Independent Auditors
To the Members of Kotak Securities Limited
Report on the Financial Statements
1. We have audited the accompanying financial statements of Kotak Securities Limited
(the "Company"), which comprise the Balance Sheet as at March 31, 2014, and the
Statement of Profit and Loss and Cash Flow Statement for the year then ended, and a
summary of significant accounting policies and other explanatory information, which we
have signed under reference to this report.
Managements Responsibility for the Financial Statements
2. The Companys Management is responsible for the preparation of these financial
statements that give a true and fair view of the financial position, financial performance
and cash flows of the Company in accordance with the Accounting Standards notified under
the Companies AcRs. 1956 of India (the "Act") read with the General Circular 15/
2013 dated September 13, 2013 of the Ministry of Corporate Affairs in respect of Section
133 of the Companies Act, 2013. This responsibility includes the design, implementation
and maintenance of internal control relevant to the preparation and presentation of the
financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
Auditors Responsibility
3. Our responsibility is to express an opinion on these financial statements based on
our audit. We conducted our audit in accordance with the Standards on Auditing and other
applicable authoritative pronouncements issued by the Institute of Chartered Accountants
of India. Those Standards require that we comply with ethical requirements and plan and
perform the audit to obtain reasonable assurance about whether the financial statements
are free from material misstatement.
4. An audit involves performing procedures to obtain audit evidence, about the amounts
and disclosures in the financial statements. The procedures selected depend on the
auditors judgment, including the assessment of the risks of material misstatement of the
financial statements, whether due to fraud or error. In making those risk assessments, the
auditors consider internal control relevant to the Companys preparation and fair
presentation of the financial statements in order to design audit procedures that are
appropriate in the circumstances but not for the purpose of expressing an opinion on the
effectiveness of the entitys internal control. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of the accounting
estimates made by Management, as well as evaluating the overall presentation of the
financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion.
Opinion
6. In our opinion, and to the best of our information and according to the explanations
given to us, the accompanying financial statements give the information required by the
Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
(a) in the case of the Balance Sheet, of the state of affairs of the Company as at
March 31, 2014;
(b) in the case of the Statement of Profit and Loss, of the profit for the year ended
on that date; and
(c) in the case of the Cash Flow Statement, of the cash flows for the year ended on
that date.
Report on Other Legal and Regulatory Requirements
7. As required by the Companies (Auditors Report) Order, 2003, as amended by the
Companies (Auditors Report) (Amendment) Order, 2004, issued by the Central Government of
India in terms of sub-section (4A) of section 227 of the Act (hereinafter referred to as
the "Order"), and on the basis of such checks of the books and records of the
Company as we considered appropriate and according to the information and explanations
given to us, we give in the Annexure a statement on the matters specified in paragraphs 4
and 5 of the Order.
8. As required by section 227(3) of the Act, we report that:
(a) We have obtained all the information and explanations which, to the best of 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 the
Company so far as appears from our examination of those books;
(c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with
by this Report are in agreement with the books of account;
(d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this report comply with the Accounting Standards notified under
the Act read with the General Circular 15/ 2013dated September 13, 2013 of theMinistry of
Corporate Affairs in respect of Section 133 of the CompaniesAct, 2013;
(e) On the basis of written representations received from the directors as on March 31,
2014, and taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2014, from being appointed as a director in terms of clause (g) of
sub-section (1) of section 274 of the Act.
|
For Price Waterhouse |
|
Firm Registration Number: 301112E |
|
Chartered Accountants |
|
Vivek Prasad |
| Mumbai |
Partner |
| April 25, 2014 |
Membership Number : 104941 |
Annexure to Independent Auditors Report
Referred to in paragraph 7 of the Independent Auditors Report of even date to the
members of Kotak Securities Limited on the financial statements for the year ended March
31, 2014
i. (a) The Company is maintaining proper records showing full particulars, including
quantitative details and situation, of fixed assets.
(b) The fixed assets are physically verified by the Management according to a phased
programme designed to cover all the items over a period of two years which, in our
opinion, is reasonable having regard to the size of the Company and the nature of its
assets. Pursuant to the programme, a portion of the fixed assets has been physically
verified by the Management during the year and no material discrepancies have been noticed
on such verification.
(c) In our opinion, and according to the information and explanations given to us, a
substantial part of fixed assets has not been disposed off by the Company during the year.
ii. (a) The securities held as stock in trade have been confirmed by the Management
with the statement of holdings provided by the National Securities Depository Limited
(NSDL) at the financial year end. In our opinion, the frequency of confirmation is
reasonable.
(b) In our opinion, the procedures of confirmation of securities held as stock in trade
followed by the Management are reasonable and adequate in relation to the size of the
Company and the nature of its business.
(c) On the basis of our examination of the records of the Company, relating to
securities held as stock in trade, in our opinion, the Company has maintained proper
records of stock in trade and no material discrepancies between the book records and the
statement of holdings provided by NSDL have been noticed.
iii. (a) The Company has placed fixed deposits with its holding company covered in the
register maintained under Section 301 of the Act. The maximum amount involved during the
year and the year end balance of such fixed deposits aggregates Rs. 146,237 lakhs and Rs.
131,458 lakhs respectively.
(b) In our opinion, the rate of interest and other terms and conditions of such
deposits are not prima facie prejudicial to the interest of the Company.
(c) In respect of the aforesaid fixed deposits placed, the holding company is repaying
the principal amounts, as stipulated, and is also regular in payment of interestas
applicable.
(d) In respect of the aforesaid fixed deposits, there is no overdue amount more than
Rs. One Lakh.
