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Paisalo Digital Ltd.

BSE: 532900 Sector: Financials
NSE: PAISALO ISIN Code: INE420C01059
BSE 00:00 | 03 Feb 61.80 -6.25
(-9.18%)
OPEN

70.00

HIGH

70.00

LOW

58.85

NSE 00:00 | 03 Feb 63.00 -4.85
(-7.15%)
OPEN

68.10

HIGH

68.70

LOW

58.95

OPEN 70.00
PREVIOUS CLOSE 68.05
VOLUME 83781
52-Week high 97.20
52-Week low 58.40
P/E 32.53
Mkt Cap.(Rs cr) 2,775
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 70.00
CLOSE 68.05
VOLUME 83781
52-Week high 97.20
52-Week low 58.40
P/E 32.53
Mkt Cap.(Rs cr) 2,775
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Paisalo Digital Ltd. (PAISALO) - Auditors Report

Company auditors report

TO

THE MEMBERS OF

M/S PAISALO DIGITAL LIMITED

NEW DELHI

REPORT ON THE STANDALONE FINANCIAL STATEMENTS OPINION

We have audited the accompanying Standalone Financial Statements of M/S PAISALO DIGITALLIMITED ("the Company") which comprises the Balance Sheet as at 31st March 2022the Statement of Profit and Loss (including Statement of Other Comprehensive Income)Statement of changes in Equity and Statement of Cash Flows for the year ended on thatdate and notes to the Standalone Financial Statements including a summary of significantaccounting policies and other explanatory information.

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 Act in the manner so required and give a true and fair view in conformity with theIndian Accounting Standards prescribed under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended ("Ind AS") andother accounting principles generally accepted in India of the state of affairs of theCompany as at 31st March 2022 and profit (including Statement of Other ComprehensiveIncome) Statement of changes in Equity and its Cash Flows for the year ended on thatdate.

BASIS FOR OPINION

We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing (SAs) specified under Section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements Section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the Standalone Financial Statements underthe provisions of the Companies Act 2013 and the Rules made thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theICAI's Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our audit opinion on the Standalone FinancialStatements.

EMPHASIS OF MATTER

We draw attention to note no. 58 of Standalone Financial Statements as regard to themanagement evaluation of COVID-19 impact on the future performance of the Company.

Our opinion is not modified in respect of the above 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 below to be the key audit matters to be communicated in ourreport.

Key Audit Matters How our audit addresses the Key Audit Matters
Impairment of financial Instruments (Expected Credit Loss) (refer Note No. 28 of the Standalone Financial Statements)
Ind AS 109 requires the Company to recognize impairment loss allowance towards its financial assets using the expected Credit Loss (ECL) approach. Such ECL allowance is required to be measured considering the guiding principles of Ind AS 109 including: • We read and assessed the Company's accounting policies for impairment of financial assets and their compliance with Ind AS 109.
• We tested the criteria for staging of loans/ corporate guarantee based on their past-due status to check compliance with the requirement of Ind AS 109.
• unbiased probability weighted outcome under the various scenarios; • Tested samples of performing loans (Stage 1) to assess whether any loss indicators were present requiring them to be classified under stage 2 or 3 and vice versa.
• time value of money; • Tested the ECL model including assumptions and underlying computation.
• impact arising from forward looking macro-economic factors and;
• availability of reasonable and supportable information without undue costs.
Applying these principles involves significant estimation in various aspects such as;
• grouping of borrowers based on homogeneity by using appropriate statistical techniques;
• staging of loans and estimation of behavior life;
• estimation of losses for loan products/ corporate guarantee with historical defaults.
• Determining macro-economic factors impacting credit quality of financial assets
Considering the significance of such allowance to the overall Financial Statements and the degree of estimation involved in computation of expected credit losses this area is considered as a key audit matter.

MANAGEMENT'S RESPONSIBILITY FOR THE STANDALONE 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 theIndian Accounting Standards (Ind AS) specified under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateimplementation and maintenance of accounting policies; making j'udgments and estimatesthat are reasonable and prudent; and design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Standalone Financial Statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements management 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 unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative 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 FINANCIAL STATEMENTS

Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis 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 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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has adequate internal financial controls system in place and the operatingeffectiveness 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 uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Financial Statements or if such disclosures are inadequate to modify our opinion.Our conclusions 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 asa going 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 a 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 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

As required by the Companies (Auditor's Report) Order 2020 ("the Order")issued by the Central Government of India in terms of SubSection (11) of Section 143 ofthe Companies Act 2013 we give in the Annexure ‘A' a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

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 audit of all the branch offices of the Company has been conducted by us henceSection 143(8) is not applicable;

d. The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of accounts.

e. In our opinion the aforesaid Standalone Financial Statements comply with the IndianAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

f. On the basis of the written representations received from the Directors as on 31stMarch 2022 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2022 from being appointed as a director in terms of Section164 (2) of the Act.

g. 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".

