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IKAB Securities & Investment Ltd.

BSE: 514238 Sector: Financials
NSE: N.A. ISIN Code: INE874A01010
BSE 00:00 | 26 Nov 104.80 4.95
(4.96%)
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NSE 05:30 | 01 Jan IKAB Securities & Investment Ltd
OPEN 104.80
PREVIOUS CLOSE 99.85
VOLUME 3538
52-Week high 104.80
52-Week low 20.00
P/E 8.76
Mkt Cap.(Rs cr) 36
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 104.80
CLOSE 99.85
VOLUME 3538
52-Week high 104.80
52-Week low 20.00
P/E 8.76
Mkt Cap.(Rs cr) 36
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

IKAB Securities & Investment Ltd. (IKABSECURITIES) - Auditors Report

Company auditors report

To

The Members of Ikab Securities & Investment Limited Report on the audit of theInd AS financial statements Opinion

We have audited the accompanying Ind AS financial statements of Ikab Securities &Investment Limited (“the Company”) which comprise the balance sheet as at March31 2021 and the Statement of Profit and Loss including Other Comprehensive Income thestatement of cash flows and the Statement for Changes in Equity for the year then endedand notes to the Ind AS financial statements including a summary of significantaccounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013 (‘Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2021 its profit including othercomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

Basis for opinion

We conducted our audit in accordance with the standards on auditing specified undersection 143(10) of the Companies Act 2013. Our responsibilities under those Standards arefurther described in the auditor's responsibilities for the audit of the Ind AS financialstatements section of our report. We are independent of the Company in accordance with the‘Code of Ethics' issued by the Institute of Chartered Accountants of India togetherwith the ethical requirements that are relevant to our audit of the Ind AS financialstatements under the provisions of the Act and the rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the code ofethics.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

Key audit matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements of the current period. Thesematters were addressed in the context of our audit of the Ind AS financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the Ind AS financial statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks of materialmisstatement of the standalone Ind AS financial statements. The results of our auditprocedures including the procedures performed to address the matters below provide thebasis for our audit opinion on the accompanying Ind AS financial statements.

The manner in which the key audit matters have been addressed is given herein below intabular form:

Key audit matters How our audit addressed the key audit matters
a. Impairment of financial assets (expected credit loss)
Ind AS 109 requires the Company to recognise impairment loss allowance towards its financial assets (designated at amortised cost and fair value through profit & loss) using the expected credit loss (ECL) approach. Such ECL allowance is required to be measured considering the guiding principles of Ind AS 109 including: • We read and assessed the Company's accounting policies for impairment of financial assets and their compliance with Ind AS 109.
• unbiased probability weighted outcome under various scenarios; • We tested the criteria for staging of loans based on their past-due status to check compliance with requirement of Ind AS 109. Tested a sample of performing (stage 1) loans to assess whether any loss indicators were present requiring them to be classified under stage 2 or 3 and vice versa.
• time value of money;
• impact arising from forward looking macro-economic factors and; • We evaluated the reasonableness of the Management estimates by understanding the process of ECL estimation and tested the controls around data extraction and validation.
• availability of reasonable and supportable information without undue costs. • Tested the ECL model including assumptions and underlying computation.
Applying these principles involves significant estimation in various aspects such as: • Assessed the floor/minimum rates of provisioning applied by the Company for loan products with inadequate historical defaults.
• grouping of borrowers based on homogeneity by using appropriate statistical techniques; Audited disclosures included in the Ind AS financial statements in respect of expected credit losses.
• staging of loans and estimation of behavioral life;
• determining macro-economic factors impacting credit quality of receivables;
• estimation of losses for loan products with no/minimal historical defaults.
Considering the significance of such allowance to the overall financial statements and the degree of estimation involved in computation of expected credit losses this area is considered as a key audit matter.
b. Fair Valuation of Investments
The Company's investments (other than investment in Subsidiary and Associates) are measured at fair value at each reporting date and these fair value measurements significantly impact the Company's results. Within the Company's investment portfolio the valuation of certain assets such as unquoted equity and bonds requires significant judgement as a result of quoted prices being unavailable and limited liquidity in these markets. We have assessed the Company's process to compute the fair value of various investments. For quoted instruments we have independently obtained market quotations and recalculated the fair valuations. For the unquoted instruments we have obtained an understanding of the various valuation methods used by management and analysed the reasonableness of the principal assumptions made for estimating the fair values and various other data used while arriving at the fair value measurement.

