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Equitas Holdings Ltd.

BSE: 539844 Sector: Financials
NSE: EQUITAS ISIN Code: INE988K01017
BSE 00:00 | 26 Nov 121.80 -4.00
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NSE 00:00 | 26 Nov 121.50 -4.25
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OPEN 124.00
PREVIOUS CLOSE 125.80
VOLUME 95144
52-Week high 144.85
52-Week low 58.50
P/E 28.13
Mkt Cap.(Rs cr) 4,163
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 124.00
CLOSE 125.80
VOLUME 95144
52-Week high 144.85
52-Week low 58.50
P/E 28.13
Mkt Cap.(Rs cr) 4,163
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Equitas Holdings Ltd. (EQUITAS) - Auditors Report

Company auditors report

To the Members of Equitas Holdings Limited

Report on the Audit of the Standalone Financial Statements

1. Opinion

We have audited the accompanying Standalone Ind AS Financial Statements of EquitasHoldings Limited (the "Company") which comprise the standalone Balance Sheet asat March 31 2021 the standalone statement of Profit and Loss (including OtherComprehensive Income) the standalone statement of Changes in Equity and the standalonestatement of Cash Flows for the year then ended and notes to the standalone financialstatements including a summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as "Standalone Financial Statements").

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 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 31 March 2021 and its profit(including other comprehensive income) changes in equity and its cash flows for the yearended on that date.

2. Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the ‘Auditor’s Responsibilities for the Audit of the StandaloneFinancial Statements’ section of our report. We are independent of the Company inaccordance with the ‘Code of Ethics’ issued by the Institute of CharteredAccountants of India (ICAI) together with the ethical requirements that are relevant toour audit of the Standalone Financial Statements under the provisions of the Act and theRules there under and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thestandalone financial statements.

3. Emphasis of Matter

We draw attention to Note 2.1 to the accompanying Standalone Financial Statement whichdescribes the extent to which the Covid -19 pandemic will continue to impact theCompany’s operations and financial statements will depend on ongoing and futuredevelopments which are highly uncertain.

Our opinion is not modified in respect of this matter.

4. 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 for the financial yearended March 31 2021. These matters were addressed in the context of our audit of theStandalone Financial Statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. For key matter given below ourdescription of how our audit addressed the matter is provided in that context. We havedetermined the matters described below to be the key audit matters to be communicated inour report.

Key Audit Matters How our audit addressed the key audit matter
Assessment of Impairment of Investment in Equitas Technologies India Private Limited a subsidiary Company
As at March 31 2021 the financial statements of Equitas Technologies Private Limited ("ETPL") a subsidiary Company indicates risk of impairment. The Company’s investments are subject to assessment of impairment which involves significant judgements and assessments including over determination of the amount of impairment provision if any that needs to be recognized. In respect of investments in ETPL where the management determined that there were indicators of impairment we performed the following procedures:
The Company has made investments of Rs. 2400 lakhs (Previous year Rs. 2200 lakhs) in ETPL. In testing for impairment the Company estimates the recoverable value based on: • We reviewed the entity’s process of assessing impairment of its investments.
Revenue and cost forecasts which are affected by ETPL’s expansion plans business and strategic changes underway and the changing competitive environment changes in business / operational models (including in response to COVID-19); and • We tested controls over the value in use of the investment including the significant assumptions inputs calculations methodologies and judgements.
Key assumptions used in the recoverability and valuation assessments (discount rates growth rates macroeconomic assumptions etc.) • We tested the key assumptions used in forecasting revenues and costs having regard to supporting documentation and agreements
Further the economic and business consequences of the COVID-19 pandemic as described in Note 2.1 to the financial statements significant social disruption and disturbance and slowdown of economic activity can have possible implications on the judgements and estimates used in the valuation of the subsidiary. • We assessed understood and tested where relevant the methodology followed by EHL to determine realisable value for valuation of the investment in subsidiary including method of valuations used to assess impairment input data used external market information on market valuation comparable transactions in market space etc.
Due to significance of judgements and estimate used in assessing the impairment provision this audit area is considered a key audit matter. We analyzed and understood the stress in the provisioning considering the overall impact on the estimates used for impairment assessment of investments and on account of the impact of COVID-19 pandemic.
Assessed disclosures included in the standalone financial statements in respect of impairment provision.

5. Other Information

The Company’s Management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Annualreport but does not include the Standalone Financial Statements and our auditor’sreport thereon.

Our opinion on the Standalone Financial Statements does not cover the other informationand we do not express any form of assurance conclusion thereon. In connection with ouraudit of the Standalone Financial Statements our responsibility is to read the otherinformation when it becomes available and in doing so consider whether such otherinformation is materially inconsistent with the Standalone Financial Statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

6. Responsibilities of Management for the Financial Statements

The Company’s Management and Board of Directors are responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these StandaloneFinancial Statements that give a true and fair view of the financial position financialperformance including 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 of theAct.

