You are here » Home » Companies » Company Overview » 3i Infotech Ltd

3i Infotech Ltd.

BSE: 532628 Sector: IT
NSE: 3IINFOTECH ISIN Code: INE748C01020
BSE LIVE 15:16 | 20 Nov 3.86 0.03
(0.78%)
OPEN

3.96

HIGH

3.96

LOW

3.83

NSE 15:01 | 20 Nov 3.85 0
(0.00%)
OPEN

3.85

HIGH

3.90

LOW

3.80

OPEN 3.96
PREVIOUS CLOSE 3.83
VOLUME 197944
52-Week high 6.79
52-Week low 3.60
P/E
Mkt Cap.(Rs cr) 515
Buy Price 3.86
Buy Qty 718.00
Sell Price 3.87
Sell Qty 5389.00
OPEN 3.96
CLOSE 3.83
VOLUME 197944
52-Week high 6.79
52-Week low 3.60
P/E
Mkt Cap.(Rs cr) 515
Buy Price 3.86
Buy Qty 718.00
Sell Price 3.87
Sell Qty 5389.00

3i Infotech Ltd. (3IINFOTECH) - Auditors Report

Company auditors report

To

The Members of 3i Infotech Limited

Report on Indian Accounting Standards ("Ind AS") Financial Statements

We have audited the accompanying standalone Ind AS financial statements of 3iInfotech Limited ("the Company") which comprise the Balance Sheet as atMarch 31 2017 the Statement of Profit and Loss (including other comprehensive income)Statement of Cash Flows and the Statement of Changes in Equity for the year then ended anda summary of information (hereinafter referred to as ‘Standalone Ind AS Financialsignificant Statements').

Management's Responsibility 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 Ind AS Financial Statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand statement in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) specifiedunder Section 133 of the Act read with relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the Standalone IndAS Financial Statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these Standalone Ind AS FinancialStatements based on our audit. We have taken into account the provisions of the Act theaccounting and auditing standards and matters which are required to be included in theaudit report under the provisions of the Act and the Rules made there under.

We conducted our audit in accordance with the Standards on Auditing specified underSection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe Standalone Ind AS Financial Statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Standalone Ind AS Financial Statements. The procedures selecteddepend on the auditors' judgment including the assessment of the risks of materialmisstatement of the Standalone Ind AS Financial Statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the Standalone Ind AS Financial Statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances.

An audit also includes evaluating the appropriateness of the accounting policies usedand the reasonableness of the accounting estimates made by the Company's Directors aswell as evaluating the overall presentation of the Standalone Ind AS Financial Statements.

We believe that the audit evidence we have obtained is sufficientand appropriate toprovide a basis for our audit opinion on the Standalone Ind AS Financial Statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS Financial Statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India including the Ind AS of thefinancial position of the Company as at March 31 2017and its financial performanceincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.

Emphasis of Matter

Remuneration paid/provided of Rs. 1.23 crores for the financial year 2016-17 in respectof the Managing Director and Global CEO of the Company which is in excess of the limitsprescribed under section 198 of the Act and subject to the approval of the CentralGovernment. As explained by Management the Company is in theprocessoffillinganapplication with Central Government for obtaining approval thereof (Refer Note 34 (vi) tothe Standalone Ind AS Financial Statements). Our opinion is not qualified for above matter

Other Matter

The comparative financial information of the Company for the year ended March 31 2016and the transition date opening balance sheet as at April 01 2015 included in thesestandalone Ind AS financial statements are based on the previously issued statutoryfinancial statements prepared in accordance with the Companies (Accounting Standards)Rules 2006 audited by the one of the joint auditors whose report for the year ended March31 2017 dated August 11 2016 expressed unmodified opinion on those financial statementsas adjusted for the differences in the accounting principles adopted by the company ontransition to the Ind AS which have been audited by us.

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 Act we give in the "Annexure A" statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

1. 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 purpose of our audit; (b) In ouropinion proper books of account as required by law have been kept by the Company so faras appears from our examination of those books; (c) The Balance Sheet Statement of Profitand Loss (including other comprehensive income) the Cash Flow Statement and statement ofchanges in Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid Standalone Ind AS Financial Statements comply withthe Indian Accounting Standards prescribed under Section 133 of the Act read with therelevant rules issued thereunder;

(e) On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director in terms of Section 164 (2) ofthe Act.

