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Motilal Oswal Financial Services Ltd.

BSE: 532892 Sector: Financials
NSE: MOTILALOFS ISIN Code: INE338I01027
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VOLUME 7257
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P/E 17.63
Mkt Cap.(Rs cr) 9,857
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OPEN 666.55
CLOSE 665.95
VOLUME 7257
52-Week high 1013.85
52-Week low 652.10
P/E 17.63
Mkt Cap.(Rs cr) 9,857
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Motilal Oswal Financial Services Ltd. (MOTILALOFS) - Auditors Report

Company auditors report

To

The Members of

Motilal Oswal Financial Services Limited

1. Opinion

We have audited the accompanying standalone financial statements ofMotilal Oswal Financial Services Limited (the "Company") which comprise theBalance Sheet as at March 31 2022 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Cash Flows and Statement of Changes in Equity forthe year then ended and a summary of significant accounting policies and otherexplanatory information.

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 Standardsprescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2022and its profit total comprehensive income its cash flows and the changes in equity forthe year ended on that date.

2. Basis for Opinion

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing specified under Section 143(10) of the Act(SAs). Our responsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India ('ICAI') together with the ethical requirements that arerelevant to our audit of the Financial Statements under the provisions of the Act and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these requirements and the ICAI's Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our opinion on thestandalone 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 of thecurrent year. These matters were addressed in the context of our audit of the FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr. Key audit matters No. How our audit addressed the key audit matter
1. Business combination arising pursuant to the scheme of arrangement Our audit procedures included but were not limited to the following:
• Read the scheme of arrangement.
• Evaluated the appropriateness of 'Pooling of interest' method of accounting adopted by the management to account for the business combination.
• Corroborated management's alignment of accounting policies and estimates by comparing the significant accounting policies and estimates of all the Companies which were part of the scheme of arrangement and comparing with the Company's accounting policies and estimates.
Accounting for business combination from the appointed date 1st April 2020 where the scheme of arrangement became effective from 30th March 2022 between Passionate Investment Management Pvt. Ltd. (transferor Company 1) and MOPE Investment Advisors Pvt. Ltd. (the transferee Company 2 / the demerged Company / the transferor Company 3) and Motilal Oswal Real Estate Investment Advisors Pvt. Ltd. (the transferor Company 2) and Motilal Oswal Real Estate Investment Advisors II Pvt. Ltd. (the demerged Company 2 / the transferor Company 4) and MO Alternate Investment Advisors Pvt. Ltd. (the resulting Company) and Motilal Oswal Financial Services Ltd. (the transferee Company 1 / the holding Company of the resulting Company) and the respective shareholders. The Company accounted for the merger as per Appendix C of Ind AS 103 under the principles of common control. We have determined this to be a key audit matter in view of the nature of the transaction number of Companies involved in the scheme of arrangement complexity involved in demerging the businesses operations and getting it merged between the Company and its subsidiary Company / resulting Company significant management judgment involved with respect to identification of uniform accounting policies estimates & accounting for minimum alternate tax of the transferor Company and recognition of share issue related costs. • Assessed accounting for non-routine transaction estimates and judgements in respect of the recognition and measurement of the minimum alternate tax of the transferor company share issue expenses etc..
• Verified that the reserves of the transferor Companies are aggregated with the respective reserves of the transferee Company and the identity of the reserves are preserved.
• Verified that the assets and liabilities of the Transferor Companies are recognised at the carrying value (as appearing in their respective books immediately prior to the appointed date) in the transferred Company.
• Examined the disclosures in respect of this transaction of business combination including those disclosures related to significant accounting judgements and estimates.
2. Information Technology (IT) Systems and Controls Our Audit Approach:
The Company's key financial accounting and reporting processes are highly dependent on the automated controls over the Company's information systems such that there exists a risk that gaps in the IT general control environment could result in a misstatement of the financial accounting and reporting records. Accordingly we have considered user access management segregation of duties and controls over system change over key financial accounting and reporting systems as a key audit matter. Our audit approach was a combination of test of internal controls and substantive procedures which included the following:
General IT controls design observation and operation:
