the Members of
Shardul Securities Limited
Report on the audit of the Standalone Ind AS financial statements
1. We have audited the accompanying standalone Ind AS financial statements of ShardulSecurities Limited ("the Company") which comprise the balance sheet as at March31 2021 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 ended onthat date and notes to the standalone Ind AS financial statements including a summary ofsignificant accounting policies and other explanatory information.
2. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder Section 133 of the Act read with the Companies (Indian Accounting Standards)Rules2015 as amended ("Ind AS") and other accounting principles generallyaccepted in India of the state of affairs of the Company as at March 312021 its profitincluding other comprehensive income changes in equity and its cash flows for the yearthe ended on that date.
Basis for opinion
3. We conducted our audit of the Standalone Ind AS Financial Statement in accordancewith the Standards on Auditing (SAs) specified under section 143(10) of the Act. Ourresponsibilities 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 an d the ICAI's Code of Ethics. We believe that the audit evidencewe have obtained is sufficient and appropriate to provide a basis for our audit opinion onthe standalone Ind AS financial Statements.
Emphasis of Matters
4. We draw Attention to note 31 to the standalone Ind AS financial statements whichdescribe the uncertainty caused by Novel Corona virus (COVID-19).Our opinion is notmodified in respect of this matter.
Key Audit Matters
5. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone Ind AS financial statements of the currentperiod. These matters were addressed in the context of our audit of the standalone Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. We have determined that there are no key auditmatters to communicate in our report.
Information Other than the Standalone Ind AS Financial Statements and Auditors' ReportThereon
6. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report Business
Responsibility Report Corporate Governance and Shareholder's Information report butdoes not include the Standalone Ind AS financial statements and our auditor's reportthereon.
7. Our opinion on the standalone Ind AS financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
8. In connection with our audit of the standalone Ind AS financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated.
9. 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.
Responsibilities of management and those charged with governance for the standalone IndAS Financial statements
10. The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone Ind AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flow and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards specified under section 133 of the Act. This responsibilityalso includes maintenance of adequate accounting records in accordance with the provisionsof the Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation 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 standalone Ind AS financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
11. In preparing the standalone Ind AS financial statements management is responsiblefor assessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
12. The Board of Directors are also responsible for overseeing the Company's financialreporting process.
Auditors' responsibilities for the audit of the Standalone Ind AS financial statements
13. Our objectives are to obtain reasonable assurance about whether the standalone IndAS financial statements as a whole are free from material misstatement whether due tofraud or error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these standalone Ind AS financial statements.
14. As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone Ind ASfinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances .Under Section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures in the standalone Ind AS financialStatements made by the Management and Board of Directors.
Conclude on the appropriateness of management's use of the going concern basisof accounting and base d on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are requi red to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the standalone Ind AS financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.
15. Materiality is the magnitude of misstatements in the standalone Ind AS financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the standalone financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the standalone financialstatements.
16. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
17. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
18. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone Ind ASfinancial 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.
Report on other legal and regulatory requirements
19. As required by the Companies (Auditor's Report) Order 2016 ("theOrder") issued by the Central Government of India in terms of sub-section (11) ofsection 143 of the Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
20. As required by Section 143(3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
(c) The Standalone Balance Sheet the Statement of Profit and Loss including OtherComprehensive Income statement of changes in equity and the statement of Cash Flows dealtwith by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid standalone Ind AS financial statements comply withthe Ind AS specified under Section 133 of the Act.
(e) On the basis of the written representations received from the directors as on March312021 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 B".
(g) With respect to the other matters to be included in the Auditors' Report inaccordance 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 the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of Section 197 of the Act.
(h) With respect to the other matters to be included in the Auditor's Report inaccordance wi th 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 has disclosed the impact of pending litigations as at year end on itsfinancial position in its standalone Ind AS financial statements - Refer Note 45.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
Annexure A to Independent Auditors' Report
Referred to in Paragraph 19 of the Independent Auditors' Report of even date to themembers of Shardul Securities Limited on the financial statements as of and for the yearended 31st March 2021
i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of Plant property and equipments.
