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ICICI Securities Ltd.

BSE: 541179 Sector: Financials
NSE: ISEC ISIN Code: INE763G01038
BSE 00:00 | 23 Jul 725.90 -18.45
(-2.48%)
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759.00

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NSE 00:00 | 23 Jul 725.45 -18.35
(-2.47%)
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OPEN 749.00
PREVIOUS CLOSE 744.35
VOLUME 112225
52-Week high 802.05
52-Week low 357.00
P/E 19.79
Mkt Cap.(Rs cr) 23,416
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 749.00
CLOSE 744.35
VOLUME 112225
52-Week high 802.05
52-Week low 357.00
P/E 19.79
Mkt Cap.(Rs cr) 23,416
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

ICICI Securities Ltd. (ISEC) - Auditors Report

Company auditors report

To the Members of ICICI Securities Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

OPINION

We have audited the standalone financial statements of ICICI Securities Limited("the Company") which comprise the standalone balance sheet as at 31 March2020 and the standalone statement of profit and loss (including other comprehensiveincome) standalone statement of changes in equity and standalone statement of cash flowsfor the year then ended and notes to the standalone financial statements including asummary of the significant accounting policies 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 ("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 comprehensiveloss changes in equity and its cash flows for the year ended on that date.

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 Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the Standalone financial statements.

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.

Description of Key Audit matter
Key audit matter How the matter was addressed in our audit
Information Technology (IT)
It systems and controls Our audit procedures to assess the IT systems and controls included the following:
The Company's key financial accounting and reporting processes are dependent on the automated controls in information systems such that there exists a risk that gaps in the IT control environment could impact the financial accounting and reporting significantly. The Company uses SAP system for its overall financial reporting. Testing the design of General IT Controls (GITCs) for the audit period which included controls over access to program and data program changes system changes program development computer operations (job processing data backup system backup incident management) over financial accounting and reporting systems and related IT systems (referred to as ‘in-scope systems').
The Company's General Ledger system used in financial reporting is interfaced with other IT systems which process transactions of account relevant for financial reporting. Testing the operating effectiveness of GITCs for the audit period over the in-scope systems as follows:
We have focused on user access management change management segregation of duties system reconciliation controls and system application controls over key financial accounting and reporting systems. • User access creation modification and revocation process;
• User access review process;
• Segregation of duties;
• password policies;
• Application change management procedures; and
• Computer Operations process (automated job processes backups and incident management).
• Understanding IT application controls for the audit period for significant accounts testing interfaces reports reconciliations and system processing for significant accounts determined by us during our risk assessment. We tested the controls to determine that these controls remained unchanged during the audit period and incase of changes were changes followed the standard change management process.
• Understanding IT infrastructure records for the in- scope systems i.e. operating systems and databases. Based on procedures performed above wherever required we extended our audit procedures over other IT application controls periodic reconciliations manual approval processes tests on identified key changes and additional substantive testing.

OTHER INFORMATION

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon.

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 our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

MANAGEMENT'S AND BOARD OF DIRECTOR'S RESPONSIBILITY FOR THE STANDALONE FINANCIALSTATEMENTS

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the state of affairs profit/loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the standalone financial statements that give atrue and fair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements Management and Board of Directors areresponsible 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.

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

AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

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

• Identify and assess the risks of material misstatement of the 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 financial statements in place andthe 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 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 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 auditors' report unless law or regulation precludes public disclosure about thematter or when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

REPORTON OTHER LEGALANDREGULATORY REQUIREMENTS

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government 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.

(A) As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit;

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

c) The standalone balance sheet the standalone statement of profit and loss (includingother comprehensive income) the standalone statement of changes in equity and thestandalone statement of cash flows dealt with by this Report are in agreement with thebooks of account;

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under section 133 of the Act;

e) On the basis of the written representations received from the directors as on 31March 2020 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 the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B";

(B) With respect to the other matters to be included in the Auditors' 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 has disclosed the impact of pending litigations as at 31 March 2020 onits financial position in its standalone financial statements - Refer Note 33 to thestandalone financial statements;

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

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company;

iv. The disclosures in the standalone financial statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2020.

(C) With respect to the matter to be included in the Auditors' Report under section197(16):

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. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

For B S R & co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
MILIND RANADE
Partner
Place: Mumbai Membership No: 100564
Date: 7 May 2020 UDIN: 20100564AAAADP9911

Annexure A to the Independent Auditor's Report of even date on the Standalone financialStatements of ICICI Securities limited

The Annexure referred to in the Independent Auditor's Report to the members of ICICISecurities Limited (the "Company") on the standalone financial statements forthe year ended 31 March 2020 we report that:

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

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all the fixed assets are verified at the end of the financial year. In our opinionthis periodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. No material discrepancies were noticed on suchverification.