Information other than the Ind AS financial statements and auditors' report thereon

The Company's board of directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexures to Board's Report Business Responsibility Report but does notinclude the Ind AS financial statements and our auditor's report thereon.

Our opinion on the Ind AS financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.

In connection with our audit of the Ind AS financial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the standalone Ind AS financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's responsibility for the Ind AS financial statements

The Company's board of directors are responsible for the matters stated in section134(5) of the Act with respect to the preparation of these Ind AS financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the accountingstandards specified under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the Ind AS financial statements management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of directors are also responsible for overseeing the Company's financialreporting process.

Auditor's responsibilities for the audit of the Ind AS financial statements

Our objectives are to obtain reasonable assurance about whether the Ind AS financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Ind AS 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 Ind AS 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Ind AS 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 Ind AS financialstatements including the disclosures and whether the Ind AS financial statementsrepresent 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 Ind AS financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's report unless law or regulation precludes public disclosure about the matteror 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.

Report on other legal and regulatory requirements

As required by the Companies (Auditor's Report) Order 2016 (“the Order”)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Companies Act 2013 we give in the Annexure “I” a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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 balance sheet the statement of profit and loss including the statement ofother comprehensive income the cash flow statement and statement of changes in equitydealt with by this report are in agreement with the books of account;

(d) In our opinion the aforesaid Ind AS financial statements comply with theaccounting standards specified under section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015;

(e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the board of directors none of the directors is disqualifiedas on March 31 2021 from being appointed as a director in terms of Section 164 (2) of theAct;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Ind AS financial statements and theoperating effectiveness of such controls refer to our separate Report in ‘AnnexureII' to this report; and

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us;

a. The Company has no pending litigations that impact on its financial position;

b. The Company did not have any long-term contracts including derivative contracts forwhich there could be any material foreseeable losses; and

c. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For A. V. AROLKAR & CO.
Chartered Accountants
Firm Registration No: 100542 W sd/-
Abhay Vasant Arolkar
Partner
Membership No.: 32453
UDIN : 21032453AAAADD5391
Place : Mumbai
Date : 23-06-2021

Annexure I to the Independent Auditors' Report

The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the standalone Ind AS financial statements for the year ended 31 March 2021 wereport that:

I. According to the information and explanations given to us

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 in a phased manner over a period of three years.In accordance with this programme certain fixed assets were verified during the year andno material discrepancies were noticed on such verification. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets.

c. We were informed that the company doesn't own any immovable property. Hence thisclause is not applicable.

II. The Company is a financing and investing company accordingly does not hold anyphysical inventories. Thus paragraph 3(ii) of the Order is not applicable.

III. According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms or other parties covered inthe register maintained under section 189 of the Companies Act 2013. Accordingly theprovisions of clause 3(iii)(a) and (b) of the Order are not applicable to the Company andhence not commented upon.

IV. In our opinion and according to the information and explanations given to us theCompany has not granted any loans and made any investments with the companies or partiescovered under Sections 185 and 186 of the Act.

V. The Company has not accepted deposits during the year and does not have anyunclaimed deposits as at March 31 2021 and therefore the provisions of the clause 3 (v)of the Order are not applicable to the Company.

VI. To the best our knowledge and according to the information and explanations givento us the Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act in respect of the services rendered by the Company.

VII. According to the information and explanations given to us in respect of statutorydues:

a. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company is regular in depositing undisputed statutorydues amounts deducted/ accrued in the books of account in respect of undisputed statutorydues including income tax provident fund employees state insurance fund and othermaterial statutory dues have been regularly deposited during the year by the Company withthe appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of income tax provident fund employees state insurance fund and othermaterial statutory dues were in arrears as at March 31 2021 for a period of more than sixmonths from the date they became payable.

b. According to the information and explanations given to us and based on the recordsof the company examined by us there are no disputed dues of Income tax provident fundemployees state insurance fund and other material statutory dues payable by the company ason 31st March 2021.