(f) With respect to adequacy of internal financial controls over financial reporting ofthe Company and the operating effectiveness of such controls refer to our separate reportin "Annexure B"; and (g) In our opinion and to the best of our information andaccording to the explanations given to us we report as under with respect to othermatters to be included in the Auditor's Report in accordance with Rule 11 of the Companies(Audit and Auditors) Rules2014:

i. The Company has disclosed the impact of pending litigations on its financialposition in its Standalone Ind AS Financial Statements. Refer Note No. 33B to theStandalone Ind AS Financial Statements

ii. The Company has made provision as required under the applicable law or accountingstandard for material foreseeable losses if any on long term contracts

iii. There has been no delay in transferring amounts which were required to betransferred to the Investor Education and Protection Fund by the Company.

iv. The Company has provided requisite disclosures in its Standalone IndAS FinancialStatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom November 08 2016 to December 30 2016 and these are in accordance with the books ofaccount maintained by the Company. Refer Note 43 to the Standalone Ind AS

Financial Statements.

For GMJ & Company For LODHA & Company
Chartered Accountants Chartered Accountants
Firm Registration No:103429W Firm Registration No: 301051E
S. Maheshwari R.P. Baradiya
Partner Partner
Membership No. 38755 Membership No. 44101
Place: Navi Mumbai Place: Navi Mumbai
Date: April 30 2017 Date: April 30 2017

ANNEXURE REFERRED TO IN PARAGRAPH "REPORT ON OTHER LEGAL AND REGUALTORYREQUIREMENTS" OF OUR REPORT TO THE MEMBERS OF "THE COMPANY"FOR THE YEARENDED MARCH 31 2017

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we state that:

(i) a) The Company has maintained proper records showing full particulars includingquantitative details and situation offixed assets .

b) During the year the Company in accordance to a phased programme has physicallyverified Furniture & Fixtures equipment Plant and Machinery and Computers at sixlocations which in our opinion is reasonable Office considering the size of the Companyand nature of its fixed assets. According to information and explanations given to us nomaterial discrepancies were noticed on such verification.

c) Based on the information and explanations given to us the title deeds of immovableproperties are held in the name of the Company except in respect of immovable propertiesof Land & Building that have been taken on lease and disclosed as fixed assets in Note4 to the standalone Ind AS financial statements title deeds of the same are in erstwhilename of the Company.

(ii) As the Company is a service company primarily rendering software services.Accordingly it does not hold any physical inventories during the year. Thus paragraph3(ii) of the Order is not applicable to the Company (iii) The Company has granted loans inthe previous years (taking over of lenders liability of wholly owned subsidiaries in termsof DRS scheme) to 3 body corporates covered in the register maintained under section 189of the companies Act 2013.

a) During the year the company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013. Accordingly paragraph 3(iii)(a)of the Order is not applicable.

b) In respect of the existing loans outstanding the schedule of repayment of principaland interest has been stipulated and the parties are repaying the principal amounts asstipulated and also regular in payment of interest.

c) In respect of existing loans outstanding there is no amount which was overdueduring the year.

(iv) In our opinion and according to the information and explanations given to us theCompany has not advanced any loan provided guarantee and security covered in Section 185of the Act. The Company has complied with the provisions of section 186 of the Act to theextent applicable with respect to the loans and investments made guarantees given andsecurity provided.

(v) The Company has not accepted deposits from public within the meaning of directivesissued by RBI (Reserve Bank of India) and Sections 73 to 76 or any other relevantprovisions of the Act and rules framed there under.

(vi) The Central Government has not prescribed the maintenance of cost records underSection 148 (1) of the Companies Act 2013 for any of the services rendered by theCompany. Accordingly paragraph 3(vi) of the Order is not applicable.

(vii) a) According to the information and explanations given to us and on the basis ofexamination of records the Company is generally regular in depositing amounts deducted/accrued in respect of undisputed statutory dues including provident fund income taxsales tax value added tax duty of customs service tax cess and other materialstatutory dues. As explained to us the Company did not have any dues on account ofemployees' state insurance and duties of excise.