• Tested key controls operating over the information technology in relation to financial accounting and reporting systems including system access and system change management program development and computer operations.
User access controls operation:
• Obtained management's evaluation of the access rights granted to applications relevant to financial accounting and reporting systems and tested resolution of a sample of expectations.
• Further we assessed the operating effectiveness of controls over granting removal and appropriateness of access rights.
Application controls:
• We tested the design and operating effectiveness of automated controls critical to financial accounting and reporting.
• For any identified deficiencies tested the design and operating effectiveness of compensating controls and where necessary extended the scope of our substantive audit procedure.
3 Valuation of equity investments carried at fair value Refer note 2.6 for significant accounting policies and note 54 for financial disclosures Our audit procedures in relation to valuation of investment with the involvement of our valuation experts included but were not limited to the following:
As at 31 March 2022 the Company held investment in Design/Controls:
Shubham Housing Development Finance Company Private Limited amounting to Rs. 67.97 crores which represents 0.63 % of the total assets of the Company as at 31 March 2022. • Obtained a detailed understanding of the management's process and controls for determining the fair valuation of this investment. The understanding was obtained by performance of walkthroughs which included inspection
This investment is not traded in the active market. The fair valuation of this investment is determined by a management appointed independent valuation expert based on discounted cash flow method. The process of computation of fair valuation of investment includes use of unobservable inputs and management judgements and estimates which are complex. of documents produced by the Company and discussion with those involved in the process of valuation;
The key assumptions underpinning management's assessment of fair value of this investment includes application of liquidity discounts; calculation of discounting rates and the estimation of projections of revenues projections of future cash flows and growth rates. The valuation of this investment was considered to be one of the areas which required significant auditor attention on and was one of the matters of most significance in the standalone financial statements due to the materiality of total value of investment to the standalone financial statements and the complexity involved in the valuation of this investment. • Evaluated the design and the operational effectiveness of relevant key controls over the valuation process including the Company's review and approval of the estimates and assumptions used for the valuation including key authorization and data input controls independent price verification performed by the management expert and model governance and valuation.
Substantive tests:
• Evaluated the design and the operational effectiveness of relevant key controls over the valuation process including the Company's review and approval of the estimates and assumptions used for the valuation including key authorization and data input controls independent price verification performed by the management expert and Assessed the appropriateness of the valuation methodology used for the of this investment in accordance with the Company's policy and tested the mathematical accuracy of the management's model adopted;
• Evaluated the design and the operational effectiveness of relevant key controls over the valuation process including the Company's review and approval of the estimates and assumptions used for the valuation including key authorization and data input controls independent price verification performed by the management expert and Obtained the valuation report from management's expert and assessed the expert's competence objectivity and independence in performing the valuation of these investments;
• Evaluated the design and the operational effectiveness of relevant key controls over the valuation process including the Company's review and approval of the estimates and assumptions used for the valuation including key authorization and data input controls independent price verification performed by the management expert and Assessed the appropriateness of the valuation model used by the management and the assumptions used relating to projected cash flows and the discounting factor.
• Evaluated the design and the operational effectiveness of relevant key controls over the valuation process including the Company's review and approval of the estimates and assumptions used for the valuation including key authorization and data input controls independent price verification performed by the management expert and Ensured the appropriateness of the carrying value of these investments in the financial statements and the gain or loss recognised in the financial statements as a result of such fair valuation; and
• Evaluated the design and the operational effectiveness of relevant key controls over the valuation process including the Company's review and approval of the estimates and assumptions used for the valuation including key authorization and data input controls independent price verification performed by the management expert and Ensured the appropriateness and adequacy of disclosures in accordance with the applicable accounting standards.