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 does not have any pending litigations (other than in the ordinary courseof business) which would impact its financial position.

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

iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

Place : New Delhi For Manish Goyal & Co.
Date : 6th May 2022 Chartered Accountants
Firm Reg. No. 006066C
Sd/-
(CA. MANISH GOYAL)
Partner
Membership No. 074778
UDIN : 22074778AINMFD5539

ANNEXURE ‘A' TO THE INDEPENDENT AUDITOR'S REPORT OF M/S PAISALO DIGITAL LIMITED

(Referred to in paragraph of our Report of even date for F. Y. 2021-22)

i. (a) (A) The Company has maintained proper records to show full particulars includingquantitative details and situation of fixed assets.

(B) The company has maintained proper records to show full particulars of intangibleassets.

(b) As explained to us the Property Plant and Equipments have been physicallyverified by the management at reasonable intervals. According to the information andexplanations given to us no material discrepancies were noticed on such verification.

(c) According to information and explanations given to us the title deeds of immovableproperties of the company are held in the name of the Company.

(d) According to the information and explanations given to us Company has not revaluedits Property Plant and Equipment or Intangible assets.

(e) According to the information and explanations given to us no proceedings have beeninitiated or are pending against the Company under the Benami Transactions (Prohibition)Act 1988 (45 of 1998).

ii. (a) The Company is a Non-Banking Financial Company (NBFC) and has not dealt withany goods and the Company does not hold any inventory of goods during the period underaudit. Accordingly the reporting requirement under clause (ii) (a) of para no 3 of theOrder is not applicable.

(b) In our opinion and according to the information and explanations given to usCompany is availing working capital limits of more than Rupees five crore on the basis ofsecurity of current assets during the financial year. The monthly returns or statementsfiled by the company with banks or financial institutions are in agreement with the booksof accounts of the Company.

iii. The Company has made investments in or granted loans secured or unsecured toindividuals companies firms limited liability partnership or other entities in ordinarycourse of business.

The Company has provided corporate guarantee to Bank / Financial Institution for theloans taken by its wholly owned subsidiary M/s Nupur Finvest Pvt. Ltd.

The Company is a Non-Banking Financial Company and principal business of the Company isproviding loans and advance to other concerns therefore Para (iii) (a) and (e) of theOrder are not applicable to the Company.

(a) The terms & conditions of grant of such loans are not prejudicial to theinterest of the company.

(b) The repayment/receipt of the principal and interest of loan granted is regular asper the schedule of repayment and there is no amount which is overdue more than ninetydays in respect of standard Assets.

(c) As explained to us as per RBI Prudential norms the Company has made the required/ specified provision for overdues of more than ninety days. However the Company hastaken reasonable steps for recovery of principal and interest for those cases.

(d) The Company has not given any loans or advances in the nature of loans which arerepayable on demand or without specification of any terms or period of repayment. No loanhave been granted to Promoters and/or related parties as defined under Section 2(76) ofthe Companies Act 2013.

iv. According to the information and explanations given to us the provisions ofSection 185 and 186 of the Companies Act 2013 in respect of loans investmentsguarantees and security have been complied with.

v. The Company is a Non-Banking Financial Non-Deposit Taking or Holding SystemicallyImportant (ND-SI) Company and in our opinion the Company has not accepted any publicdeposits within the meaning of Section 73 to 76 of the Companies Act 2013 and theCompanies (Acceptance of Deposits) Rules 2014 and Non-Banking Financial CompaniesAcceptance of Public Deposits (Reserve Bank) Directions 2016. Accordingly the provisionsof para 3(v) of the Order are not applicable to the Company.

vi. Maintenance of cost records as required under Sub-Section (1) of Section 148 of theCompanies Act 2013 are not applicable to the company.

vii. (a) According to the information and explanations given to us the Company hasbeen regular in depositing with appropriate authorities undisputed statutory dues andthere are no undisputed amounts of Income Tax Goods & Service Tax Cess EmployeesState Insurance Customs Duty Provident Fund and Professional Tax etc. outstanding as atthe last day of financial year concerned for a period of more than six months from thedate they became payable.

(b) There are no dues of Goods & Service Tax and Custom Duty on account of anydispute except following matters under Income Tax:

Sr. No. Forum Period Remark
1 Assessment Proceeding u/s 147 F.Y. 2012-13 Order Pending
2 Assessment Proceeding u/s 147 F.Y. 2014-15 Order Pending
3 Assessment Proceeding u/s 147 F.Y. 2015-16 Order Pending
4 Income Tax Department u/s 154 F.Y. 2016-17 Rs. 6909140/- amount involved
5 Appeal to Commissioner of Income Tax (Appeal) F.Y. 2017-18 Rs. 2329246/- amount involved
6 Assessment Proceeding u/s 143(3) F.Y. 2019-20 Order Pending

viii. There are no transactions which are not recorded in the books of account whichhave been surrendered or disclosed as income during the year in the tax assessments underthe Income Tax Act 1961.

ix. (a) The Company has not defaulted in the repayment of loans or other borrowings orin the payment of interest thereon to any lender.

