To The Members of Shriram Asset Management Company Limited Report on the StandaloneFinancial Statements
We have audited the accompanying standalone Financial Statements of Shriram AssetManagement Company Limited ("the Company") which comprise the Balance sheetas at March 31 2021 the statement of Profit and Loss account (including othercomprehensive income) the Statement of changes in Equity and the Cash Flows Statement forthe year ended on that date and a summary of significant accounting policies and otherexplanatory information (hereinafter referred to as "the standalone financialstatements").
In our opinion and to the best of our information and according to the explanationsgiven to us these aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (the Act) in the manner so required and give a true and fairview in conformity with the Indian Accounting Standards specified under Section 133 of theAct read with the Companies (Indian Accounting Standards) Rule 2015 as amended (IndAS) and other accounting principles generally accepted in India of the state ofaffairs of the company as at March 31 2021 and its profit and other comprehensive incomethe changes in equity and its cash flows for the year ended on that date.
Basis of Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143 (10) of the Act. Our responsibilities under those standards are furtherdescribed in the Auditors Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (the ICAI)together with the ethical requirements that are relevant to our audit of the financialstatements fulfilled our other ethical responsibilities in accordance with theserequirements and the Code of Ethics. We believe that the audit evidence we have obtainedis sufficient and appropriate to provide a basis for our opinion on the standalonefinancial statements.
Emphasis of Matter
We draw attention to Note No. 31 to the financialstatements which describe that theextent to which the COVID-19 Pandemic will impact the Companys results will dependon future developments which are highly uncertain for which the Company will continue tomonitor and further Directors consider that the Company has adequate Financial resourcesto continue in operational existence for the foreseeable future and therefore Financialstatements for the year are prepared under Going Concern assumptions.
Our opinion is not modified in respect of this matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
|Key Audit Matter ||Auditors Response |
|1. Valuation of Investments in Mutual Fund Schemes ||Our audit procedures to assess the reasonableness of valuation of investments includes the following: |
|Since the Company is an Asset Management Company it has investments in its own Mutual fund schemes as per SEBI (Mutual Funds) Regulations 1996 and also investment in other mutual fund schemes. ||Ensuring that the accounting policy as adopted by the Company for valuation of its investments is in accordance with the requirement of the relevant Ind AS. |
|As on the balance sheet date investments are valued as per the requirements of Ind AS 109 Financial Instruments. ||Verification of the valuation of investments as carried out by the Company is in accordance with the requirement of Ind AS 109 Financial Instruments where in investments are carried at fair value through profit and loss. |
|Investments comprise of the most significant asset in the Companys financial statements. ||Verification of the relevant observable and unobservable inputs if any used in the valuation of investments as per requirement of Ind AS 113 Fair Value Measurement such as Net Asset Value (NAV) of the Mutual Fund schemes as declared on the reporting date. |
|In view of significance of investments of the company as specified above we consider investment valuation to be a significant key audit matter. ||We have reviewed the disclosures related to investments in the standalone financial statements as required by the relevant Ind AS. |
| ||We have carried out the following procedures in respect of impairment: |
| ||Reviewed the indicators and factors which affects the recoverability of the investments and in case of existence of such indicators whether sufficient impairment loss was provided in the books by the Company. |
Information Other than the Standalone Financial Statements and Auditors ReportThereon
The Companys Board of Directors are responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Boards Report including Annexure to Boards ReportBusiness Responsibility Report Corporate Governance and Shareholders Informationbut does not include the standalone financial statements and our auditors reportthereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the standalonefinancial statements or our knowledge obtained during the course of our audit or otherwiseappears to be materially misstated.
When we read other information if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance anddescribe actions applicable in the applicable laws and regulations.
Managements Responsibility for the Standalone Financial Statements
The Companys Board of Directors are responsible for the matters stated in Section134(5) of the Companies Act 2013 with respect to the preparation of these standalonefinancial statements 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 accounting principles generally accepted in India including theIndian Accounting Standards specified under Section 133 of the Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements and estimates that are reasonable andprudent; and the design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the standalonefinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error. statements Board of Directors are Inpreparing the standalone financial responsible for assessing the Companys ability tocontinue as a going concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless management either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso. The Board of Directors are also responsible for overseeing the Companysfinancial reporting process.