(c) The Company does not have any immovable properties. Accordingly para 3(i) (c) ofthe Order is not applicable to the Company.

ii. The Company does not hold any securities in physical form. The securities for tradeheld in dematerialized form are verified with the statement of holding received bymanagement from the custodian at regular intervals. No material discrepancies were noticedon such verification.

iii. 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. Accordingly para 3(iii) of the Order is not applicable.

iv. In our opinion and according to the information and explanations given to us theCompany has not granted any loans made investments or provided guarantees and securitiesunder Section 185 of the Act. The Company has complied with the provisions of Sections 186of the Companies Act 2013 in respect of grant of loans and making investments. TheCompany has not provided any guarantees and securities. Accordingly para 3(iv) of theOrder is not applicable to that extent.

v. According to the information and explanation given to us the Company has notaccepted any deposits from the public to which directives issued by Reserve Bank of Indiaand the provisions of Section 73 to Section 76 or any other relevant provisions of the Actand the rules framed thereunder apply. Accordingly para 3(v) of the Order is notapplicable.

vi. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any services rendered by the Company. Accordinglyparagraph 3(vi) of the Order is not applicable.

vii. (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance income tax service tax value added tax goods and service tax cess and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities. As explained to us the Company did not have any dues onaccount of duty of sales tax customs and duty of excise.

According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax service taxvalue added tax goods and service tax cess and other material statutory dues were inarrears as at 31 March 2020 for a period of more than six months from the date they becamepayable.

(b) According to the information and explanations given to us the following duesoutstanding of income tax service tax value added tax and stamp duty have not beendeposited by the Company on account of disputes:

Name of the statute Nature of dues Amount Period to which the amount relates Forum where dispute is pending
(in Rs million)
Income Tax Act 1961 Income tax (including interest but excluding penalty) 516.1 Financial Year ("FY") 2010-2011 FY 2012- 2013 & FY 13-14 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income tax (including interest but excluding penalty) 142.1 FY 2000-2001 to FY 2009-2010 Commissioner of Income Tax
Income Tax Act 1961 Income tax (including interest but excluding penalty) 0.5 FY 2007-2008 to FY 2009-2010 Commissioner of Income Tax - TDS
Service Tax Service tax (excluding interest and including penalty) 258.6 FY 2006-2007 to FY 2014-2015 Commissioner of Service Tax
Service Tax Service tax (including interest and penalty) 356.8 Aug 2012 to Sep 2014 Central Excise & Service Tax Appellate Tribunal
Service Tax Service tax (excluding interest and including penalty) 6.7 FY 2008-2009 Central Excise & Service Tax Appellate Tribunal
Maharashtra Value Added Tax 2002 Value added tax (including interest & penalty) 2.2 FY 2008-2009 and FY 2016-17 Commissioner of VAT (Appeals)
Rajasthan Stamp Duty Stamp Duty 3.3 FY 2005-06 and FY 2006-07 Office of registration and stamps Jaipur Rajasthan

viii. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of loans or borrowings to financialinstitutions and banks. The Company did not have any borrowings from Government ordebenture holders during the year.

ix. In our opinion and according to the information and explanations given to us themonies raised by way of debt instruments in the nature of commercial paper by the Companyhave been applied for the purpose for which they were raised. The Company did not raisemoney by way of further public offer.

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 information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe year.

xi. According to the information and explanations give to us and based on ourexamination of the books and records of the Company the Company has paid / provided formanagerial remuneration in accordance with the requisite approvals prescribed by theprovisions of section 197 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 paragraph 3(xii) of the Order is notapplicable.

xiii. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company all transactions with the related parties arein compliance with section 177 and 188 of the Act where applicable and the details havebeen disclosed in the standalone financial statements as required by the applicableIndian accounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the books and records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year under review. Accordingly paragraph 3(xiv) of the Order is notapplicable.

xv. According to the information and explanations given to us and based on ourexamination of the books and records of the Company the Company has not entered into anynon-cash transactions with directors or persons connected with him. Accordingly paragraph3(xv) of the Order is not applicable.

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

For B S R & co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Milind Ranade
Partner
Place: Mumbai Membership No: 100564
Date: 7 May 2020 UDIN: 20100564AAAADP9911

Annexure "B" to the Independent Auditors' Report of even date on theStandalone financial Statements of ICICI Securities limited

Report on the internal financial controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 (Referred to in paragraph 1(A)(f) under ‘Report on Other Legal andRegulatory Requirements' section of our report of even date)

OPINION

We have audited the internal financial controls with reference to financial statementsof ICICI Securities Limited ("the Company") as of 31 March 2020 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2020 based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").

MANAGEMENT'S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013 (hereinafter referred to as"the Act").

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing 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 standalone financial statements whether due to fraud orerror.

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 withreference to financial statements.

MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIAL STATEMENTS

A company's internal financial controls with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlswith reference to financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO FINANCIALSTATEMENTS

Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

For B S R & co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Milind Ranade
Partner
Place: Mumbai Membership No: 100564
Date: 7 May 2020 UDIN: 20100564AAAADP9911

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