To the Members of FIVE X TRADECOM LIMITED
(Formerly known as Five X Finance & Investment Limited)
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying standalone Ind AS financial statements of FIVE XTRADECOM LIMITED (Formerly known as Five X Finance & Investment Limited) ("theCompany") which comprise the Balance Sheet as at 31st March 2019 and the statementof Profit and Loss (including Other Comprehensive Income) Statement of changes in equityand statement of cash flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act2013 "the Act" in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 asamended "Ind AS" and other accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2019 and profit/loss including totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
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 responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.
Information Other than the Standalone Ind AS Financial Statements and Auditor's ReportThereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's report thereon.
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 and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
Responsibility of Management for the Standalone Ind AS Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese standalone financial statements that give a true and fair view of the financialposition financial performance (changes in equity) and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act.
This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.
The Board of Directors are also responsible for overseeing the company's financialreporting process
Auditor's Responsibility for the Audit of the Standalone Ind AS 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 standalone 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 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 Company'sability to continue as a going concern.
If we conclude that a material uncertainty exists we are required to draw attention inour auditor's report to the related disclosures in the standalone financial statements orif such disclosures are inadequate to modify our opinion. Our conclusions are based on theaudit evidence obtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as 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.
Materiality is the magnitude of misstatements in the standalone financial statementsthat individually 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 standalone financial statementsof the current period. We describe these matters in our auditor's report unless law orregulation precludes public disclosure about the matter or when in extremely rarecircumstances we determine that a matter should not be communicated in our report becausethe adverse consequences of doing so would reasonably be expected to outweigh the publicinterest 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 sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure B" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.
As required by Section 143(3) of the Act we report that:
We have sought and obtained all the information and explanations which to the best ofour knowledge and belief were necessary for the purposes of our audit.
a. 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.
b. The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
c. In our opinion the aforesaid standalone financial statements comply with the IND ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.
d. 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 aredisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (2) of the Act.
e With respect to other matters to be included in the auditor's report in accordancewith the requirement of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its Directors during the year is inaccordance with with the provisions of section 197 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 A". g. With respect to the other matters tobe included in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according tothe explanations given to us:
1 The Company has represented that it does not have any pending litigations which wouldimpact its financial position. Refer Note 16 to the Standalone IND AS FinancialStatements.
2. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
3. The Company is not liable to transfer any amount to the Investor Education andProtection Fund. Therefore there has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
For KSPM & ASSOCIATES
CA Sanjay Shah
M. No. 116251
Date: 30th May 2019
ANNEXTURE A' TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONEIND AS FINANCIAL STATEMENTS OF FIVE X TRADECOM LIMITED (Formerly known as Five X Finance& Investment Limited)
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 FIVE XTRADECOM LIMITED (Formerly known as Five X Finance & Investment Limited)(the Company') as of 31 March 2019.
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 (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company's policies the safeguardingof its assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
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 deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were 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 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 auditors' judgment 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 authorizations of theManagement 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 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.
According to the information and explanations given to us and based on our audit thefollowing material weakness have been identified as at March 312019.
a) The Company did not have an appropriate internal control system for granting LoansDemand and other loans given are governed by the Board Policies. Considering the closemonitoring of Board no appraisal renewal Policies Procedure Committee or documentshave been prescribed and executed.
b) The Company's internal control system is not commensurate to the size and scale ofoperation over purchase and sale of shares and inventory and for expenses incurred.
A material weakness'isdeficiencyor a combination of deficiencies in internalfinancial control over financial reporting such as there is a reasonable possibility thata material misstatement of the Company's annual or interim financial statements will notbe prevented or detected on a timely basis.
In our opinion except for the effects/possible effects of the material weaknessdescribed above on the achievement of the objectives of the control criteria the Companyhas maintained in all material respects an adequate internal financial controls systemover financial reporting and such internal financial controls over financial reportingwere operating effectively as at 31st March 2019 based on the internal control overfinancial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.
