To the Members of Nam Securities Limited
Report on the Financial Statements
We have audited the financial statements of Nam Securities Limited (theCompany) having its regd. Office at 213 Arunachal Building 19 Barakhamba RoadNew Delhi- 110001 which comprise the Balance Sheet as at March 31 2019 and theStatement of Profit and Loss and Statement of Cash Flow for the year then ended and notesto the financial statements including a summary of significant accounting policies andother explanatory information. (together referred as financial statements).
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 (Act) in the manner so required and give a true and fairview in conformity with accounting principals generally accepted in India of the state ofaffairs of the Company as at March 31 2019 and profit / loss and its cash flows for thefor the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) Of the Companies Act 2013. Our responsibility under those SAs arefurther described in the Auditor's Responsibility for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Companies Act 2013 and the Rules thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our opinion.
Key Audit Matters
Key audit matters are these matter that in our professional judgment were ofsignificant in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of financial; statements as a whole an informing our opinion thereon and we do not provide a separate opinion on these matters.
n accordance with SA 701
|Key Audit Matter ||How the matter was addressed in our Audit |
|IT systems and controls || |
|The Company's key financial accounting and reporting processes are highly dependent on the information systems including automated controls in implemented in the Information Technology (IT) systems such that there exists a risk that gaps in the IT control environment could result in the financial accounting and reporting records being materially misstated. ||We have focused on General IT controls i.e. access management change management and computer operations control and IT application controls on specific system generated reports and system/application processing over key financial accounting reporting systems and control systems for recording of income. |
| ||Our audit procedures to assess the effectiveness of IT system included the following: |
|We have identified IT systems and controls' as Key audit matter since for the primary business (broking income) the Company relies on automated processes and controls for recording of income. || Performed walkthroughs to evaluate the design and implementation of key automated controls. Involved our IT specialist to test the effectiveness of identified key IT automated controls and IT systems. IT specialist tested relevant key controls operating over IT in relation to financial accounting and reporting systems including general controls i.e. system access and system change management and computer operations. |
| || IT specialists tested design and operating effectiveness of key controls over user access management which includes granting access right new user creation removal of user rights and other preventive controls. |
| || For a selected group of key controls over financial and reporting system IT specialists independently performed procedures to determine that these controls remained unchanged during the year or were changed following the standard change management process. |
| || Other areas that were independently assessed included password policies security configurations system generated reports and system interface controls. |
| || Evaluating the design implementation and operating effectiveness of identified significant accounts related IT automated controls which are relevant for accuracy of system calculation and consistency of data transmission. |
The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sAnnual Report but does not include financial statements and our auditors' report thereon.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.
Management's Responsibility for the Financial Statements
The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Companies Act 2013 (the Act) with respect to preparation ofthese financial statements that give a true and fair view of the state of affairsprofit/loss and other comprehensive income financial performance and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standard specified u/s 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with provisions of theAct for safeguarding of the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.
In preparing the financial statements management and Board of Directors areresponsible 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 intend to liquidate the Company or to ceaseoperations or has no realistic alternatives but to do so.
Board of Directors is also responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibility for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a as a whole are free from material misstatement whether due to fraud orerror and to issue an auditor's report that includes our opinion. Reasonable assurance isa high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exits. Misstatement can arisefrom fraud and error and are considered material if individually or in the aggregatethey could reasonably be expected to influence the economic decisions of users taken onthe basis of these 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 financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal 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 made by management.
Conclude on the appropriateness of management's 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 the company'sability to continue as a going concern. If we conclude that a material uncertainly existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statement or If such disclosures are inadequate to modify our opinion. Ourconclusions 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 asgoing concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditors' report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 (the Order)issued by the Central Government of India in terms of Section 143 (ll) of the Act We givein the Annexure A a statement on the matters specified in Para(s) 3 & 4 of the Orderto the extent applicable.
1. 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 purpose of our audit;
b) In our opinion proper books of accounts as required by law have been kept byCompany so far as it appears from our examination of books.
c) The Balance sheet Statement of Profit and Loss & Cash Flow Statement dealt withby this Report are in agreement with the books of account;
d) In our opinion the aforesaid financial statements comply with Accounting Standardsspecified under section 133 of the Act.
e) On the basis of written representations received from the directors as on31.03.2019 and taken on record by the Board of Directors None of the directors aredisqualified as on March 31 2019 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 operation effectiveness of such controls refer to ourseparate Report in Annexure B
2. With respect to the other matters to be included in the Auditors' Report inaccordance with the Rule 11 of the Companies (Audit and Auditors) Rules 2014 in ouropinion and to the best of our information and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financialpositions.
ii. The company has made provisions as required under the applicable law or AccountingStandards for material foreseeable losses if any and the Company didn't have any longterm contracts including derivatives contracts for which there were any materialforeseeable losses.
iii. That there were no amounts which are required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv. The disclosures in the financial statements regarding holdings as well as dealingsin specified notes during the period from 8.11.2016 to 30.12.2016 have not been made inthese financial statements since they do not pertain to the financial year ended 31stMarch 2019.
3. With respect to the matter to be included in the Auditors' Report under section197(16):
In our opinion and according to the information and explanations given to us theremuneration paid by the company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.
| ||FOR RAJ K SRI & CO. |
| ||CHARTERED ACCOUNTANT |
| ||Firm No. 014141N |
|Place: New Delhi ||Sd/- |
|Date: 30.05.2019 ||(Sumit Kumar Gupta) |
| ||Partner |
| ||M.No.529461 |
Annexure A to the Independent Auditors' Report
The Annexure referred to in our Independent Auditor's Report to the members of theCompany on the financial statements for the year ended 31 March 2019 we report that:
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a regular programme of physical verification of its fixed assets bywhich fixed assets are verified in at the end of the financial year. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. No material discrepancies were noticed on suchverification.