Auditors Responsibility for the Audit of Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditors report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withSAs will always detect a material misstatement when it exists. Misstatements can arisefrom fraud or error and are consider material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these standalone financial statements.
As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the standalone financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances Under Section 143(3)(i) of theCompanies Act 2013 we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by the Management.
Conclude on the appropriateness of the Managements use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on theappropriateness of this assumption. If we conclude that a material uncertainty exists weare required to draw attention in our auditors report to the related disclosures inthe standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditors report. However future events or conditions may cause the Company to ceaseto continue as a going concern.
Evaluate the overall presentation structure and content of the standalone financialstatements including the disclosures and whether the standalone financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine that a matter should notbe communicated in our report because the adverse consequences of doing so wouldreasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditors Report) Order 2016 ("theorder") issued by the Central Government in terms of Section 143 (11) of the Act wegive in the "Annexure A" a statement of the matters specified inparagraph 3 and 4 of the Order to the extent applicable.
I. 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 Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
d) In our opinion the aforesaid Standalone Financial Statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 3 of the Companies (IndianAccounting Standards) Rules 2015.
e) On the basis of the written representations received from the Directors as on March31 2021 and taken on record by the Board of Directors none of the Directors isdisqualified as on March 31 2021 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 over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in " Annexure B" to this report.
g) With respect to the matter to be included in the Auditors Report under Section197(16) of the Act: In our opinion and according to the information and explanation givento us the remuneration paid by the Company to its Directors during the current year is inaccordance with the provision of Section 197 of the Act. The remuneration paid to anyDirector is not in excess of the limit laid down under Section 197 of the Act. TheMinistry of the Corporate Affairs has not prescribed other details under Section 197 (16)of the Act which are required to commented upon by us.
h) With respect to the other matters to be included in the Auditors Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Financial Statements Refer Note No. 30 to the StandaloneFinancial Statements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses: and
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
Firm registration number: 100515W
Chetan R. Sapre
Membership No: 116952
Place : Mumbai
Date : May 19 2021
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT on the Standalone FinancialStatements of Shriram Asset Management Company Limited
(Referred to in paragraph I under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date to the members of Shriram AssetManagement Company Limited on the Standalone Financial Statements for the year ended March31 2021)
i. In respect of the Companys Property plant & equipment:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment.
b) As per the information and explanations given to us the property plant &equipment have been physically verified by the management at reasonable intervals whichin our opinion is reasonable having regard to the size of Company and nature of itsbusiness.
c) On the basis of our examination of the title deeds of immovable properties the sameare held in the name of the Company.
ii. The Company is a service company primarily rendering asset management services.Accordingly it does not hold any inventories. Accordingly reporting requirement underparagraph 3 (ii) of the Order is not applicable.
iii. According to the information and explanations given to us the Company had grantedunsecured loan to Shriram Insight Share Brokers Limited covered in the registermaintained under Section 189 of the Act which has been already repaid in the month ofDecember 2020 in respect of which
a) The terms and conditions of the grant of such loan were not prejudicial to theCompanys interest.
b) In the case of loan granted the terms of arrangements do not stipulate anyrepayment schedule and the loans were repayable on demand. Payment of interest had beenstipulated and the receipts thereof were regular.
c) There were no overdue amounts for more than ninety days in respect of the loansgranted.
iv. In our opinion and according to the information and explanation given to us theCompany has complied with the Section 185 and Section 186 of the Act in respect of loansgiven and investments made and guarantee provided. According to the information andexplanation given to us the company has not provided any security.
v. The Company has not accepted deposits from public hence directives issued by theReserve Bank of India and the provisions of Section 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the rules framed there under are not applicablefor the year under audit.
