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IIFL Securities Ltd.

BSE: 542773 Sector: Financials
NSE: IIFLSEC ISIN Code: INE489L01022
BSE 00:00 | 03 Dec 88.65 -2.30
(-2.53%)
OPEN

93.25

HIGH

93.25

LOW

87.60

NSE 00:00 | 03 Dec 88.75 -2.30
(-2.53%)
OPEN

91.95

HIGH

91.95

LOW

87.35

OPEN 93.25
PREVIOUS CLOSE 90.95
VOLUME 52389
52-Week high 128.55
52-Week low 41.95
P/E 14.75
Mkt Cap.(Rs cr) 2,691
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 93.25
CLOSE 90.95
VOLUME 52389
52-Week high 128.55
52-Week low 41.95
P/E 14.75
Mkt Cap.(Rs cr) 2,691
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

IIFL Securities Ltd. (IIFLSEC) - Auditors Report

Company auditors report

To the Members of

IIFL Securities Limited

Report on the Audit of the Standalone Ind AS financial statements

Opinion

We have audited the standalone Ind AS financial statements of IIFLSecurities Limited which comprise Balance Sheet as at 31st March 2021 the Statement ofProfit and Loss Statement of Changes in Equity and Statement of Cash Flows for the yearthen ended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 (the "Act") in the manner so required and give a trueand fair view in conformity with Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 profit comprehensive incomechanges in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance withthe Standards on Auditing (SAs) specified under section 143(10) of the Companies Act2013. Our responsibilities under those Standards are further described in theAuditor's Responsibilities for the Audit of the financial statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India ("ICAI") together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics.We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion on the financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.total We have not determined any key audit matters for the Company. We havedetermined the matters described below to be the key audit matters to be communicated inour report.

Key Audit Matter Response to Key Audit Matter
Information technology (IT) systems used in financial reporting process.
The company's operational and financial processes are dependent on IT systems due to large volume of transactions that are processed daily. We obtained an understanding of the Company's IT control environment relevant to the audit.
We therefore identified IT systems and controls over financial reporting as a key audit matter for the Company. We tested the design implementation and operating effectiveness of the Company's General IT controls over the key IT systems which are critical to financial reporting.
We also tested key automated and manual controls and logic for system generated reports relevant to the audit that would materially impact the financial statements.
In addition to above we have also relied on the work of the internal auditors and system auditors.

Information Other than the Financial Statements and Auditor'sReport Thereon

The Company's Board of Directors is responsible for thepreparation of the other information. The other information comprises the informationincluded in the Board's Report including Annexures to Board's Report but doesnot include the financial statements and our auditor's report thereon.

Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated.

If based on the work we have performed on the other informationobtained prior to the date of this auditor's report we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of Management and Those Charged with Governance forthe Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the accounting principles generally accepted in India including theIndian accounting standards specified under Sec 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 wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and doubt on the Company's fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless the management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing theCompany's financial reporting process. statements

Auditor's Responsibilities for the Audit of the FinancialStatements

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due toauditfindingsfraud or error and to issue an auditor's report that includes ouropinion.deficiencies in internal control that we Reasonable assurance is a high level ofassurance but is not a guarantee that an audit conducted in accordance with SAs willalways detect a material misstatement when it exists. Misstatements can arise from fraudor error and are considered material if individually or in the aggregate they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese 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 the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal financial controls relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating 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 the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that ability may cast significant tocontinue as a going concern. If we conclude that a material uncertainty exists we arerequired to draw attention in our auditor's report to the related disclosures in thefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

Evaluate the overall presentation structure and content of thefinancialstatements including the disclosures represent the and whether the financialunderlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant identify anysignificant during our audit.

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 financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

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 in terms of Section 143(11) ofthe Act we give in "Annexure A" a statement on the matters specified and 4 ofthe Order to the extent applicable.

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 our auditof the financial statements.

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 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of changes in Equity and the Statement of Cash Flowsdealt with by this Report are in agreement with the books of account maintained for thepurpose or preparation of the financial statements.

d) In our opinion the aforesaid financial statements comply with theInd AS specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of 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".

g) With respect to the other matters to be included in theAuditor's Report in accordance with the requirements of section 197(16) of the Actas amended:

In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its managing directorduring the year is in accordance with the in paragraphs 3 provisions of section 197 of theAct.

h) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

(i) The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements- Refer Note No 30 of the financialstatements.

(ii) The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

(iii) There were no amounts which were required to be transferred tothe Investor Education and Protection Fund by the Company.

Annexure A

to the Independent Auditor's Report

Annexure referred to in our report of even date to the members of IIFLSecurities Limited on the accounts for the year ended 31st March 2021

(i) (a) The company is maintaining proper records showing fullparticulars including quantitative details and situation of fixed assets.