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 the design implementation and maintenance of adequateinternal financial 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 Standalone Financial Statements the Management and Board of Directorsare responsible 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 the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company’sfinancial reporting process.

7. Auditor’s Responsibilities for the Audit of the Standalone FinancialStatements

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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these Standalone Financial Statements. As part of an auditin accordance with SAs we exercise professional judgment and maintain professionalskepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the StandaloneFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion 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 Company hasadequate internal financial controls with reference to Standalone Financial Statements inplace and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the Standalone Financial Statementsmade by the Management and Board of Directors.

• Conclude on the appropriateness of the Management and Board of Directors use ofthe going 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 Company’s ability 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 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 other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We 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 significance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor’s report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.

8. Other Matters

The Standalone Financial Statements of the Company for the year ended March 31 2020have been audited by the predecessor auditors who expressed their unmodified opinion onthose financial statement on 29th May 2020. We did not audit the Standalone FinancialStatements for the year ended March 31 2020 included in the Standalone FinancialStatements.

Our opinion is not modified in respect of this matter.

9. Report on Other Legal and Regulatory Requirements a. As required by theCompanies (Auditor’s Report) Order 2016 ("the Order") issued by theCentral Government of India in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable. b. As required by Section 143(3) of the Act based on ouraudit we report that:

i. 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;

ii. 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;

iii. The standalone balance sheet the standalone statement of profit and loss(including other comprehensive income) the standalone statement of changes in equity andthe standalone statement of cash flow dealt with by this Report are in agreement with thebooks of account;

iv. In our opinion the aforesaid Standalone Financial Statements comply with the IndAS specified under section 133 of the Act.

v. On the basis of the representations received from the directors as on March 31 2021taken on record by the Board of Directors none of the directors are disqualified as onMarch 31 2021 from being appointed as a director in terms of Section 164(2) of the Act;

vi. With respect to the adequacy of the internal financial controls with reference toStandalone Financial Statements of the Company with reference to these financialstatements and the operating effectiveness of such controls refer to our separate Reportin "Annexure B" to this report;

vii. With respect to the matter to be included in the Auditors’ Report undersection 197(16) of the Act as amended:

In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of section 197 of the Act.

viii. 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:

a. The Company has disclosed the impact of pending litigations as at March 31 2021 onits financial position in its Standalone Financial Statements – Refer to Note 37 tothe Standalone Financial Statements;

b. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses; c. There were no amounts which wererequired to be transferred to the Investor Education and Protection Fund by the Company.

For T R CHADHA & CO LLP

Chartered Accountants

ICAI Firm registration number: 006711N/N500028

per Sheshu Samudrala

Partner

Membership Number: 235031

UDIN: 21235031AAAAAU3581

Place: Chennai

Date: 13.05.2021

‘ANNEXURE A’ to the Independent Auditor’s Report of Even date on theStandalone Financial Statements of Equitas Holdings Limited (the Company) for the yearended March 31 2021

We report that:

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

(b) Fixed Assets have been physically verified by the management during the year and nomaterial discrepancies were identified on such verification.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of the immovable propertiesincluded in investment property are held in the name of the Company.

(ii) The nature of business of the Company does not require to have any physicalinventory. Accordingly the provision of clause 3(ii) of the Order is not applicable tothe Company.

(iii) According to the information and explanations given to us the Company has notgranted loans secured or unsecured to companies firms Limited Liability Partnerships orother parties covered in the register maintained under section 189 of the Act.Accordingly the provision of clause 3(iii) of the Order is not applicable to the Company.

(iv) In our opinion and according to the information and explanations given to us andon the basis of our examination of the records of the Company the Company has compliedwith the provisions of Section 185 and 186 of the Act in respect of grant of loans makinginvestments and providing guarantees and securities as applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposits from the public to which the directives issued by the Reserve Bankof India and the provisions of section 73 to 76 or any other relevant provisions of theAct and the Rules framed there under apply. Accordingly the provision of clause 3(v) ofthe Order is not applicable to the Company.

(vi) The maintenance of cost records has not been specified by the Central Governmentunder section 148 (1) of the Act for the business activities carried out by the Company.Accordingly the provision of clause 3(vi) of the Order is not applicable to the Company.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including provident fund income-taxgoods and services tax cess and other statutory dues have generally been regularlydeposited by the Company with the appropriate authorities. As explained to us the Companydid not have any dues on account of sales tax employee state insurance value added taxduty of custom and duty of excise.

(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund income-tax goods and service tax cess and othermaterial statutory dues were in arrears as at 31st March 2021 for a period of more thansix months from the date they became payable.

(c) According to the information and explanations given to us there are no dues inrespect of goods and service tax customs duty excise duty value added tax and otherstatutory dues applicable to the Company which have not been deposited on account of anydispute.