(e) The Company has taken secured overdraft facility from its holding company covered
in the register maintained under Section 301 of the Act. The overdraft facility provided
to the Company during the year aggregates Rs. 15,000 lakhs and the year end overdraft
balance aggregates Rs. 384 lakhs.
(f) In our opinion, the rate of interest and other terms and conditions of such
overdraft are not prima facie prejudicial to the interest of the Company.
(g) In respect of the aforesaid overdraft, the Company is regular in repaying the
principal amounts, as stipulated, and is also regular in payment of interest, as
applicable.
iv. In our opinion, and according to the information and explanations given to us,
there is an adequate internal control system commensurate with the size of the Company and
the nature of its business for the purchase of securities held as stock in trade, fixed
assets and for the sale of services. Further, on the basis of our examination of the books
and records of the Company, and according to the information and explanations given to us,
we have neither come across, nor have been informed of, any continuing failure to correct
major weaknesses in the aforesaid internal control system.
v (a) According to the information and explanations given to us, we are of the opinion
that the particulars of all contracts or arrangements that need to be entered into the
register maintained under section 301 of the Companies Act, 1956 have been so entered.
(b) In our opinion, and according to the information and explanations given to us, the
transactions made in pursuance of such contracts or arrangements and exceeding the value
of Rs. Five Lakhs in respect of any party during the year have been made at prices which
are reasonable having regard to the prevailing market prices at the relevant time.
vi. The Company has not accepted any deposits from the public within the meaning of
Sections 58A and 58AA of the Act and the rules framed there under.
vii. In our opinion, the Company has an internal audit system commensurate with its
size and the nature of its business.
viii. The Central Government of India has not prescribed the maintenance of cost
records under clause (d) of sub-section (1) of Section 209 of the Act for any of the
products of the Company.
ix. (a) According to the information and explanations given to us and the records of
the Company examined by us, in our opinion, the Company is regular in depositing the
undisputed statutory dues, including provident fund, investor education and protection
fund, employees state insurance, income tax, sales tax, wealth tax, service tax, customs
duty, excise duty and other material statutory dues, as applicable, with the appropriate
authorities
(b) According to the information and explanations given to us and the records of the
Company examined by us, the particulars of dues of income tax, sales tax, wealth tax,
service tax, customs duty and excise duty as at March 31, 2014 which have not been
deposited on account of a dispute, are as follows:
| Name of the statute |
Nature of dues |
Amount in Lakhs) |
Period to which the amount relates |
Forum where the dispute is pending |
| The Central Excise Act, 1944 |
Service tax |
33 |
Financial Years 1999- 2003 |
Custom Excise & Service Tax Appellate Tribunal |
| The Central Excise Act, 1944 |
Service tax |
10 |
Financial Years 2004-2007 |
Additional Commissioner of Service tax |
| The Central Excise Act, 1944 |
Service tax |
9 |
Financial Years 2002-2007 |
Joint Commissioner of Service tax |
| The Central Excise Act, 1944 |
Service tax |
50 |
Financial Years 2007-10 |
Commissioner of Service tax |
| The Income Tax Act, 1961 |
Income Tax |
190* |
Assessment Year 2007-08 |
Commissioner of Income Tax (Appeal) |
*Also refer note 27 (a) to the Financial Statements.
x. The Company has no accumulated losses as at the end of the financial year and it has
not incurred any cash losses in the financial year ended on that date or in the
immediately preceding financial year.
xi. According to the records of the Company examined by us and the information and
explanation given to us, the Company has not defaulted in repayment of dues to any
financial institution or bank or debenture holders as at the balance sheet date.
xii. In our opinion, the Company has maintained adequate documents and records in the
cases where it has granted loans and advances on the basis of security by way of pledge of
shares, debentures and other securities.
xiii. As the provisions of any special statute applicable to chit fund/ nidhi/ mutual
benefit fund/ societies are not applicable to the Company, the provisions of Clause
4(xiii) of the Order are not applicable to the Company.
xiv. In our opinion, the Company has maintained proper records of transactions and
contracts relating to dealing or trading in shares, securities, debentures and other
investments during the year and timely entries have been made therein. Further, such
securities have been held by the Company in its own name or are in the process of transfer
in its name, except to the extent of the exemption granted under Section 49 of the Act.
xv. In our opinion, and according to the information and explanations given to us, the
Company has not given any guarantee for loans taken by others from banks or financial
institutions during the year. Accordingly, the provisions of Clause 4(xv) of the Order are
not applicable to the Company.
xvi. The Company has not raised any term loans. Accordingly, the provisions of Clause
4(xvi) of the Order are not applicable to the Company.
xvii. According to the information and explanations given to us and on an overall
examination of the balance sheet of the company, we report that the no funds raised on
short-term basis have been used for long-term investment.
xviii. The Company has not made any preferential allotment of shares to parties and
companies covered in the register maintained under Section 301 of the Act during the year.
Accordingly, the provisions of Clause 4(xviii) of the Order are not applicable to the
Company.
xix. The Company has not issued any debentures during the year and does not have any
debentures outstanding as at the beginning of the year and at the year end. Accordingly,
the provisions of Clause 4(xix) of the Order are not applicable to the Company
xx. The Company has not raised any money by public issues during the year. Accordingly,
the provisions of Clause 4(xx) of the Order are not applicable to the Company.
xxi. During the course of our examination of the books and records of the Company,
carried out in accordance with the generally accepted auditing practices in India, and
according to the information and explanations given to us, we have neither come across any
instance of material fraud on or by the Company, noticed or reported during the year, nor
have we been informed of any such case by the Management.
|
For Price Waterhouse |
|
Firm Registration Number: 301112E |
|
Chartered Accountants |
|
Vivek Prasad |
| Mumbai |
Partner |
| April 25, 2014 |
Membership Number 104941 |
+91-9892691696
