To the Members of Kartik Investments Trust Limited Report on the Ind AS FinancialStatements Opinion
We have audited the accompanying Ind AS financial statements of Kartik InvestmentsTrust Limited {"the Company") which comprises the Balance Sheet as at March 312022 the Statement of Profit and Loss the Statement of Changes in Equity and theStatement of Cash Flows for the year then ended and Notes to the financial statementsincluding a summary of 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 Ind AS financial statements give the information required bythe Companies Act 2013 ("the Act) in the manner so required and give a true and fairview in conformity with the Indian Accounting Standards prescribed under section 133 ofthe 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 2022 and its loss total comprehensiveincome its cash flows and changes in equity 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 Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of the IndAS Financial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on the Ind ASfinancial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the Ind AS Financial statements as a wholeand in forming our opinion thereon and we do not provide a separate opinion on thesematters. We have determined the following key audit matter to be communicate in ourreport.
• Valuation of unquoted financial assets held at fair value
The valuation of the Company's unquoted financial assets held at fair value was a keyarea of audit focus due to the significance of the amount and complexity involved in thevaluation process. Management makes significant judgements because of the complexity ofthe techniques and assumptions used in valuing some of the level 3 investment securitiesgiven the limited external evidence and unobservable market data available to support theCompany's valuations.
In this regard we evaluated the assumptions methodologies and models used by theCompany. We performed a test check of a sample of positions and noted no significantvariation. We also involved our valuation experts to assess the appropriateness ofmethodologies used and found that these are reasonable in the context of the relevantinvestment securities held.
Information Other than the Ind AS Financial Statements and Auditor's 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 ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information 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 Ind AS financial statements or our knowledge obtainedduring 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 is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind AS financial statements that give a true and fair view of the financialposition financial performance changes in equity and cash flows of the Company inaccordance with the Indian Accounting Standards (Ind AS) and accounting principlesgenerally accepted in India specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. 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 implementationand maintenance of accounting policies; making judgments and estimates that are reasonableand prudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Ind ASfinancial statements 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.
Those Board of Directors are also responsible for overseeing the company's financialreporting process.
Auditor's Responsibility for the Audit of the Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany 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.
Materiality is the magnitude of misstatements in the Ind AS financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scogg 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
1. As required by Section 143(3) of the Act based on our audit 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 Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account
d) In our opinion the aforesaid Ind AS financial statements comply with the AccountingStandards 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 the directors as on March31 2022 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2022 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 and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
Based on our audit we report that the Company has not paid or provided for anymanagerial remuneration during the year. Accordingly reporting under section 197(16) ofthe Act is not applicable.
h) 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:
i. The Company does not have any pending litigations which would impact its financialposition.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company
iv. a. The management has represented that to the best of its knowledge and belief nofunds have been advanced or loaned or invested (either from borrowed funds or securitiespremium or any other sources or kind of funds) by the Company to or in any person(s) orentity(ies) including foreign entities (‘the intermediaries') with theunderstanding whether recorded in writing or otherwise that the intermediary shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner whatsoever by or on behalf of the Company (‘the Ultimate Beneficiaries')or provide any guarantee security or the like on behalf the Ultimate Beneficiaries;
b. The management has represented that to the best of its knowledge and belief nofunds have been received by the Company from any person(s) or entity(ies) includingforeign entities (‘the Funding Parties') with the understanding whether recorded inwriting or otherwise that the Company shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Funding Party (‘Ultimate Beneficiaries') or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries; and
c. Based on such audit procedures performed as considered reasonable and appropriate inthe circumstances nothing has come to our attention that causes us to believe that themanagement representations under sub-clause (i) and (ii) of Rule 11 (e) as provided under(a) and (b) above contain any material misstatement.
v. The Company has not declared or paid any dividend during the year ended 31 March2022
2. 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 B" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
For V K A N & Associates Chartered Accountants
ICAI Firm Registration No 014226S
Kaushik Venkatraman
Partner Membership No. 222070
UDIN: 22222070AJYUMP2642
Place: Chennai
Date: 17th May 2022
Annexure A to the Independent Auditor's Report
(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements section of our report to the Members of Kartik Investments Trust Limited ofeven date)
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of KartikInvestments Trust Limited ("the Company") as of March 312022 in conjunctionwith our audit of the financial statements of the Company for the year ended 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 f inancial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India ( ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to 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 Companies Act 2013.
Auditors' Responsibility
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate 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 about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing 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 judgment including the assessment of the risks ofmaterial misstatement of the financial statements 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 Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and proceduies that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and tairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures ot the company are being made only in accordance with authorisations ofmanagement and directors ot the company and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
Opinion
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 controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2022 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia
Annexure B to the Independent Auditor's Report
(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoiyRequirements section of our
report to the Members of Kartik Investments Trust Limited of even date)
In terms of the information and explanations sought by us and given by the Company andthe books of
account and records examined by us in the normal course of audit and to the best ofour knowledge and
belief we report that:
(i) (A) The Company does not have any property plant and equipment or intangibleassets or right of use assets or investment property and accordingly reporting underclause 3(i) of the Companies (Auditor's Report) Order 2020 (hereinafter referred to as‘the Order') is not applicable to the Company.
(ii) (a) The Company does not hold any inventory. Accordingly reporting under clause3(n) of
the Order is not applicable to the Company.
(b) The Company has not been sanctioned working capital limits by banks or financialinstitutions on the basis of security of current assets during any point of time of theyear. Accordingly reporting under clause 3(ii)(b) of the Order is not applicable to theCompany.