4. Information other than the Financial Statements and Auditor's Reportthereon

The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in theReport on Corporate Governance (but does not include the Financial Statements and ourauditor's report thereon) which we obtained prior to the date of this auditor's report andBoard's Report Management Discussion and Analysis and Business Responsibility Reportwhich is expected to be made available to us after that date.

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

In connection with our audit of the financial statements ourresponsibility is to read the other information identified above when it becomes availableand in doing so consider whether the other information is materially inconsistent withthe Financial Statements or our knowledge obtained in the audit or otherwise appears tobe materially misstated.

When we read the other information included in the above reports if weconclude that there is material misstatement therein we are required to communicate thematter to those charged with governance and determine the actions under the applicablelaws and regulations.

5. Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

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 financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in Indiaincluding the accounting standards specified under section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the standalone financial statements management isresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

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

6. Auditor's Responsibilities for the Audit of the Financial 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 Standards on Auditing will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if individually or in the aggregate they could reasonably beexpected to influence the economic decisions of users taken on the basis of thesefinancial statements.

As part of an audit in accordance with Standards on auditing weexercise professional judgment and maintain professional skepticism throughout the audit.We also:

i. 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.

ii. Obtain an understanding of internal financial controls relevant tothe audit in order to design audit procedures that are appropriate in the circumstances.Under section 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.

iii. Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

iv. 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 theability of the Company 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 financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

v. Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of the misstatement in the statement thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the statement may be influenced. We consider quantitativemateriality and qualitative factors in; (i) planning the scope of our audit work andevaluating the results of our work; and (ii) to evaluate the effects of any identifiedmisstatements in the financial statement.

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

7. Other Matters

i. The comparative standalone financial statements of the Company asstated in the Financial Statements for the year ended March 312021 were audited by thepredecessor auditor who expressed an unmodified opinion on those financial statement onApril 29 2021. Accordingly we do not express any opinion on the figures reported in theFinancial Statements for the year ended March 31 2021.

ii. As mentioned in note no. 64 of the standalone financial statementfigures for the year ended March 312021 as shown in the financial statement are thefigures which have been arrived after giving effect to the scheme of arrangement which isbased on the audited accounts of the transferor and transferee Company which were auditedby the respective auditors of that period. Hence these merged figures are neither auditednor reviewed. The Company has given effect to the scheme of arrangement with effect fromthe appointed date April 1 2020. Accordingly we do not express any opinion as the casemay be on the figures reported in the financial statement for the year ended March312021.

iii. Share of profit from investment in a limited liability partnershipaggregating to Rs. 255 lakhs for the year ended March 31 2022 included in the Statementis based on the audited financial statements of such entity. These financial statementshave been furnished to us by the Management and our opinion on the Statement in so far asit relates to the amounts and disclosures included in respect of this entity is basedsolely on the report of the other auditor.

Our opinion is not modified in respect of the above matters.

8. Report on Other Legal and Regulatory Requirements

i. As required by the Companies (Auditor's report) Order 2020("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order.

ii. As required by section 143 (3) of the Act based on our audit wereport that:

a. We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purpose of our audit;

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 standalone Balance Sheet Statement of Profit and Loss includingOther Comprehensive Income the Statement of Cash Flow and Statement of Changes in Equitydealt with by this report are in agreement with the relevant books of account.

d. In our opinion the aforesaid standalone financial statements complywith the Ind AS specified under section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;

e. On the basis of written representations received from the directorsas on March 31 2022 taken on record by the Board of Directors none of the directors isdisqualified as on March 312022 from being appointed as a director in terms of section164 (2) of the Act.

f. With respect to the adequacy of the internal financial controls withreference to the financial statements of the Company and the operating effectiveness ofsuch controls we request you to refer to our separate Report in "Annexure B" tothis report.

g. With respect to the requirements of section 197(16) of the Act asamended in our opinion and to the best of our information and according to theexplanations given to us the managerial remuneration paid by the Company to its directorsduring the year is in accordance with the provisions of section 197 of the Act.

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 asamended in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on thefinancial position in its financial statements - Refer Note 38 to the financialstatements;

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

iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company during the yearended March 312022;

iv. (a) The Management has represented that to the best of itsknowledge and belief no funds have

been advanced or loaned or invested (either from borrowed funds orshare premium or any other sources or kind of funds) by the Company to or in any otherperson(s) or entity(ies) including foreign entities ("Intermediaries") withthe understanding 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 ("Ultimate Beneficiaries")or provide any guarantee security or the like on behalf of the Ultimate Beneficiaries.;

(b) The Management has represented that to the best of its knowledgeand belief no funds have been received by the Company from any person(s) or entity(ies)including foreign entities ("Funding Parties") with the understanding whetherrecorded in writing or otherwise that the Company shall whether directly or indirectlylend or invest in other persons or entities identified in any manner whatsoever by or onbehalf of the Funding Party ("Ultimate Beneficiaries") or provide any guaranteesecurity or the like on behalf of the Ultimate Beneficiaries.

(c) Based on audit procedures that have been considered reasonable andappropriate in the circumstances; nothing has come to our notice that has caused us tobelieve that the representations under sub-clause (i) and (ii) of Rule 11(e) as providedunder (a) and (b) above contain any material misstatement.

v. As stated in note 23 of the standalone financial statement thedividend declared / paid during the year and declared during the year but paid subsequentto the year-end by the Company till the date of this report is in compliance with Section123 of the Act. Further as stated in note 49 of the standalone financial statement theBoard of Directors of the Company have proposed final dividend for the year which issubject to the approval of the members at the ensuing Annual General Meeting. The amountof dividend proposed is in accordance with section 123 of the Act.

