LKP Securities Ltd.
|BSE: 540192||Sector: Financials|
|NSE: N.A.||ISIN Code: INE341H01023|
|BSE 13:10 | 07 Feb||13.25||
|NSE 05:30 | 01 Jan||LKP Securities Ltd|
|Mkt Cap.(Rs cr)||100|
|Mkt Cap.(Rs cr)||99.64|
LKP Securities Ltd. (LKPSECURITIES) - Auditors Report
Company auditors report
The Members of LKP Securities Limited
We have audited the accompanying standalone financial statements of LKPSecurities Limited ("the Company") which comprise the balance sheet as at 31March 2022 the statement of profit and loss (including other comprehensive income) thestatement of changes in equity and the statement of cash flows for the year then endedand notes to the standalone financial statements including a summary of significantaccounting policies and other explanatory information (herein after referred to as"standalone financial statements").
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standards(Ind AS) prescribed under section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended and other accounting principles generallyaccepted in India of the state of affairs of the Company as at 31 March 2022 its profittotal comprehensive income changes in equity and its cash flows for the year ended onthat date.
2. Basis for Opinion
We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theAct. Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone 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 the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
3. Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone financial statements for the yearended 31 March 2022. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters.
4. Other Information
The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report CorporateGovernance and Shareholder's Information but does not include the standalone financialstatements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard
5. Management?s Responsibility for the Standalone FinancialStatements
The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financial performance(including other comprehensive income) changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including the IndAS prescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended.
This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding the assets of theCompany and 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 standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the standalone financial statements Company's Board ofDirectors are responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless Company's Board of Directors either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso. The Board of Directors are responsible for overseeing the Company's financialreporting process.
6. Auditor?s Responsibilities for the Audit of the StandaloneFinancial Statements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone 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 thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.
Obtain an understanding of internal control 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 may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone 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 auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
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 standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these 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.
7. Report on Other Legal and Regulatory requirements
I. As required by the Companies (Auditor's Report) Order 2020 issuedby the Central Government of India in terms of Section 143(11) of the Act ("theOrder") and on the basis of such checks of the books and records of the Company aswe considered appropriate and according to the information and explanations given to uswe give in the "Annexure A" a statement on the matters specified in theparagraph 3 and 4 of the Order.
II. 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 ouraudit;
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;
d) In our opinion the aforesaid standalone financial statements complywith the Indian Accounting Standards specified under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended;
e) On the basis of the written representations received from thedirectors as on 31 March 2022 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2022 from being appointed as a director in termsof 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 the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid/payable by the Company to its directorsduring the year is in accordance with the provisions of Section 197 of the Act; and
h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements;
ii. The Company did not have any long-term contracts includingderivative contracts having any material foreseeable losses; and
iii. There are no amounts required to be transferred to the InvestorEducation and Protection Fund by the Company during the year.
iv. (a) The management has represented that to the best of itsknowledge and belief other than as disclosed in notes to the accounts no funds have beenadvanced or loaned or invested (either from borrowed funds or share premium or any othersources or kind of funds) by the Company to or in any other persons or entities includingforeign entities ("Intermediaries") with the understanding whether recorded inwriting or otherwise that the Intermediary shall whether directly or indirectly lend orinvest in other persons or entities identified in any manner whatsoever by or on behalf ofthe Company ("Ultimate Beneficiaries") or provide any guarantee security or thelike on behalf of the Ultimate Beneficiaries
(b) The management has represented that to the best of its knowledgeand belief other than as disclosed in the notes to the accounts no funds have beenreceived by the Company from any persons or entities including foreign entities("Funding Parties") with the understanding whether recorded in writing orotherwise that the Company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of theFunding Party ("Ultimate Beneficiaries") or provide any guarantee security orthe like on behalf of the Ultimate Beneficiaries; and
(c) Based on the information and details provided and other auditprocedures followed nothing has come to our notice that has caused us to believe that therepresentations under subclause iv(a) and (b) contain any material misstatement.
v. As stated in Note 48 to the standalone financial statements
(a) The final dividend proposed in the previous year declared and paidby the Company during the year is in accordance with Section 123 of the Act.
(b) The Board of Directors of the Company have proposed final dividendfor the year which is subject to approval of the members at the ensuing Annual GeneralMeeting. The amount of dividend proposed is in accordance with Section 123 of the Act.