(b) The Company has not been declared willful defaulter by any bank or financialinstitution or other lender

(c) The term loans were applied for the purpose for which the loans were sanctioned

(d) Funds raised on short term basis have not been utilized for long term purposes

(e) The Company has not taken any funds from any entity or person on account of or tomeet the obligations of its subsidiaries associates or joint ventures.

(f) The Company has not raised loans during the year on the pledge of securities heldin its subsidiaries joint ventures or associate companies.

x. (a) According to the information and explanations given to us the Company had notraised money by way of initial public offer or further public offer during the year.

(b) According to the information and explanations given to us during the year theCompany has allotted equity shares upon conversion of convertible warrants on preferentialbasis to promotor group entities pursuant to the provision of the Companies Act 2013read with regulation made thereunder and the SEBI (ICDR) Regulations 2018.

xi. (a) Based on the records examined by us and according to the informationexplanations given to us no fraud has been committed

by the Company or any fraud committed on the Company by its officers or employees hasbeen noticed or reported during the year.

(b) No report under Sub-Section (12) of Section 143 of the Companies Act has been filedby the Auditors in Form ADT-4 as prescribed under Rule 13 of Companies (Audit andAuditors) Rules 2014 with the Central Government.

(c) the Auditor has not received any whistle-blower complaints during the year.

xii. The Company is not the Nidhi Company therefore provisions of Para 3 (xii) of theOrder is not applicable to the Company.

xiii. Based on the records examined by us and according to the information &explanation given to us the provisions of Section 177 and 188 of the Companies Act 2013regarding transaction with related parties have been complied with and details of thetransaction as per applicable accounting standard have been disclosed in the notes toaccounts of the Standalone Financial Statements.

xiv. (a) According to the information & explanation given to us The Company has anInternal Audit System commensurate with the size and nature of its business.

(b) We have considered the internal audit report for the period under audit and thereare no major issues raised by the internal auditor.

xv. Based on the records examined by us and according to the information &explanation given to us no non-cash transactions with Directors or persons connected withhim have been taken place during the year hence the provisions of Section 192 of theCompanies Act 2013 are not applicable to the Company.

xvi. (a) According to the information & explanation given to us the Company isregistered under Section 45-IA of the Reserve Bank of India Act 1934 as Non-DepositAccepting or Holding Non-Banking Financial Company.

(b) According to the information & explanation given to us the Company isNon-Banking Financial Company and having a valid Certificate of Registration (CoR) fromReserve Bank of India as per Reserve Bank of India Act 1934.

(c) According to the information & explanation given to us the Company is not aCore Investment Company (CIC) therefore CIC regulation of RBI are not applicable on theCompany.

(d) According to the information & explanation given to us there are no CIC in thegroup.

xvii. According to the information & explanation given to us the Company has notincurred any cash losses in the financial year and in the immediately preceding financialyear.

xviii. During the year the predecessor Statutory Auditor has resigned from theCompany However there are no adverse issues objections or concerns raised by thepredecessor Auditor.

xix. On the basis of the financial ratios ageing and expected dates of realization offinancial assets and payment of financial liabilities other information accompanying thefinancial statements the Auditor's knowledge of the Board of Directors and managementplans the Auditor is of the opinion that there is no material uncertainty exists as onthe date of the audit report and that Company is capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date.

xx. According to the information and explanations given to us there are no projectsother than ongoing project hence provision of Sub Section (5) of Section 135 of theCompanies Act 2013 are not applicable to the Company.

Place : New Delhi For Manish Goyal & Co.
Date : 6th May 2022 Chartered Accountants
Firm Reg. No. 006066C
Sd/-
(CA. MANISH GOYAL)
Partner
Membership No. 074778
UDIN : 22074778AINMFD5539

ANNEXURE ‘B' TO THE INDEPENDENT AUDITOR'S REPORT OF M/S PAISALO DIGITAL LIMITED

(Referred to in paragraph of our Report of even date for F. Y. 2021-22)

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OF SUB - SECTION 3 OFSECTION 143 OF THE COMPANIES ACT 2013

We have audited the internal financial controls over financial reporting of M/S PAISALODIGITAL LIMITED as of 31st March 2022 in conjunction with our audit of the StandaloneFinancial Statements of the Company for the year ended on that date.

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 Company's policies the safeguarding ofits 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.

AUDITOR'S 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 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 judgment including the assessment of the risks ofmaterial misstatement of the Standalone Financial Statements whether due to fraud orerror.

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 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 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 31st March 2022 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.

Place : New Delhi For Manish Goyal & Co.
Date : 6th May 2022 Chartered Accountants
Firm Reg. No. 006066C
Sd/-
(CA. MANISH GOYAL)
Partner
Membership No. 074778
UDIN : 22074778AINMFD5539

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