For Singhi & Co.
Chartered Accountants
Firm Registration No. 302049E
Nikhil Singhi
Partner
Membership No. 061567
UDIN: 22061567AIAAQD6166
Place: Mumbai
Date: April 28 2022

Annexure A to the Independent Auditor's Report of even date on thestandalone financial statements of Motilal Oswal Financial Services Limited

Referred to in paragraph [8(i)] under Report on Other Legal andRegulatory Requirements of our report of even date

According to the information and explanations sought by us and given bythe Company and the books of account

and records examined by us in the normal course of audit and to thebest of our knowledge and belief we state that:

(i) a) A) The Company has maintained proper records showing fullparticulars including quantitative details

and situation of Property Plant and Equipment and relevant details ofRight-of-use Assets.

B) The Company has maintained proper records showing full particularsincluding quantitative details and situation of Intangible Assets.

b) The Company has a program of physical verification of propertyplant and equipment whereby all the items of property plant and equipment are verifiedonce in three years. The property plant and equipment were physically verified during theprevious year by the Management with a regular programme of verification In our opinionthe periodicity of the physical verification is reasonable having regard to the size ofthe Company and the nature of its assets. According to the information and explanationsgiven to us no material discrepancies were noticed on such verification carried outduring the previous year.

c) According to the information and explanations given to us and on thebasis of our examination of the records of the Company the title deeds of immovableproperties included in Property Plant and Equipment are held in the name of the Company.

d) The Company has not revalued its Property Plant and Equipment(including Right of Use assets) or Intangible Assets during the year.

e) According to the information and explanations and representationgiven to us no proceedings have been initiated or is pending against the Company duringthe year for holding any benami property under the Benami Transactions (Prohibition) Act1988 (45 of 1988) and rules made thereunder.

(ii) a) The Company's business does not involve inventory andaccordingly paragraph 3(ii)(a) of the Order is not

applicable to the Company.

b) As disclosed in Note 16 to the financial statements the Company hasbeen sanctioned working capital limits in excess of five crore rupees in aggregate frombanks on the basis of security of current assets. The Company has not obtained anysanction from financial institutions in this regard. Basis the information and explanationprovided to us and basis our audit procedures undertaken we have not come across anymaterial difference between the information submitted in the quarterly returns /statements filed by the Company with such banks when compared with the books of accountand other relevant information provided by the Company.

(iii) a) The Company is in the business of providing loans which arecalled as margin trading funding (MTF).

According to the explanations and representations given to us by theCompany this is one of the principal business of the Company which is also described inits object clause specified in Memorandum of Association. Accordingly clause (iii)(a) isnot applicable to the Company.

b) In our opinion having regard to the nature of the Company'sbusiness the investments made and the terms and conditions of the grant of all loans andadvances in the nature of loans are prima facie not prejudicial to the Company'sinterest. Further during the year the Company has not provided guarantees given securityand granted loans and advances in the nature of guarantees to companies firms LimitedLiability Partnerships or any other parties. Accordingly the requirement to report onthese is not applicable to the Company.

c) According to the information and explanations given to us in caseof loans given in the nature of MTF the schedule of payment of interest has beenstipulated but the schedule of repayment of such loans are not stipulated. In respect ofloans and advances in the nature of loans other than MTF given by the Company the Companyhas stipulated the schedule of repayment of principal and payment of interest. Repaymentof such other loans are regular.

d) In respect of loans granted and advances in the nature of loansprovided by the Company there is no overdue amount for more than ninety days as at theBalance Sheet date.

e) The Company is in the business of providing loans which are MTF.According to the explanations and representations given to us by the Company this is oneof the principal business of the Company which is also described in its object clausespecified in Memorandum of Association. Accordingly clause (iii) (e) is not applicable tothe Company.

f) In our opinion and according to the information and explanationsgiven to us there are no loans/advances given during the year in the nature of loansgranted to promoters or related parties as defined in clause (76) of section 2 of theCompanies Act 2013 which are repayable on demand or without specifying any terms orperiod of repayment. Accordingly the requirement to report on this clause is notapplicable to the Company.

(iv) In our opinion and according to the information and explanationsgiven to us the Company has complied with the provisions of section 185 and 186 of theCompanies Act 2013 with respect to the loans and investments. Further as noguarantees/security has been given towards the parties specified in section 185 clausewith regard to these matters are not applicable to the Company.