According to the information and explanations given to us the following dues have notbeen deposited on account of dispute:

Name of the statue Nature of dues Amount ( Rs. in Lakhs) Period to which amount relates Forum where the dispute is pending
The Income Tax Act 1961 Income Tax 207.81 AY 2011-12 Income Tax Appellate Tribunal
The Income Tax Act 1961 Income Tax 852.07 AY 2010-11 Income Tax Appellate Tribunal
The Income Tax Act 1961 Income Tax 118.76 AY 2018-19 Commissioner of Income Tax (Appeals)

(viii) According to the information and explanations given to us and based on recordsof the Company examined by us the Company did not have any outstanding loans or borrowingdues in respect of a financial institution or bank or government or dues to debentureholders during the year.

(ix) According to the information and the explanation given to us the Company has notraised any money by way of initial public offer/ further public offer /debt instrumentsand term loans or loan from Government during the year hence reporting under clause 3(ix)of the Order is not applicable to the Company.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the explanation and information given to us no fraud by the Company or onthe Company by its officers or employees has been noticed or reported during the course ofour audit.

(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 of the Act read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly the provision of clause 3(xii) of the Orderis not applicable.

(xiii) According to the information and explanations given to us and on the basis ofthe examination of the records of the company transactions with the related parties arein compliance with Section 177 and 188 of the Act where applicable and the details havebeen disclosed in the accompanying Standalone Financial Statements as required by theapplicable accounting standards.

(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 under review. Accordingly provision of clause 3(xiv) of the order is notapplicable.

(xv) According to the information and explanations given to us and based on ourexamination of the records during the year the Company has not entered into any non-cashtransactions with directors or persons connected with him. Accordingly provision ofclause 3(xv) of the order is not applicable.

(xvi) According to the information and explanations given to us we report that theCompany has registered as required under Section 45-IA of the Reserve Bank of India Act1934.

For T R CHADHA & CO LLP

Chartered Accountants

ICAI Firm registration number: 006711N/N500028

per Sheshu Samudrala

Partner

Membership Number: 235031

UDIN: 21235031AAAAAU3581

Place: Chennai

Date: 13.05.2021

‘ANNEXURE B’ to the Independent Auditor’s Report of Even date on theStandalone Financial Statements of Equitas Holdings Limited (the Company)

Report on the Internal Financial Controls with reference to the Standalone FinancialStatements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013("the Act")

Opinion

We have audited the internal financial controls with reference to the StandaloneFinancial Statements of Equitas Holdings Limited (the "Company") as of March 312021 in conjunction with our audit of the standalone financial statements of the Companyfor the year ended on that date.

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 controlswith reference to Standalone Financial Statements and such internal financial controlswith reference to Standalone Financial Statements were operating effectively as at March31 2021 based on the internal financial controls with reference to Standalone FinancialStatements 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 (the‘Guidance Note’).

Management’s Responsibility for Internal Financial Controls

The Company’s Management and the Board of Directors are responsible forestablishing and maintaining internal financial controls based on the internal financialcontrols with reference to the Standalone Financial Statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to the Company’spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

Auditor’s Responsibility

Our responsibility is to express an opinion on the Company’s internal financialcontrols with reference to Standalone Financial Statements based on our audit. Weconducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to Standalone Financial Statements. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls with reference to the Standalone Financial Statements were establishedand maintained and whether such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system with reference to Standalone Financial Statementsand their operating effectiveness. Our audit of internal financial controls with referenceto the Standalone Financial Statements included obtaining an understanding of suchinternal financial controls assessing the risk that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditor’s judgmentincluding the assessment of the risks of material misstatement of the Standalone FinancialStatements 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 with reference tothe Standalone Financial Statements.

Meaning of Internal Financial Controls with reference to the Standalone FinancialStatements

A Company’s internal financial control with reference to Standalone FinancialStatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of Standalone Financial Statements for externalpurposes in accordance with generally accepted accounting principles. A Company’sinternal financial controls with reference to Standalone Financial Statements includesthose policies and procedures that

1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Standalone Financial Statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance with authorizations of management and directors of the Company; and

3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company’s assets that could havea material effect on the Standalone Financial Statements.

Inherent Limitations of Internal Financial Controls with reference to StandaloneFinancial Statements

Because of the inherent limitations of internal financial controls with reference toStandalone Financial Statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to Standalone Financial Statements to future periods are subjectto the risk that the internal financial control with reference to Standalone FinancialStatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.

For T R CHADHA & CO LLP

Chartered Accountants

ICAI Firm registration number: 006711N/N500028

per Sheshu Samudrala

Partner

Membership Number: 235031

UDIN: 21235031AAAAAU3581

Place: Chennai

Date: 13.05.2021

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