vi. To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under Clause 148(1) of the Companies Act 2013for the Company and therefore the provisions of Clause (vi) of the order are notapplicable to the Company
vii. a) According to the information and explanations given to us and according to therecords of the Company examined by us in our opinion the Company is generally regular indepositing with the appropriate authorities undisputed statutory dues including ProvidentFund Employees State Insurance Income-tax Sales Tax Service Tax Goods andService Tax duty of Custom duty of Excise Value Added Tax Cess and any other statutorydues wherever applicable. According to the information and explanations given to us noundisputed amounts payable in respect of aforesaid dues were outstanding as at March 312021 for a period of more than 6 months from the date they became payable.
b) According to the information and explanations given to us there were no dues inrespect of Income Tax Duty of Excise Duty of Customs Sales Tax Service Tax Goods andService Tax and Value Added Tax which have not been deposited on account of any dispute.
viii. The Company did not have any dues outstanding to any financial institutions/banks/ Government or to debenture holders during the year hence question of default doesnot arise.
ix. According to the information and explanations given to us and on the basis ofexamination of records the Company has not raised money by way of or raised any money byway of initial public offer/further public offer during the year.
x. According to the information and explanations given to us and on the basis of ourexamination of the records no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the year.
xi. The managerial remuneration has been paid in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the Act.
xii. According to the information and explanations given to us the Company is not aNidhi Company thus reporting requirement under paragraph 3 (xii) of the Order is notapplicable.
xiii. According to the information and explanations given to us and based on ourexamination of records of the Company the transactions entered with related parties arein compliance with provisions of Section 177 and 188 of the Act where applicable and thedetails of such transactions are disclosed in the Standalone Financial Statements asrequired by the applicable accounting standards.
xiv. During the year the Company has issued 500000 (6%) Redeemable Non-ConvertiblePreference Shares of Rs. 100/- each to its Holding Company total amounting to Rs.50000000/- to comply with the SEBI Regulations. The said amount received from theissue are invested as Fixed deposit with one of its Associate Company.
xv. According to the information and explanations given to us and based on ourexamination of records of the Company the Company during the year has not entered intoany non cash transactions with Directors or persons connected with the Directors coveredunder the provisions of Section 192 of the Act and accordingly the provisions of Clause(xv) of the Order are not applicable to the Company.
xvi. In our opinion and according to the information and explanations given to us theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.
For G. D. Apte & Co.
Firm registration number: 100515W
Chetan R. Sapre
Membership No: 116952
Place : Mumbai
Date : May 19 2021
ANNEXURE "B" TO THE INDEPENDENT AUDITORS REPORT on the StandaloneFinancial Statements of Shriram Asset Management Company Limited
(Referred to in paragraph I (f) under Report on Other Legal and RegulatoryRequirements of our report of even date of Shriram Asset Management Company Limitedon the Standalone Financial Statements for the year ended 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")
We have audited the internal financial controls over financial reporting of ShriramAsset Management ("the Company") as of March 31 2021 in conjunction with ouraudit of the Standalone Financial Statements of the Company for the year ended on thatdate.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting("the Guidance Note") issued by the Institute of Chartered Accountants of India(ICAI). These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to Companyspolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the CompaniesAct 2013.
Our responsibility is to express an opinion on the Companys internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note and the Standards on Auditing issued by the ICAI and deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial that a material weakness exists andtesting and evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditors judgmentincluding the assessment of the risks of material misstatement of the Standalone FinancialStatements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient opinion on theCompanys internal financial controls system over financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of purposes in accordance with generally accepted accountingprinciples. A companys internal financial control over financial reporting includesthose policies and procedures that
(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;
(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of Standalone Financial Statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorizations of management and directors of the Company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Companys assets that could havea material effect . onthe Standalone Financial Statements
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as of March 31 2021 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control in the Guidance Note issued by the ICAI.
For G. D. Apte & Co.
Firm registration number: 100515W
Chetan R. Sapre
Membership No: 116952
Date: May 19 2021