Annexure - A to the Independent Auditor?s Report
Annexure referred to in paragraph 7(I) under "Report on otherLegal and Regulatory requirements" of our report of even date to the members of theCompany on the standalone financial statements for the year ended 31 March 2022
i. (a) A) The Company has maintained proper records showing fullparticulars including quantitative details and situation of Property Plant and Equipmentand relevant details of right of use assets.
B) The Company has maintained proper records showing full particularsof Intangible assets.
(b) As explained to us all the property plant and equipment have beenphysically verified by the management during the year which in our opinion is reasonablehaving regard to the size of the Company and nature of its assets. As informed to us nodiscrepancies were noticed 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 there are no immovableproperties held in the name of the Company except assets held for sale for which the titledeeds are not held in the name of the Company.
(e) There are no proceedings initiated or pending against the Companyfor holding any benami property under the Benami Transactions (Prohibition) Act 1988 (45of 1988) and rules made thereunder and hence clause 3(i)(e) of the Order is notapplicable.
ii. (a) The Company is involved in the business of rendering services.Accordingly the provisions stated in paragraph 3(ii) of the Order is not applicable tothe Company.
(b) The Company has been sanctioned working capital limits in excess offive crore rupees in aggregate on the basis of security of current assets. On the basisof examination of records the discrepancies noticed on quarterly statements submitted tobank with books of account maintained (Refer note 14 to standalone financial statements).
iii (a) According to the information and explanations given to us theCompany has not granted loans secured or unsecured to companies firms Limited LiabilityPartnerships or any other parties except interest free loans to employees. The Company hasnot provided guarantees and securities during the year. The aggregate amount of loan givenand balance outstanding as at the balance sheet date with respect to loans given is asunder
(b) In our opinion the investments made and other terms and conditionsof the grant of loans during the year are prima facie not prejudicial to the interest ofthe Company. The Company has not given guarantees or provided securities during the year.
(c) In respect of loans granted by the Company the repayments ofprincipal amounts are generally regular considering the stipulation to repayment.
(d) There is no overdue amount in respect of loans granted for morethan 90 days considering the stipulations to repayment.
(e) On the basis of examination no loan granted by the Company whichhas fallen due during the year has been renewed or extended or fresh loans granted tosettle the overdues of existing loans given to same parties.
(f) On the basis of examination of records the Company has not grantedany loans or advances in the nature of loans either repayable on demand or withoutspecifying any terms or period of repayment during the year. Hence reporting under clause3(iii) (f) is not applicable to the Company.
iv In our opinion and according to the information and explanationsgiven to us the Company has not given guarantees or provided securities during the year.The Company has complied with the provisions of section 185 and 186 of the Act withrespect to loans given and investments made as applicable.
v The Company has not accepted any deposits or amounts which are deemedto be deposits from the public within the directives issued by Reserve Bank of India andwithin the meaning of Sections 73 to 76 of the Act and the rules framed thereunder.
vi According to information and explanation given to us the CentralGovernment of India has not prescribed the maintenance of cost records under Section148(1) of the Act for any of the activities carried on by of the Company.
vii According to the records of the Company examined by us andinformation and explanations given to us:
a) Undisputed statutory dues including provident fund employees' stateinsurance income tax sales tax service tax goods and services tax duty of customsduty of excise value added tax cess and others as applicable have generally beenregularly deposited with the appropriate authorities except delays in few cases. There areno undisputed amounts payable in respect of aforesaid dues outstanding as at 31 March 2022for a period of more than six months from the date they became payable.
b) There are no amounts of any statutory dues which are yet to bedeposited on account of any dispute except as stated below:
viii According to the records of the Company examined by us andinformation and explanations given to us there are no such transactions related tounrecorded income that have been surrendered or disclosed as income during the year in thetax assessments under the Income Tax Act 1961 (43 of 1961).
ix (a) According to the records of the Company examined by us and theinformation and explanations given to us the Company has not
defaulted in repayment of loans or borrowings to banks. The Company hasnot taken any loans from Government and has not issued any debentures.
(b) According to the records of the Company examined by us andinformation and explanations given to us the Company is not declared wilful defaulter byany bank or financial institution or other lender.
(c) According to the records of the Company examined by us andinformation and explanations given to us the Company has not taken any term loan duringthe year and there are no outstanding term loans at the beginning of the year and hencereporting under clause 3(ix)(c) of the Order is not applicable.
(d) According to the records of the Company examined by us andinformation and explanations given to us funds raised on short term basis have been notbeen utilised for long term purposes.