(b) As explained to us the Company has a phased assets once programmeof verification in 3 years which in our opinion is reasonable considering the size of theCompany and nature of its fixed assets. Based on the information and of the explanationgiven to us and on verification records of the Company no material discrepancies wereobserved on such verification.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties which are freehold are held in the name of the Company.

(ii) The Company is not carrying on any trading or manufacturingactivity. Therefore Para 3(ii) of the Order is not applicable to the Company

(iii) The Company has granted loans unsecured to 7 companies coveredin the register maintained under Section 189 of the Companies Act 2013:

(a) In our opinion the rate of interest and other terms and conditionson which the loans had been granted to the Companies were not prima facie prejudicial tothe interests of the Company;

(b) The borrowers have been regular in the payment of the principal andinterest as stipulated;

(c) There are no overdue amounts as at the balance sheet date inrespect of these loans.

(iv) According to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Act with respect tothe loans investments guarantees and securities made as applicable.

(v) The Company has not accepted any deposits from the public withinthe meaning of Section 73 to 76 or any other relevant provisions of the Act and Rulesframed thereunder. We are informed that no order has been passed by the Company Law Boardor National Company Law Tribunal or Reserve Bank of India or any court or other tribunal.

(vi) According to the information and explanations given to us inrespect of the class of industry the company falls under the Central Government has notprescribed the maintenance of cost records under Section 148(1) of the Act. Thereforeparagraph 3(vi) of the Order is not applicable to the Company.

(vii) (a) According to the information and explanations given to us theCompany is generally regular in depositing undisputed statutory dues including providentfund employees state insurance income tax service tax sales tax value added taxgoods and services tax cess and other statutory dues as applicable to the Company withthe appropriate authorities. Further as explained there are no undisputed statutory duesoutstanding for more than six months as at 31st March 2021 from the date they becamepayable;

(b) According to the information and explanations given to us andrecords of the Company examined by us there are no cases of non-deposit of disputed duesof income tax or sales tax or goods and services tax or duty of customs or duty of excise.However according to the information and explanations given to us the following dues ofservice tax has not been deposited by the Company on account of dispute:

Nature of the Statute Nature of the Dispute Amount of Tax (Rs. in Millions) Period to which amount relates Forum where dispute is pending
Service Tax 1994 Service Tax on Delayed Payment Charges Rs. 283.04 Outstanding out of total demand of Rs. 290.79 01.04.214 to 31.03.2016 CESTAT
Service Tax 1994 Service Tax on FII - Brokerage Rs. 114.17 Outstanding out of total demand of Rs. 118.11 01.04.214 to 30.09.2014 CESTAT

(viii) According to the information and explanation given to us andbased on our audit procedures the company has not defaulted in repayment of loans tobanks. The Company has not taken any loans or borrowings from Government or financialinstitutions and did not have any dues to debenture holders.

(ix) According to the information and explanations given to us theCompany has not raised any moneys by way of initial public offer or further public offer(including debt instruments) and term loans during the year.

(x) According to the information and explanations given to us andbased on the audit procedures performed and the representations obtained from themanagement we report that no fraud by the company or on the Company by its officers oremployees having a material misstatement on the financial statements has been noticed orreported during the period under audit.

(xi) According to the information and explanations given to us andbased on verification of records the managerial remuneration has been paid in accordancewith the requisite approvals mandated by the provisions of section 197 read with ScheduleV of the Companies Act 2013.

(xii) In our Opinion and according to the information and explanationsgiven to us the Company is not a Nidhi Company and hence clause (xii) of the order is notapplicable to the Company.

(xiii) According to the information and explanation given to us andbased on verification of the records and approvals of the Audit Committee alltransactions with the related parties are in compliance with sections 177 and 188 ofCompanies Act 2013 where applicable and the details have been disclosed in the FinancialStatements etc. as required 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 explanations given to us thecompany has not entered into any non-cash transactions with directors or persons connectedwith him. Therefore paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) According to the information and explanations given to us thecompany is not required to be registered under Sec 45-IA of the Reserve Bank of India Act1934.

Annexure B to the Independent Auditor's Report

Annexure referred to in our report of even date to the members of IIFLSecurities Limited on the standalone accounts for the year ended 31st March2021 Report on the Internal Financial Controls under Clause (i) of Sub-section 3 ofSection 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over reporting of IIFLSecurities Limited ("the Company") as of March 31st 2021 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

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 Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India.

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.

Auditors' Responsibility

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 judgement including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror.

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 financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial controlover 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 financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; 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 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 reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For V. Sankar Aiyar & Co.
Chartered Accountants
(FRN 109208W)
(G.SANKAR)
Place: Mumbai (M.No.46050)
Date: May 04 2021 UDIN:

.