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5Paisa Capital Ltd.

BSE: 540776 Sector: Financials
NSE: 5PAISA ISIN Code: INE618L01018
BSE 00:00 | 24 Apr 5Paisa Capital Ltd
NSE 05:30 | 01 Jan 5Paisa Capital Ltd
OPEN 147.00
PREVIOUS CLOSE 150.00
VOLUME 667
52-Week high 270.95
52-Week low 93.05
P/E
Mkt Cap.(Rs cr) 370
Buy Price 141.00
Buy Qty 1.00
Sell Price 159.50
Sell Qty 21.00
OPEN 147.00
CLOSE 150.00
VOLUME 667
52-Week high 270.95
52-Week low 93.05
P/E
Mkt Cap.(Rs cr) 370
Buy Price 141.00
Buy Qty 1.00
Sell Price 159.50
Sell Qty 21.00

5Paisa Capital Ltd. (5PAISA) - Auditors Report


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Company auditors report

To the Members of 5paisa Capital Limited

REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS

Opinion

We have audited the standalone financial statements of 5paisa Capital Limited("the Company") which comprise the Balance Sheet as at 31st March 2019 theStatement of Profit and Loss and Statement of Cash Flows for the year then ended and asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "the 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 (the "Act") in the manner so required and give a true andfair view in conformity with the Accounting Standards prescribed under section 133 of theAct and other accounting principles generally accepted in India of the state of affairsof the Company as at March 31 2019 loss and cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Companies Act 2013. 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 ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the financial statements.

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 Response to Key Audit Matter
The company has incurred losses which are mainly due to sales promotion and advertisement expenditure incurred in the last 3 years. Under Accounting Standard 22 – Accounting for taxes on Income deferred tax assets can be recognised only to the extent there is virtual certainty supported by convincing evidence that sufficient future taxable income will be available against which such deferred tax assets can be realised. Our audit procedures included among others examining the future projections which are based on the judgement of the management taking into account that the company's volume of operations has substantially increased in the last year and the expenditure on sales promotion and advertisement is likely to be less in future. The management has also determined that the profits which will be earned in the future will be sufficient for setting off the carried forward losses in accordance with the provisions of the Income Tax Act 1961.
Determination of such virtual certainty is a matter of judgement based on convincing evidence. As a result the recognition of the deferred tax asset was significant to our audit. Accordingly we have found the future projections made by management for the purpose of recognition of deferred tax asset in the financial statements to be appropriate.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Board'sReport including Annexure to Board's Report and other information included in the AnnualReport but does not include the financial statements and our auditor's 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 have performed on the other information obtained prior to thedate of this auditor's report we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and Those Charged with Governance for the FinancialStatements

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 financial statements that givea true and fair view of the financial position financial performance and cash flows ofthe Company in accordance with the Accounting Standards and other accounting principlesgenerally accepted in India. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the financial statements the Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe management either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the 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 auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis 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 financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.

Obtain an understanding of internal financial controls relevant to the audit in orderto design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act 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 management.

Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the ability ofthe Company to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in the financial statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's 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 financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

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 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's 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

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder.

2. 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 of the financialstatements.

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 and the Statement of Cash Flowsdealt with by this Report are in agreement with the books of account maintained for thepurpose or preparation of the financial statements.

d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 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 operating effectiveness of such controls refer to ourseparate Report in "Annexure B".

g) With respect to the other matters to be included in the Auditor's 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 managing director during the yearis in accordance 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 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 financial statements – Refer Note 29 of the Notes to the FinancialStatements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For V. Sankar Aiyar & Co.
Chartered Accountants
(FRN 109208W)
Place: Mumbai
Date: 16th April 2019
(G.SANKAR)
(M.No.46050)

ANNEXURE A TO AUDITOR'S REPORT

ANNEXURE REFERRED TO IN OURR EPORT OF EVEN DATE TO THE MEMBERS OF 5PAISA CAPITALLIMITED ON THE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2019

(i) (a) The company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) As explained to us the assets have been physically verified by the management inaccordance with a phased programme of verification which in our opinion is reasonableconsidering the size of the Company and nature of its fixed assets. According to theinformation and explanations given to us no material discrepancies have been noticed onsuch physical verification.

(c) The Company does not have any immovable property. Therefore paragraph 3(i)(c) ofthe Order is not applicable to the Company.