(iii) The Company has not made any investment in provided any guarantee or security orgranted any loans or advances in the nature of loans secured or unsecured to companiesfirms Limited Liability Partnerships (LLPs) or any other parties during the year.Accordingly reporting under clause 3(iii) of the Order is not applicable to the Company.
(iv) The Company has not entered into any transaction covered under sections 185 and186 of the Act. Accordingly reporting under clause 3(iv) of the Order is not applicableto the Company.
(v) The Company has not accepted any deposits or there is no amount which has beenconsidered as deemed deposit within the meaning of sections 73 to 76 of the Act and theCompanies (Acceptance of Deposits) Rules 2014 (as amended). Accordingly reporting underclause 3(v) of the Order is not applicable to the Company.
(vi) The Central Government has not specified maintenance of cost records undersub-section (1) of section 148 of the Act in respect of Company's products/businessactivity. Accordingly reporting under clause 3(vi) of the Order is not applicable.
(vii) (a) In our opinion and according to the information and explanations given tous the Company is regular in depositing undisputed statutory dues including goods andservices tax provident fund employees' state insurance income-tax sales-tax servicetax duty of customs duty of excise value added tax cess and other material statutorydues as applicable with the appropriate authorities. Further no undisputed amountspayable in respect thereof were outstanding at the year-end for a period of more than sixmonths from the date they became payable.
(b) According to the information and explanations given to us there are no statutorydues referred to in subclause (a) above that have not been deposited with the appropriateauthorities on account of any dispute.
vjii) According to the information and explanations given to us no transactions weresurrendered or —disclosed as income during the year in the tax assessments under theIncome Tax Act 1961 (43 of 1961) which have not been recorded in the books of accounts.
(ix) (a) According to the information and explanations given to us the Company doesnot have any loans or other borrowings from any lender. Accordingly reporting underclause 3(ix) of the Order is not applicable to the Company.
(b) According to the information and explanations given to us including confirmationsreceived from banks and on the basis of our audit procedures we report that the Companyhas not been declared a willful defaulter by any bank or financial institution or otherlender.
(c) In our opinion and according to the information and explanations given to us thecompany has not availed any term loans.
(d) In our opinion and according to the information and explanations given to us andon an overall examination of the financial statements of the Company no funds has beenraised by the Company.
(e) According to the information and explanations given to us and on an overallexamination of the financial statements of the Company the Company has not taken anyfunds from any entity or person on account of or to meet the obligations of its{subsidiaries associates or joint ventures}.
(f) According to the information and explanations given to us the Company has notraised any loans during the year on the pledge of securities held.
(x) (a) The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year. Accordingly reporting underclause 3(x)(a) of the Order is not applicable to the Company.
(b) According to the information and explanations given to us the Company has not madeany preferential allotment or private placement of shares or (fully partially oroptionally) convertible debentures during the year. Accordingly reporting under clause3(x)(b) of the Order is not applicable to the Company.
(xi) (a) To the best of our knowledge and according to the information and explanationsgiven to us
no fraud by the Company or on the Company has been noticed or reported during theperiod covered by our audit.
(b) No report under section 143(12) of the Act has been filed with the CentralGovernment for the period covered by our audit.
(c) According to the information and explanations given to us including therepresentation made to us by the management of the Company there are no whistle-blowercomplaints received by the Company during the year.
(xii) The Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it.
Accordingly reporting under clause 3(xii) of the Order is not applicable to theCompany.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has complied with section 177 and188 of the Act where ever applicable and details of such transactions with related partieshave been disclosed in the Ind AS financial statements as required by the applicableaccounting standards.
(xiv) (a) In our opinion and according to the information and explanations given to usthe Company has an internal audit system as required under section 138 of the Act which iscommensurate with the size and nature of its business.
(b) We have considered the reports issued by the Internal Auditors of the Company tilldate for the period under audit.
(xv) According to the information and explanation given to us the Company has notentered into any non-cash transactions with its directors or persons connected with themand accordingly provisions of section 192 of the Act are not applicable to the Company.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly reporting under clause 3(xvi) of the Order is notapplicable to the Company.
(xvii) The Company has incurred cash losses in the current financial year amounting toRs. 254402.
(xviii) There has been no resignation of the statutoiy auditors during the year.Accordingly reporting under clause 3(xviii) of the Order is not applicable to theCompany.
(xix) According to the information and explanations given to us and on the basis of thefinancial ratios ageing and expected dates of realisation of financial assets and paymentof financial liabilities other information accompanying the standalone financialstatements our knowledge of the plans of the Board of Directors and management we are ofthe opinion that no material uncertainty exists as on the date of the audit report thatCompany is capable of meeting its liabilities existing at the date of balance sheet as andwhen they fall due within a period of one year from the balance sheet date. We howeverstate that this is not an assurance as to the future viability of the company. We furtherstate that our reporting is based on the facts up to the date of the audit report and weneither give any guarantee nor any assurance that all liabilities falling due within aperiod of one year from the balance sheet date will get discharged by the company as andwhen they fall due.
(xx) According to the information and explanations given to us The Company does notfulfill the criteria as specified under section 135(1) of the Act read with the Companies(Corporate Social Responsibility Pulie^) Rules 2014 and aooording reporting under clause(xx) of the Order is not applicable to the Company.
(xxi) The reporting under clause (xxi) is not applicable in respect of audit ofstandalone financial statements of the Company. Accordingly no comment has been includedin respect of said clause under this report.
Kaushik Venkatraman
Partner
Membership No. 222070
Place: Chennai
Date: 17th May 2022