(v) According to the information and explanations given to us theCompany has not accepted any deposit during the year and does not have any unclaimeddeposit as at March 312022 and therefore the provisions of Sections 73 to 76 or anyother relevant provisions of the Companies Act 2013 and the rules made thereunder are notapplicable to the Company. We are informed by the management that no order has been passedby the Company Law Board National Company Law Tribunal or Reserve Bank of India or anyCourt or any other Tribunal against the Company in this regard.

(vi) The maintenance of cost records has not been specified by theCentral Government under Section 148(1) of the Companies Act 2013 for the businessactivities carried out by the Company. Thus reporting under paragraph 3(vi) of the Orderis not applicable to the Company.

(vii) In respect of Statutory dues:

a) The Company has generally been regular in depositing undisputedstatutory dues including provident fund employees' state insurance income tax goodsand service tax cess and other material statutory dues applicable to it to theappropriate authorities. As explained to us the Company did not have any dues on accountof sales tax wealth tax duty of customs duty of excise and value added tax.

b) There were no undisputed amounts payable in respect of providentfund employees' state insurance income tax goods and services tax cess and othermaterial statutory dues which were outstanding at the year end for a period of more thansix months from the date they became payable.

c) The details of statutory dues referred to in sub- clause (a) abovewhich have not been deposited as on 31 March 2022 on account of disputes are given below:

Name of the Statute Nature of Due Amount (Rs. in Lakhs) Amount paid under Protest (Rs. In Lakhs) Period to which the amount relates Forum where dispute is pending
Income Tax Act 1961 Income Tax 2 15.21 F.Y 2008-09 Income Tax Appellate Tribunal
Income Tax Act 1961 Income Tax 4 F.Y 2008-09 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 41 20 F.Y 2011-12 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 41 - F.Y 2012-13 ITAT referred back to AO
Income Tax Act 1961 Income Tax 140 19 F.Y 2012-13 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 2269 168 F.Y 2013-14 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 1220 92 F.Y 2014-15 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 1610 137 F.Y 2015-16 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 2720 - F.Y 2016-17 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax 553 - F.Y 2017-18 Commissioner of Income Tax (Appeals)
Total 8600 451

(viii) According to the information and explanations given to us thereare no transactions which have not been recorded in the books of account but have beensurrendered or disclosed as income in the tax assessments under the Income Tax Act 1961(43 of 1961) during the year.

(ix) a) According to the information and explanations given to us theCompany has not defaulted in repayment of

loans or borrowings or in the payment of interest thereon to anylender.

b) Basis the information and explanation provided to us the Companyhas not been declared a wilful defaulter by any bank or financial institution or otherlender.

c) The Company has not availed any term loans accordingly reportingunder paragraph 3(ix)(c) of the Order is not applicable to the Company.

d) According to the information and explanations given to us and theprocedures performed by us and on an overall examination of the financial statements ofthe company we report that no funds raised on shortterm basis have been used forlong-term purposes by the company.

e) On an overall examination of the financial statements of theCompany the Company has not taken any funds from any entity or person on account of or tomeet the obligations of its subsidiaries and associate during the year.

f) According to the information and explanations given to us andprocedures performed by us we report that the company has raised loans during the year onthe pledge of securities held in its subsidiaries as per details below. Further thecompany has not defaulted in repayment of such loans raised.

Nature of loan taken Name of lender Amount of loan Name of the subsidiary Relation Details of security pledged
Working Capital Demand Loan Kotak Mahindra Bank Limited 7500 Lakh Motilal Oswal Asset Management Company Subsidiary Mutual Funds

(x) a) The Company has not raised any money by way of initial publicoffer or further public offer (including debt

instruments) during the year and hence reporting under paragraph 3(x)(a) of the Order is not applicable to the Company.

b) The Company has not made any preferential allotment or privateplacement of shares or convertible debentures (fully partially or optionally convertible)during the year and hence reporting under paragraph 3 (x)(b) of the Order is notapplicable to the Company.

(xi) a) According to the information explanation and representationsgiven to us no fraud by the Company or no fraud on the Company has been noticed orreported during the year.

b) According to the information explanation and representations givento us and to the best of our knowledge no report under sub-section (12) of section 143 ofthe Act has been filed in Form ADT- 4 as prescribed under rule 13 of Companies (Audit andAuditors) Rules 2014 with the Central Government during the year and upto the date ofthis report.

c) According to the information and explanations given to us by themanagement there were no whistle blower complaints received by the Company during the yearand hence reporting under paragraph 3 (xi)(c) of the Order is not applicable to theCompany.