According to the information and explanations given to us and on the basis ofexamination of records of the Company no undisputed amounts payable in respect ofprovident fund income tax sales tax value added tax duty of customs service tax cessand other material statutory dues were in arrears as at March 31 2017 for a period morethan six months from the date they became payable.

b) According to the information and explanations given to us there are no dues ofIncome Tax Sales Tax Service Tax Duty of Customs Duty of Excise and Value added Taxwhich have not been deposited on account of any dispute except the following :

Name of Statute Nature of Demand Period to which amount Relates Rs. in crores Forum where dispute is pending
MVAT Act 2002 Sales Tax Financial Year 2005-06 2006-07 2.06 Sales Tax Officer
Karnataka Sales Tax Act 1957 Sales Tax Financial Year 2009-10 2.72 Appellate Deputy Commissioner
AP VAT Act 2005 Sales Tax Financial Year 2009-10 and 2010-11 0.68 Appellate Deputy Commissioner
Assessment Year 2004-05 1.00 Commissioner of Income Tax (Appeals)
Income Tax Act 1961 Income Tax
Assessment Year 2007-08 2.83 Income Tax Appellate
Assessment Year 2006-07 0.18 Tribunal
Financial year 2004-05 to 2009-10 2011-12 2012-13 151.83 Commissioner of Service Tax
Finance Act 1994 Service Tax Financial year 2010-11 19.47 Assistant Commissioner of Service Tax

(viii) As per clause 3.4 of the Supplement Restructuring Agreement in terms of DRS tothe Master Restructuring Agreement dated 30th March 2012 with the lenders and as per therevised terms of the Foreign Currency Convertible Bonds (FCCB) there is no default inrepayment of dues to the banks financial institutions and debenture holders.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year or in the recent past. Based onthe information and explanations given to us by the Management term loans were appliedfor the purpose for which the loans were obtained.

(x) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of fraudby officers or employees noticed or reported ontheCompanybyitsduring the year nor have we been informed of such case by the Management.

(xi) According to the information and explanations given to us and based on ourexamination of the records during the year the Company has paid managerial remunerationamounting to Rs. 1.23 crores to Managing Director and Global CEO which is subject toapproval of the Central Government as per the provisions of Section 197 read with ScheduleV of the Act. As explained to us requisite approval of the Central Government is beingsought by the Company.

(xii) According to the information and explanations given to us the Company is not aNidhi Company. Therefore the provisions of clause 3(xii) of the Order are not applicableto the Company.

(xiii) According to information and explanations given us and based on our examinationof the records of the Company all transactions with the related parties are in compliancewith sections 177 and 188 of the Act and details of such transactions have been disclosedin the standalone Ind AS Financial Statements as required by Ind AS 24 Related PartyDisclosures specified under section 133 of the Act read with the relevant rules issuedthereunder. Refer Note 34 to the standalone Ind AS Financial Statements.

(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year. Therefore theprovisions of clause 3(xiv) of the Order are not applicable to the Company.

(xv) According to information and explanations given to us and based on our examinationof records of the Company the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly paragraph 3 (xv) of the Order is notapplicable;

(xvi) The company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934. Accordingly paragraph 3 (xvi) of the Order is not applicable.

For GMJ & Company For LODHA & Company
Chartered Accountants Chartered Accountants
Firm Registration No:103429W Firm Registration No: 301051E
S. Maheshwari R.P. Baradiya
Partner Partner
Membership No. 38755 Membership No. 44101
Place: Navi Mumbai Place: Navi Mumbai
Date: April 30 2017 Date: April 30 2017

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

We have audited the internal financial controls over financial reporting of 3i InfotechLimited ("the Company") as ofMarch 31 2017 in conjunction with our audit of theStandalone Ind AS Financial 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 Company considering the essential components ofinternal control controlover financial stated in the Guidance Note on Audit of InternalFinancial Controls over Financial Reporting issued by the Institute of CharteredAccountants of India (ICAI). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.

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 deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 auditors' judgment including the assessment of the risks ofmaterial misstatement of the Standalone IndAS Financial Statements whether due to fraudor 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 Standalone Ind AS Financial Statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2)provide reasonableassurance that transactions are recorded as necessary to permit preparation of StandaloneInd AS Financial Statements in accordance with generally accepted accounting principlesand that receipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the StandaloneInd AS 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 reportingwereoperatingeffectively asMarch 31 2017 based on the internalcontrol over financial reporting criteria established by the Company considering internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India.

For GMJ & Company For LODHA & Company
Chartered Accountants Chartered Accountants
Firm Registration No:103429W Firm Registration No: 301051E
S. Maheshwari R.P. Baradiya
Partner Partner
Membership No. 38755 Membership No. 44101
Place: Navi Mumbai Place: Navi Mumbai
Date: April 30 2017 Date: April 30 2017