(ii) The company is trading in securities on proprietary basis and the securities heldat the year-end has been classified as inventory and such inventory is verified by themanagement during the year with reference to third party evidence like Demat statement.There were no material discrepancies noticed during such verification.

(iii) According to the information and explanations given to us the company has notgranted any loans secured or unsecured to Companies Firms Limited LiabilityPartnerships or other parties covered in the register maintained under section 189 of theAct. Therefore paragraph 3(iii) of the Order is not applicable to the Company.

(iv) According to the information and explanations given to us the company has notgranted any loans investments guarantees and security to which provisions of section 185and 186 of the Act apply. Therefore paragraph 3(iv) of the Order is not applicable to theCompany.

(v) The Company has not accepted any deposits from the public within the meaning ofSection 73 to 76 or any other relevant provisions of the Act and Rules framed thereunder.No order has been passed by the Company Law Board or National Company Law Tribunal orReserve Bank of India or any court or other tribunal.

(vi) According to the information and explanations given to us in respect of the classof industry the company falls under the Central Government has not prescribed themaintenance of cost records under Section 148(1) of the Act. Therefore paragraph 3(vi) ofthe Order is not applicable to the Company.

(vii) (a) According to the information and explanations given to us the Company isgenerally regular in depositing undisputed statutory dues including provident fundemployees state insurance income tax service tax sales tax value added tax goods andservices tax cess and other statutory dues as applicable to the Company with theappropriate authorities. Further as explained there are no undisputed statutory duesoutstanding for more than six months as at 31st March 2019 from the date they becamepayable.

(b) According to the information and explanations given to us and records of theCompany examined by us there are no dues of Income Tax Wealth Tax Sales Tax ServiceTax Value Added Tax Goods and Services Tax Excise Duty Customs Duty and Cess whichhave not been deposited on account of any dispute.

(viii) According to the information and explanation given to us the company has notdefaulted in repayment of loans or borrowing to banks or financial institutions. TheCompany has not taken any loans or borrowings from Government and does not have any duesto debenture holders.

(ix) According to the information and explanations given to us the Company has notraised any moneys by way of initial public offer or further public offer (including debtinstruments) and term loans during the year. Therefore paragraph 3(ix) of the Order isnot applicable to the Company. (x) According to the information and explanations given tous and based on the audit procedures performed and the representations obtained from themanagement we report that no fraud by the company or on the Company by its officers oremployees having a material misstatement on the financial statements has been noticed orreported during the period under audit.

(xi) According to the information and explanations given to us and based onverification of records the managerial remuneration has been paid in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V of theCompanies Act 2013. (xii) The Company is not a Nidhi Company and hence clause (xii) ofthe order is not applicable to the Company.

(xiii) According to the information and explanation given to us and based onverification of the records and approvals of the Audit Committee all transactions withthe related parties are in compliance with sections 177 and 188 of Companies Act 2013where applicable and the details have been disclosed in the Financial Statements etc. asrequired by the applicable accounting standards.

(xiv) The company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.

(xv) According to the information and explanations given to us the company has notentered into any non-cash transactions with directors or persons connected with him.Therefore paragraph 3(xv) of the Order is not applicable to the Company.

(xvi) According to the information and explanations given to us the company is not aNon Banking Finance Company and therefore is not required to be registered under Sec 45-IAof the Reserve Bank of India Act 1934.

For V. Sankar Aiyar & Co.
Chartered Accountants
(FRN 109208W)
Place: Mumbai (G.SANKAR)
Date: 16th April 2019 (M.No.46050)

ANNEXURE B TO AUDITOR'S REPORT

ANNEXURE REFERRED TO IN OURR EPORT OF EVEN DATE TO THE MEMBERS OF 5PAISA CAPITALLIMITED ON THE STANDALONE ACCOUNTS FOR THE YEAR ENDED 31ST MARCH 2019

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of 5paisaCapital Limited ("the Company") as of March 31st 2019 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

The Company's 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 Reportingissued by the Institute of Chartered Accountants of India.

These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to 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 Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material 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 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 judgement including the assessment of the risks ofmaterial misstatement 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 systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control 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 andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 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.

Opinion

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 Institute of CharteredAccountants of India.

For V. Sankar Aiyar & Co.
Chartered Accountants
(FRN 109208W)
Place: Mumbai
Date: 16th April 2019
(G.SANKAR)
(M.No.46050)