(e) According to the records of the Company examined by us andinformation and explanations given to us the Company has not taken any funds fromentities to meet obligations of its subsidiaries and there are no joint ventures andassociates.
(f) According to the records of the Company examined by us andinformation and explanations given to us the Company has not raised any loans during theyear on the pledge of securities held in its subsidiaries and there are no joint venturesand associates.
x (a) In our opinion and according to the information and explanationsgiven to us the Company has not raised any money by way of
initial public offer or further public offer (including debtinstruments) and hence reporting on clause 3(ix)(f) of the Order is not applicable.
(b) According to the records of the Company examined by us andinformation and explanations given to us the Company has not made any preferentialallotment or private placement of shares or fully or partly or optionally convertibledebentures and hence clause 3(x) (b) of the Order is not applicable.
xi (a) During the course of our examination of the books and records ofthe Company carried out in accordance with the generally ac
cepted auditing practices in India and according to the informationand explanations given to us we have neither come across any instance of fraud by theCompany or on the Company noticed or reported during the year nor have been informed ofany such case by the Management.
(b) No report under sub-section (12) of section 143 of the Act has beenfiled in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules2014 with the Central Government during the year and upto the date of this report.
(c) According to the records of the Company examined by us andinformation and explanations given to us there are no whistle blower complaints receivedduring the year.
xii In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi company and the Nidhi Rules 2014 are notapplicable to it. Hence clause (xii) of the Order are not applicable.
xiii According to the information and explanations given to us andbased on our examination of the records of the Company transactions with the relatedparties are in compliance with Sections 177 and 188 of the Act and details of suchtransactions have been disclosed in the standalone Ind AS financial statements as requiredby the applicable Accounting Standards.
xiv (a) During the year Internal audit has been carried out by theIndependent firm of Chartered accountants. In our opinion and according
to the information and explanations given to us the scope and coverageis commensurate with the size of the Company and the nature of its business.
(b) We have considered the internal audit reports for the year underaudit issued by Company during the year and till date in determining the nature timingand extent of our audit procedures.
xv According to the records of the Company examined by us andinformation and explanations given to us the Company has not entered into non-cashtransactions with directors or persons connected with him and hence provisions of section192 of the Act are not applicable to the Company.
xvi a) The Company is not required to be registered under Section 45-IAof the Reserve Bank of India Act 1934 hence clause (xvi) (a)(b)
and (c) of the Order are not applicable
b) In our opinion the Company is not a core investment company andaccordingly reporting under clause 3(xvi)(d) of the Order is not applicable.
xvii According to the records of the Company examined by us andinformation and explanations given to us the Company has not incurred cash losses neitherin the current financial year nor in the immediately preceding financial year.
xviii There has been no resignation of statutory auditor during theyear hence reporting under clause (xviii) of the Order is not applicable.
xix On the basis of the financial ratios ageing and expected dates ofrealisation of financial assets and payment of financial liabilities other informationaccompanying the financial statements the auditor's knowledge of the Board of Directorsand management plans there is no material uncertainty that exists as on the date of theaudit report and that the Company is capable of meeting its liabilities existing at thedate of balance sheet as and when they fall due within a period of one year from thebalance sheet date. We however state that this is not an assurance as to the futureviability of the company. We further state that our reporting is based on the facts up tothe date of the audit report and we neither give any guarantee nor any assurance that allliabilities falling due within a period of one year from the balance sheet date will getdischarged by the company as and when they fall due.
xx a) The Company is not required to spend towards Corporate Socialresponsibility (CSR) and hence clause 3(xx) of the Order is not
Annexure - B to the Independent Auditor?s Report
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act") as referredto in paragraph 7(II)(f) under "Report on other Legal and Regulatoryrequirements" of our report of even date to the members of LKP Securities Limited onthe standalone financial statements for the year ended 31 March 2022
We have audited the internal financial controls over financialreporting of LKP Securities Limited ("the Company") as of 31 March 2022 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.
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 the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India (ICAI). 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 of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on "Audit of Internal Financial Controls overFinancial Reporting" (the "Guidance Note") issued by the Institute ofChartered Accountants of India and the Standards on Auditing prescribed under Section143(10) of the Companies Act 2013 to the extent applicable to an audit of internalfinancial controls. 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 judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.
We believe that the audit evidence obtained by us is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of standalone financial statements for external purposes inaccordance with generally accepted accounting principles. A company's internal financialcontrol over financial reporting includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of standalonefinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the standalonefinancial 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 financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at 31 March 2022 based onthe internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.