(b) The Plant property and equipments of the Company have been physically verified bythe Management at regular intervals and no material discrepancies have been noticed onsuch verification. In our opinion the frequency of verification is reasonable.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.
ii. The Company does not hold any inventory during the year accordingly paragraph 3(ii) of the Order is not applicable.
iii. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the Company.
iv. The Company has not granted any loans or provided any guarantees or security inconnection with any loan to any party covered under Section 185 of the Companies Act2013 except for loan and corporate guarantee given to its subsidiary which is incompliance with the provisions of the said Section.
The Company is registered as Non-Banking Financial Company (NBFC) as defined underSection 45-IA of the Reserve Bank of India Act 1934 (RBI) and therefore exempt from theprovisions of Section 186 of the Act.
v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.
vi. The Central Government of India has not specified the maintenance of cost recordsunder sub-section (1) of Section 148 of the Act for any of the products of the Company.
vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is regular in depositing theundisputed statutory dues including Provident Fund Income Tax Goods & Service TaxCustoms Duty Cess and other material statutory dues as applicable with the appropriateauthorities.
(b) There were no undisputed amounts payable in respect of Provident Fund Income TaxGoods and Service Tax Customs Duty Cess and other material statutory dues in arrears asat March 312021 for a period of more than six months from the date they became payable.
(c) According to the information and explanations given to us and the records of theCompany examined by us there are dues of Income Tax which have not been deposited onaccount of any dispute are as follows:
(Rs. in Lakhs).
|Name of Statute ||Nature of Disputed dues ||Amount under dispute ||Amount paid ||Period to which amount relates ||Forum where dispute is pending |
|Income Tax Act1961 ||Income tax ||15.98 ||- ||FY 2017-18 ||Commissioner of Income Tax (Appeals) |
|Income Tax Act1961 ||Income tax ||4.98 ||3.70 ||FY 2016-17 ||Commissioner of Income Tax (Appeals) |
|Income Tax Act1961 ||Income tax ||8.56 ||1.54 ||FY 2014-15 ||Income tax Appellate Tribunal |
viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution. The Company does not have any loans or borrowings from anybank or Government nor has it issued any debentures as at the balance sheet date.
ix. The Company has not raised any moneys by way of initial public offer furtherpublic offer (including debt instruments) and term loans. Accordingly the provisions ofClause 3(ix) of the Order are not applicable to the Company.
x. During the course of our examination of the books and records of the Company whichwas carried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.
xi. The Company has paid for managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.
xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required by applicableaccounting standards.
xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review. Accordingly theprovisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non-cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.
xvi. The Company is required to and has been registered under Section 45-IA of theReserve Bank of India Act 1934.
Annexure B to Independent Auditors' Report
Referred to in paragraph 20 (f) of the Independent Auditors' Report of even date to themembers of Shardul Securities Limited on the standalone financial statements for the yearended March 31 2021
Report on the Internal Financial Controls over financial reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013(the Act').
1. We have audited the internal financial controls over financial reporting of ShardulSecurities Limited ("the Company") as of March 312021 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
2. The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal co ntrol 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). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's p olicies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.
3. Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") and the Standards on Auditing deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of internal financial controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls with reference to financial statementswas established and maintained and if such controls operated effectively in all materialrespects.
4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system with reference to financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlswith reference to financial statements assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrol based on the assessed risk. The procedures selected depend on the auditor'sjudgments including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls with reference to financial statements
6. A company's internal financial controls with reference to financial statements 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 controlsover financial reporting includes those policies and procedures that
a) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
b) 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 authorizations of management and directors of the company; and
c) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to financialstatements
7. Because of the inherent limitations of internal financial controls with reference tofinancial statements 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 withreference to financial statements to future periods are subject to the risk that theinternal financial control controls with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.
8. In our opinion to the best of our information and accordingly to the explanationgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting were operating effectively as at March 31 2021based on the 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.
|For J. Kala & Associates Firm Registration Number: 118769W |
|Chartered Accountants |
|Vaibhav Patodi Partner |
|Membership Number: 420935 |
|Place: Mumbai |
|Date: 29th June 2021 UDIN: 21420935AAAADT6092 |