(xii) The Company is not a nidhi company and hence reporting underparagraph 3 (xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given by themanagement all the transactions with the related parties are in compliance with section177 and 188 of the Act where applicable and the details of related party transactionshave been disclosed in the notes to the financial statements etc as required by theapplicable accounting standards.

(xiv) a) In our opinion the Company has an adequate internal auditsystem commensurate with the size and the nature of its business.

b) We have taken into consideration the internal audit reports for theperiod under audit issued to the Company till the date while determining the naturetiming and extent of audit procedures.

(xv) According to the information and explanations given by themanagement the Company has not entered into any non-cash transactions with directors orpersons connected with them as referred to in section 192 of the Act. Thus paragraph3(xv) of the Order is not applicable to the Company.

(xvi) a) The Company is not required to be registered under section45-IA of the Reserve Bank of India (RBI) Act 1934.

b) The Company has not conducted any Non- Banking Financial or HousingFinance Activities without obtaining a valid Certificate of Registration (CoR) fromReserve Bank of India as per the Reserve Bank of India Act 1934.

c) The Company is not a Core Investment Company (CIC) as defined in theregulations made by the Reserve Bank of India and hence reporting under paragraph 3(xvi)(c) of the Order is not applicable.

d) According to the information and explanations given to us there isno CIC in the Group.

(xvii) According to the information and explanations given to us andbased on our examination of the records of the Company the Company has not incurred cashlosses during the financial year covered by our audit and the immediately precedingfinancial year.

(xviii) There has been a resignation of the Statutory Auditors duringthe year. No issues objections or concerns were raised by the outgoing auditor.

(xix) According to the information and explanations given to us and onthe basis of the ageing and expected dates of realisation of financial assets and paymentof financial liabilities other information accompanying the financial statements ourknowledge of the Board of Directors and management plans and based on our examination ofthe evidence supporting the assumptions nothing has come to our attention which causesus to believe that any material uncertainty exists as on the date of the audit report thatthe Company is not capable of meeting its liabilities existing at the date of BalanceSheet as and when they fall due within a period of one year from the Balance Sheet date.We however state that this is not an assurance as to the future viability of theCompany. We further state that our reporting is based on the facts up to the date of theaudit report and we neither give any guarantee nor any assurance that all liabilitiesfalling due within a period of one year from the Balance Sheet date will get dischargedby the Company as and when they fall due.

(xx) a) There are no unspent amounts towards Corporate SocialResponsibility ('CSR'). Accordingly reporting under paragraph 3(xx)(a) of the Order isnot applicable for the year.

b) The Company does not have any ongoing projects in accordance withthe requirements of CSR guidelines and hence reporting under paragraph 3(xx)(b) of theOrder is not applicable for the year.

(xxi) As the Company is also preparing its consolidated financialstatement reporting under paragraph 3 (xxi) is given in the consolidated audit report.

For Singhi & Co.
Chartered Accountants
Firm Registration No. 302049E
Nikhil Singhi
Partner
Membership No. 061567
UDIN: 22061567AIAAQD6166
Place: Mumbai
Date: April 28 2022

Annexure B to the Independent Auditor's Report of even date on thefinancial statements of Motilal Oswal Financial Services Limited

Referred to in paragraph [8(ii)(f)] under Report on Other Legal andRegulatory Requirements of our report of even date

Report on the Internal Financial Controls over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting with reference to the Financial Statements of Motilal Oswal Financial ServicesLimited (the "Company") as of March 312022 in conjunction with our audit of theInd AS 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 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 designimplementation and maintenance of adequate internal financial controls that were operatingeffectively for ensuring the orderly and efficient conduct of its business includingadherence to company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under the Act.

Auditor's Responsibility

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 and the Standards on Auditing as specified under section143(10) of the Act to the extent applicable to an audit of internal financial controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated 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 financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained 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 financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that:

(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany;

(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2022 based on thecriteria for internal financial control over financial reporting established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting ("the GuidanceNote") issued by the Institute of Chartered Accountants of India.

For Singhi & Co.
Chartered Accountants
Firm Registration No. 302049E
Nikhil Singhi
Partner
Membership No. 061567
UDIN: 22061567AIAAQD6166
Place: Mumbai
Date: April 28 2022

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