We have considered the material weakness identified and reported above in determiningthe nature timing and extent of audit tests applied in our audit of the 31st March 2019financial statements of the Company and the material weakness does not affect our opinionof the financial statements of the Company.
For KSPM & ASSOCIATES
CA Sanjay Shah
M. No. 116251
Date: 30th May 2019.
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirement's section of our report of even date)
Reports on Companies (Auditor's Report) Order 2016 (the Order') issued by theCentral Government in terms of Section 143(11) of the Companies Act 2013 (the Act')of FIVE X TRADECOM LIMITED (Formerly known as Five X Finance & Investment Limited):
1. In respect of company's Fixed Assets:
(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) As explained to us fixed assets have been physically verified by the management atreasonable intervals; no material discrepancies were noticed on such verification.
(c) The Company does not hold any Immovable properties. Hence this clause is notapplicable
2. As the Company does not hold any inventory the Clause pertaining to reasonablenessof verification and materiality of discrepancy is not applicable.
3. The Company has granted loans to entities covered in the register maintained undersection 189 of Companies Act 2013.
a) The terms and condition of the grant of such loan are not prejudicial to theInterest of the Company.
b) No schedule of repayment of principal and payment of interest has been stipulated.
c) There are no overdue amounts in respect of the loan granted to a body corporatelisted in the register maintained under section 189 of the Act
4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.
5. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits in contravention of Directives issued by ReserveBank of India and the provisions of section 73 to 76 or any other relevant provisions ofthe Act and the rules framed there under where applicable. No order has been passed bythe Company Law Board or National Company Law Tribunal or Reserve Bank of India or anycourt or any other tribunal.
6. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act for any services rendered by the Company.
7. According to the information and explanation given to us in respect of statutorydues:
(a) According to the records of the Company the Company is generally regular indepositing with appropriate authorities undisputed statutory dues statutory duesapplicable to it.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of income tax wealth tax service Tax sales tax goods and servicetax custom duty excise duty and cess were in arrears as at 31st March 2019 for aperiod of more than six months from the date they became payable
(c) According to the information and explanations given to us there are no dues ofsales tax income tax custom duty wealth tax excise duty and cess that have not beendeposited with appropriate authorities on account of any dispute.
8. Based on our audit procedures and according to the information and explanationsgiven to us we are of the opinion that the company has not borrowed from financialInstitution Debentures and Government and the question of default does not arise.
9. The Company has not raised money by initial public offer or further public offerduring the year. The Company has not taken any term loans during the year.
10. Based upon the audit procedures performed and according to the information andexplanations given to us no fraud by the company or any fraud on the company by itsofficers or employees has been noticed or reported during the course of our audit thatcauses the financial statements to be materially misstated.
11. The Managerial remuneration has been paid or provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theCompanies Act.
12. The Company is not a Nidhi Company and hence reporting under clause 3(xii) of theOrder is not applicable.
13. Based upon the audit procedures performed and according to the information andexplanations given to us all transactions with related parties are in compliance withsections 177 and 188 of Companies Act 2013 where applicable and the details have beendisclosed in the Financial statements etc. as required by the applicable accountingstandards.
14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year under review and hence thisclause in not applicable
15. The Company has not entered into any non-cash transactions with directors orpersons connected with him and hence provision of Section 192 of the Act is notapplicable.
16. As per provisions of Section 45-IA of RBI Act 1934a Company is classified undervarious categories of Finance Company if a Company's Financial assets are more than 50% ofthe total assets of the Company and Gross Income from Financial Activities constitute morethan 50% of Gross Income. The Company is required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934 as both the Financial Assets exceeds 50% of totalassets as well as Income from Financing activities exceeds 50% of Gross Income during theyear.
For KSPM & ASSOCIATES
CA Sanjay Shah
M. No. 116251
Date: 30th May 2019