The Members of
Share India Securities Limited
REPORT ON THE AUDIT OF THE STANDALONE FINANCIAL STATEMENTS
We have audited the Standalone Financial Statements of SHARE INDIA SECURITIESLIMITED which comprise the Balance Sheet as at March 31 2019 and theStatement of Profit & Loss and Statement of Cash Flows for the year ended and notesto the Standalone Financial Statements including a summary of significant accountingpolicies 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 Companies 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 read with the Companies (Accounting Standards) Rules 2006 as amended("AS") and other accounting principles generally accepted in India of the stateof affairs of the company as at March 312019 the Profit and its Cash Flows for the yearended on that date.
BASIS For opinion
We conducted our audit of the Standalone Financial Statements in accordance with theStandards on Auditing specified under section 143 (10) of the Act (SAs). 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 independencerequirements that are relevant to our audit of the Standalone Financial Statements underthe provisions of the Act and the Rules made thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code OfEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our audit opinion on the Standalone Financial Statements.
KEY AUDIT Matters
Key audit matters are those matters that in our professional judgment were of mostsignification in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our opinion thereon and we do not providea separate opinion on these matters.
|Key Audit Matters ||How the matter was addressed in our audit |
|Revenue Recognition || |
|1. Company has multiple income generating operations but majority of which have their origin from the Share Trading activities at Stock Exchange and Brokerage. ||1. Major revenue generating activities were Brokerage and the company's own Pro trading activities. Hence our prime focus was over the Brokerage Income and Pro trading activities since the management is involved themselves in such operations. |
| ||Accordingly in our audit process we focused over the internal control set up by the management and had to check the policies set up by the management for charging the commission from the clients. |
| ||To test whether the commission rates used to calculate commission revenue were consistent with the underlying agreements & evaluating the effect on the financial statements of recognizing commission revenue on trade date rather than on a settlement date basis. |
| ||Once the brokerage percentage is set then until the management decides to alter the percentage after negotiating with the client brokerage will be charged uniformly through automated processes placed through the software. Therefore we checked the automated procedure in the software and similarly tested the system generated reports. |
| ||Share India Securities Ltd likewise other stock broker companies provide the facilities of margin to the client depending upon the value of securities the client provides to the company. |
| ||Therefore to test the risk that the company undertakes while providing margin facility to the clients we tested the value of securities of the clients and focused on The VAR amount prescribed by the Exchange. |
| ||To test how Share India generates& record revenue transaction throughout the transaction lifecycle & to ensure completeness of transactions. |
|Accounting related to major acquisition of a subsidiaries Ref. to Note 8 in the financial Statement || |
|2. During the year the company acquired a subsidiary Windpipe Finvest Pvt. Ltd. at a consideration of Rs. 51625540/- & the valuation of assets & liabilities is done at fair value & the valuation report has been obtained through external valuer. ||2. We performed procedures to assess the key assumptions used. |
|- To assess the fair value of the assets and liabilities |
|- To assess the competence capabilities & objectivity of managements external valuer |
| ||- To obtain the valuation reports & discussed with external valuer on the methodologies & key assumption used. |
| ||- To evaluate the methodologies used to determine the fair values of assets & liabilities recognized. |
| ||We found the key assumption as stated above to be supported by the evidence obtained. |
|Investment in Subsidiaries || |
|Ref. to Note 8 in the Financial Statement || |
|3. Investment in subsidiaries are carried at cost in the accompanying Standalone Financial Statement which as at March 31 2019 reflected a balance of Rs. 178125540/-. The recoverability of the investments in subsidiaries was assessed by the management based on certain assumption professional judgments expectation of future events which are believed to be reasonable under the circumstances & other factors. ||3. Based on the impairment test performed carrying amount of investment in subsidiaries do not exceed their recoverable amount on the basis that the current business plans of the subsidiaries will materialize without material adverse effects. |
|We have reviewed the main assumption & the professional judgments made by the management in performing the impairment tests & we have found them reasonable under the current circumstances. |
OTHER INFORMATION - OTHER THAN THE STANDALONE FINANCIAL STATEMENTS AND AUDITORS REPORTTHEREON
The Company's Board of Directors is responsible for other information. The otherInformation comprises the information included in the Management Discussion and AnalysisBoard's Report including Annexures to Board's Report Chairman's Statement andShareholder's Information but does not include the standalone financial statements andour auditor's report thereon. The Board's Report including Annexures to Board's ReportChairman's Statement and Shareholder's Information is expected to be made available to usafter the date of this auditor's report.
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 in the course of our audit or otherwise appears to be materially misstated.
Management's Responsibility for Standalone Financial Statements
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 Standalone Financial Statementsthat give a true and fair view of the financial position financial performance CashFlows of the Company in accordance with the AS and other accounting principles accepted inIndia. 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 accounting policies ;making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate InternalFinancial 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 RESPONSIBILITIES 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 Standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud any involvecollusion forgery Intentional omissions misrepresentations or the override of internalcontrol.
Obtain an understanding of internal financial controls relevant to the audit inorder to 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 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 uncertaintyexits 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 Standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditors report. However future events or conditions may cause the Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of the Standalonefinancial Statements including the disclosures and whether the Standalone financialstatements represent 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 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 reasonablebe expected to outweigh the public interest benefits of such communication.
REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS
1. As required by The Companies (Auditors Report) order 2016 the order issued byCentral government of India in terms of sub section (11) of section 143 of the Act wegive in the "Annexure-A" a statement the matters specified in paragraph3 and 4 of the said Order.
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.
b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books.
c) The Balance Sheet the Statement of Profit and Loss and the statement of Cash Flowdealt with by this Report are in agreement with the relevant books of account.
d) In our opinion the aforesaid Standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.
e) On the basis of written representations received from the directors as on March 312019 taken on record by the Board of Directors none of the directors is disqualified ason March 312019 from being appointed as a director in terms of Section 164(2) of theAct.
f) With respect to the adequacy of the internal financial controls over financialreporting of the company & the operating effectiveness of such controls refer to ourseparate report in Annexure-B'. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the company's internal financial controls withreference to financial statements.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of the 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 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 & Auditors) Rules 2014 as amended inour opinion and to our best of our information and according to the explanations given tous:
I. The Company has disclosed the impact of pending litigation on its financial positionin its standalone financial statements.
II. The company does not have any long-term contracts but has made requisite provisionfor derivative contracts under the applicable law or accounting Standards for anyforeseeable losses if any
III. There was no amount which was required to be transferred to the Investor Educationand Protection Fund.
| ||For M/s T.K. Gupta and Associates |
| ||Chartered Accountants |
| ||FRN:011604N |
| ||CA. T.K. Gupta |
|Place: Sahibababd ||Partner |
|Date: 30 May 2019 ||M. No. 082235 |