long term contract includingderivative contract; as such the question of commenting on any material foreseeable lossesthereon does not arise;
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
ANNEXURE - A TO THE AUDITORS' REPORT
The Annexure referred to in our Auditors' Report to the members ofthe Company on the standalone Financial Statements for the year ended 31st March2021 we report that:
i. a. The company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.
b. The fixed assets have been physically verified by the management asper a phased programme of verification. In our opinion the frequency of verification isreasonable having regard to the size of the company and the nature of its assets. Nomaterial discrepancies were noticed on such physical verification.
c. According to the information and explanations received by us as thecompany does not own immovable properties the requirement on reporting whether titledeeds of immovable properties held in the name of the company is not applicable.
ii. In respect of Inventories:
Company holds Inventory in nature of shares and securities.
In our opinion and according to the information and explanations givento us and on the basis of our examination of the records of inventory the Company hasmaintained proper records of inventory and there were no material discrepancies noticed ascompared to the book records.
iii. The Company has not granted any loans secured or unsecured tocompanies firms limited liabilities partnership or other parties covered in the registermaintained under section 189 of the Companies Act 2013 and therefore para 3(iii) of theOrder is not applicable.
iv. In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 185 and 186 of theAct with respect to the loans and investments made.
v. According to the information and explanation given to us and on thebasis of our examination of the records of the company the company has not accepted anydeposits from the public.
vi. The Central Government has not prescribed the maintenance of costrecords under section 148(1) of the Act for any of the services rendered by the Company.
vii. a. According to the information and explanation given to us and onthe basis of our examination of the records of the Company the Company is regularin depositing with appropriate authorities undisputed statutory dues including providentfund employees state insurance income tax (including TDS) GST and other statutory duesapplicable to it.
b. According to information and explanations given to us no undisputedamounts payable in respect of provident fund employees state insurance income tax(including TDS) GST and other statutory dues were in arrears as at 31 March 2021 for aperiod of more than six months from the date they became payable.
c. According to the information and explanations given to us there areno material dues including provident fund employees state insurance TDS and otherstatutory dues which have not been deposited with the appropriate authorities on accountof any dispute.
viii. The Company does not have any loans or borrowings from anyfinancial institution banks government or debenture holders during the year.Accordingly paragraph 3(viii) of the Order is not applicable.
ix. The Company did not raise any money by way of initial public offeror further public offer (including debt instruments) and term loans during the year.Accordingly paragraph 3(ix) of the Order is not applicable.
x. According to the information and explanations given to us nomaterial fraud by company or on the Company by its officers or employees has been noticedor reported during the course of our audit.
xi. According to the information and explanations give to us and basedon our examination of the records of the Company the Company has paid / provided formanagerial remuneration in accordance with the requisite approvals mandated by theprovisions of section 197 read with Schedule V to the Act.
xii. In our opinion and according to the information and explanationsgiven to us the Company is not a nidhi company. Accordingly paragraph 3(xii) of theOrder is not applicable.
xiii. According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with sections 177 and 188 of the Act where applicable anddetails of such transactions have been disclosed in the standalone financial statements asrequired by the applicable accounting standards.
xiv. According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year.
xv. According to the information and explanation given to us and basedon our examination of the records of the Company the Company has not entered intonon-cash transactions with directors or persons connected with him. Accordingly paragraph3(xv) of the Order is not applicable.
xvi. According to the information and explanation provided to us andbased on our examination of the records of the company the company is a member of theNational Stock Exchange and hence it is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.
ANNEXURE - B TO THE AUDITORS' REPORT
REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (i) OFSUB-SECTION 143 OF THE COMPANIES ACT 2013 ("the Act")
We have audited the internal financial controls over financialreporting of Dolat Investments Limited ('the company') as of 31 March 2021 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS
The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India(ICAI'). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") and the Standards on Auditing issuedby ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our Audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system over financial reporting.
MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING
A company's internal financial control over financial reporting isa process designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of standalone financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internalfinancial control over financial reporting includes those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of thecompany are being made only in accordance with authorisations of management and directorsof the company; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assetsthat could have a material effect on the standalone financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIALREPORTING
Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2021 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.
|UDIN: 21164370AAAADC8951 ||For V. J. Shah & Co. Chartered Accountants |
| ||Firm Registration No.: 109823W |
| ||Chintan V. Shah |
|Place: Mumbai ||Partner |
|Date: 18th May 2021 ||Membership No.: 164370 |