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 312021 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 312021 and profit/loss changes in equityand 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 Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditors Responsibilities for the Audit ofthe Ind AS Financial Statements section of our report. We are independent of the Companyin accordance 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 Companys unquoted financial assets held at fair value was akey area of audit focus due to the significance of the amount and complexity involved inthe valuation process. Management makes significant judgements because of the complexityof the techniques and assumptions used in valuing some of the level 3 investmentsecurities given the limited external evidence and unobservable market data available tosupport the Companys 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 Auditors ReportThereon
The Companys Board ofDirectors is responsible forthe preparation ofthe otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Boards Report including Annexures to Boards ReportBusiness Responsibility Report Corporate Governance and Shareholders Informationbut does not include the Ind AS financial statements and our auditors reportthereon.
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.
Managements responsibility for the Ind AS Financial Statements
The Companys 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 ofthe Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate implementation andmaintenance of accounting policies; making judgments and estimates that are reasonable andprudent; 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 Companys ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.
Those Board of Directors are also responsible for overseeing the companysfinancial reporting process
Auditors 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 auditors report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud 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 managements use of the going concernbasis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompanys ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors report to therelated disclosures in the Ind AS financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditors report. However future events or conditionsmay cause the Company to cease to continue 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 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 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.
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 necessaiy 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 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 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 Companys internal financial controlsover financial reporting.
g) 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 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
2. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Companies Act 2013 we give in the "Annexure B" a statementon the matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
For V K A N & Associates
ICAI Firm Registration No 014226S
Membership No. 222070
Date: 14* May 2021
Annexure A to the Independent Auditors Report
(Referred to in paragraph 1(f) under Report on Other Legal and RegulatoiyRequirements section of our report to the Members of Kartik Investments TrustLimited of even 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 312021 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys 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 (ICAI). 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 companys policies the safeguardingof its 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.
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 ofInLemal 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 auditors 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 Companys internal financial controlssystem over 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 procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of 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
(3) 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
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.
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 2021 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
For V K A N & Associates
ICA1 Firm Registration No 014226S
Membership No. 222070
Date: 14th May 2021
Annexure B to the Independent Auditors Report
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements section of our report to the Members of Kartik Investments TrustLimited of even date)
(i) The Company does not have any Fixed assets. Hence clause 3(i) of the order is notapplicable.
(ii) The Company does not have any inventories and hence clause 3(ii) of the Order isnot applicable.
(iii) According to the information and explanations given to us and on the basis of ourexamination of books of accounts the Company has not granted any loan secured orunsecured to companies firms limited liability partnerships or other parties covered inthe register required under Section 189 of the Companies Act 2013 and hence paragraph3(iii) of the order is not applicable.
(iv) The Company does not have any loan guarantees or security. As the Companysprinciple business is acquisition of securities the provisions of Section 186 as areapplicable to other companies are not applicable to this Company.
(v) According to the information and explanations made available to us the Company hasnot accepted deposits from the public.
(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act.
(vii) According to the information and explanations given to us and on the basis of ourexamination of books of accounts in respect of statutory dues
a) The Company has generally been regular in depositing undisputed statutory duesincluding Income Tax Goods and Service Tax and other material statutory dues with theappropriate authorities. The statutes governing Provident Fund Employees StateInsurance and Excise duty and Sales Tax are not applicable to the Company
b) There are no undisputed amounts payable in respect of Income Tax Goods and ServiceTax and other material statutory dues as at March 312021 for a period of more than sixmonths from the date they became payable. The statutes governing Provident FundEmployees State Insurance and Excise duty and Sales Tax are not applicable to theCompany.
c) There are no dues of Income Tax Goods and Service Tax Customs Duty and othermaterial statutory dues as on March 31 2021 on account of any disputes. The statutesgoverning Provident Fund Employees State Insurance and Excise duty and Sales Taxare not applicable to the Company.
(viii) The Company has not borrowed any amounts from any financial institution bank ordebenture holders.
(ix) According to the information and explanations given to us and on the basis of ourexamination of books of accounts Ihe Company did not raise any money by way of initialpublic offer or further public offer (including debt instruments) and term loans duringthe year.
(x) According to tbe information and explanations given to us no fraud by the Companyor no fraud on the Company by its officers or employees has been noticed or reportedduring the year.
(xi) The Company has not paid any managerial remuneration during the year
(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 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) According to the information and explanations give to us and on the basis of ourexamination of books of accounts the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the year.
(xv) According to the information and explanations given to us and on the basis of ourexamination of books of accounts the Company has not entered into non-cash transactionswith directors or persons connected with him. Accordingly paragraph 3(xv) of the Order isnot applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
For V K A N & Associates
ICAI Firm Registration No 014226S
Membership No. 222070
Date: 14th May 2021