(c) The Company doesn't have any immovable properties. Accordingly para 3(i) (c.) Ofthe Order is not applicable.
(ii) The Company doesn't hold any securities in physical form. The securities for tradeand held in dematerialized form are verified with the statement of holding received by themanagement form the custodian at regular intervals. No material discrepancies were noticedon such verifications.
(iii) The Company has not granted any loans secured or unsecured to companies firmsLLPs or other parties covered in the register maintained under Section 189 of the ActAccordingly para 3(iii) of the Order is not applicable.
iv. In our opinion and according to the information and explanations given to us theCompany has not granted any loans made investments or provided guarantees and securitiesunder section 185 or 186 of the Act Accordingly para 3(iv) of the Order is notapplicable.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted deposits falling under the directives issued by the Reserve Bankof India and the provisions of Sections 73 to 76 or any other relevant provisions of theCompanies Act and the rules framed thereunder.
vi. The Central Government has not prescribed the maintenance of cost records undersection 148 of the Companies Act 2013 for any of the services rendered by the Company.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/ accrued in the books ofaccount in respect of undisputed statutory dues including income-tax goods and servicestax and other material statutory dues have generally been regularly deposited during theyear by the Company with the appropriate authorities. As explained to us the Company didnot have any dues on account of provident fund employees' state insurance sales taxduty of customs duty of excise value added tax & cess.
According to the information and explanations given to us no undisputed amountspayable in respect of Income tax Goods and Services Tax and other material statutory dueswere in arrears as at 31 March 2019 for a period of more than six months from the datethey became payable.
(b) According to the information and explanations given to us there are no dues ofincome tax service tax GST or any other statutory dues that have not been deposited bythe Company on account of disputes.
(viii) According to the information and explanations given to us the Company did nothave any outstanding term loans debentures and dues to financial institutions during theyear. Accordingly paragraph 3(viii) of the Order is not applicable.
(viii) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) or term loans. Accordingly paragraph 3(ix) ofthe Order is not applicable.
(ix) According to the information and explanations given to us no material fraud bythe Company or on the Company by its officers or employees has been noticed or reportedduring the year.
(xi) According to the information and explanations give to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.
(xii) The Company is not a nidhi company. Accordingly paragraph 3(xii) of the Order isnot applicable.
(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.
(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For: RAJ K SRI & CO |
|Place: New Delhi ||CHARTERED ACCOUNTANTS |
|Date: 30.05.2019 ||Firm Regn. No.: 014141N |
| ||Sd/- |
| ||(SUMIT KUMAR GUPTA) |
| ||Partner M. No.529461 |
Annexure B to the Independent Auditor's Report of even date on financial statements ofNam Securities Limited
Report on the internal financial controls with reference to the aforesaid financialstatements under Clause (i) of Subsection 3 of Section 143 of the Companies Act 2013(Referred to in paragraph 1 (f) under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
In conjunction with our audit of the financial statements of Nam Securities Limited("the Company") as of and for the year ended March 31 2019 We have audited theinternal financial controls over financial reporting of the Company as of that date.
Management's Responsibility for Internal Financial Controls
The Company's Board of Directors is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantof India (the "ICAI"). These responsibilities include the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of the Company's business includingadherence to Company's Policies the safeguarding of assets the prevention and detectionof frauds and errors the accuracy and completeness of the accounting records and thetimely preparation of reliable financial information as required under the Companies Act2013.
Our responsibility is to the express an opinion on the Company's Internal FinancialControls over Financial Reporting based on our audit. We conducted our audit in accordancewith the guidance note on audit of Internal Financial Controls Over Financial Reportingand Standards on Auditing issued by the ICAI and deemed to be prescribed under section143(10) of the Act to the extent applicable to an Audit of Internal Financial Controlsboth applicable to an audit of Internal Financial Controls and both issued by the ICAI.Those Standards and the Guidance Note require that We comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate InternalFinancial Controls over Financial Reporting was established and maintained and if suchcontrols operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe Internal Financial Controls over Financial Reporting and their operatingeffectiveness. Our audit of Internal Financial Controls over Financial Reporting includedobtaining an understanding of Internal Financial Controls over Financial Reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risk ofmaterial mis-statement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's Internal Financial Controls overFinancial Reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's Internal Financial Controls over Financial Reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purpose in accordance with generallyaccepted accounting principles. A Company's Internal Financial Controls over FinancialReporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditure of the company are being made only in accordance with authorization ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of Internal Financial Controls over FinancialReporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of The Internal Financial Controls over FinancialReporting to future provides are subject to the risk that Internal Financial Controls overFinancial Reporting may become inadequate because of changes in conditions or that thedegree of compliance with the policies or procedures may deteriorate.
In our opinion 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 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls over Financial Reporting issued by the ICAI.
| ||For: RAJ K SRI & CO |
|Place: New Delhi ||CHARTERED ACCOUNTANTS |
|Date: May 30 2019 ||Firm Regn. No.: 014141N |
| ||Sd/- |
| ||(SUMIT KUMAR GUPTA) |
| ||Prop. (M.No.529461) |