VIII. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingto financial institutions banks Government and dues to debenture holders.

IX. In our opinion and according to the information and explanations given to us themonies raised by way of Debentures and term loans have been applied on an overall basisfor the purposes for which they were obtained. The Company has not raised any monies byway of initial public offer and any other further public offer (including debtinstruments).

X. According to the information and explanations given to us no material fraud on orby the Company has been noticed or reported during the course of our audit.

XI. In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act

XII. The Company is not a Nidhi Company and hence reporting under clause 3(xii) of theOrder is not applicable.

XIII. In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 177 and 188 of the Act where applicable for alltransactions with the related parties and the details of related party transactions havebeen disclosed in the standalone Ind AS financial statements as required by the applicableIndian accounting standards.

XIV. According to the information and explanations given to us the Company has notmade any private placement of shares or fully or partly convertible debentures during theyear

XV. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its Directors and hence provisions of Section 192 of theAct are not applicable.

XVI. According to the information and explanation given to us the Company isregistered as required under Section 45-IA of the Reserve Bank of India Act 1934.

For A. V. AROLKAR & CO.
Chartered Accountants
Firm Registration No: 100542 W
Sd/-
Abhay Vasant Arolkar
Partner
Membership No.: 32453
UDIN : 21032453AAAADD5391
Place : Mumbai
Date : 23-06-2021

Annexure II to the Independent Auditors' Report

Annexure II referred to in paragraph 2(f) under the heading ‘Report on other legaland regulatory requirements' of our report of even date

Report on Internal Financial Controls under Clause (i) of sub-section 3 of section 143of the Companies Act 2013 (the ‘Act')

We have audited the internal financial controls over financial reporting IkabSecurities & Investment Ltd. (the ‘Company') as of 31 March 2021 in conjunctionwith our audit of the standalone Ind AS financial statements of the Company for the yearended on that date.

Management's responsibility for internal financial controls

The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditor's responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these standalone Ind AS financialstatements based on our audit. We conducted our audit in accordance with the Guidance Noteon Audit of Internal Financial Controls Over Financial Reporting (the ‘GuidanceNote') and the Standards on Auditing as specified under section 143(10) of the Act to theextent applicable to an audit of internal financial controls and both issued by theInstitute of Chartered Accountants of India. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting with reference to these standalone Ind AS financial statements was establishedand maintained and if such controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to thesestandalone Ind AS financial statements and their operating effectiveness. Our audit ofinternal financial controls over financial reporting included obtaining an understandingof internal financial controls over financial reporting with reference to these standaloneInd AS financial statements 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 judgement includingthe assessment of the risks of material misstatement of the financial statements whetherdue 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 over financialreporting with reference to these standalone Ind AS financial statements.

Meaning of internal financial controls over financial reporting with reference to theseStandalone Ind AS Financial Statements

A Company's internal financial control over financial reporting with reference to thesestandalone Ind AS financial statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A Company's internal financial control over financial reportingwith reference to these standalone Ind AS financial statements includes those policies andprocedures that:

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

ii. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorisations of Management and Directors of the Company; and

iii. provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.

Inherent limitations of internal financial controls over financial reporting withreference to these standalone Ind AS Financial Statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these standalone Ind AS financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these standalone Ind AS financial statements to future periods are subject to the riskthat the internal financial control over financial reporting with reference to thesestandalone Ind AS financial statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls over financial reporting with reference to these standalone Ind ASfinancial statements and such internal financial controls over financial reporting withreference to these standalone Ind AS financial statements were operating effectively as at31 March 2021 based on the internal control over financial reporting criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls over Financial Reporting issued bythe Institute of Chartered Accountants of India.

For A. V. AROLKAR & CO.
Chartered Accountants
Firm Registration No: 100542 W
Sd/-
Abhay Vasant Arolkar
Partner
Membership No.: 32453
UDIN : 21032453AAAADD5391
Place : Mumbai
Date : 23-06-2021

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