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Cybertech Systems & Software Ltd.

BSE: 532173 Sector: IT
NSE: CYBERTECH ISIN Code: INE214A01019
BSE 00:00 | 20 Feb 44.80 -0.80
(-1.75%)
OPEN

44.95

HIGH

45.05

LOW

44.80

NSE 00:00 | 20 Feb 44.60 -0.85
(-1.87%)
OPEN

45.10

HIGH

45.75

LOW

44.40

OPEN 44.95
PREVIOUS CLOSE 45.60
VOLUME 416
52-Week high 64.45
52-Week low 32.80
P/E 11.73
Mkt Cap.(Rs cr) 123
Buy Price 44.00
Buy Qty 1.00
Sell Price 47.00
Sell Qty 1.00
OPEN 44.95
CLOSE 45.60
VOLUME 416
52-Week high 64.45
52-Week low 32.80
P/E 11.73
Mkt Cap.(Rs cr) 123
Buy Price 44.00
Buy Qty 1.00
Sell Price 47.00
Sell Qty 1.00

Cybertech Systems & Software Ltd. (CYBERTECH) - Auditors Report

Company auditors report

TO THE MEMBERS OF CYBERTECH SYSTEMS AND SOFTWARE LIMITED

Opinion

We have audited the accompanying standalone financial statements of CYBERTECH SYSTEMSAND SOFTWARE LIMITED ("the Company") which comprise the Balance Sheet as at31st March 2019 the Statement of Profit and Loss (including Other Comprehensive Income)the Statement of Changes in Equity and the Statement of Cash Flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred as"Standalone financial Statements").

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 Companies Act 2013 (the Act) in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at 31st March 2019 and its profit (including othercomprehensive 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 Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters. We have determined the matters described below to bethe key audit matters to be communicated in our report.

Sr. No. Key Audit Matters Auditor's response
1 Fair value assessment of trade receivables and unbilled revenue Audit procedure performed :-
Trade receivables and unbilled revenue comprise a significant portion of the Company's liquid assets. As indicated in Note 11 and Note 15 of the standalone financial statements 16.92 % and 41.16 % of the trade receivables and unbilled revenue respectively are past due but not impaired. - We have evaluated and tested the Company's processes for trade receivables and unbilled revenue including the provisioning and collection processes.
The most significant portion of trade receivables and unbilled revenue over 90 days comprises large customers being city municipal corporations. - We tested enquired and assessed the unbilled revenue as per the terms of the contract and its billing in likely future.
Accordingly the estimation of the allowance for trade receivables is a significant judgement area and is therefore considered a key audit matter. - We assessed the validity of material long outstanding receivables by requesting third-party confirmations of amounts owed. We also considered payments received subsequent to year-end past payment history and unusual patterns to identify potentially impaired balances.
- Where there were indicators that trade receivables were unlikely to be collected within contracted payment terms we assessed the adequacy of the allowances for impairment of trade receivables and unbilled revenue.
- We were satisfied that the Company's trade receivables and unbilled revenue are fairly valued and adequately provided against where doubt exists. We further considered whether the provisions were misstated and concluded that they were appropriate in all material respects and disclosures related to trade receivable and unbilled revenue in the standalone financial statements are appropriate.
2 Capitalisation of software (Intangible assets under development) :- Audit procedure performed :-
Given the Company's continued development of its Software internally generally intangible assets and the size of the capitalised cost balance of Rs. 656.27 lakh as at 31st March 2019 of which Rs. 396.44 lakh has been capitalised during the year we continue to focus on this area. Software can have complex development cycles often over many phases spanning three to four years or more. New technology also brings a risk of impairment. - We tested internal financial controls including IT controls over the approval development of new software and management's assessment of impairment.
- We assessed the costs capitalised which meets the requirements of IAS 38 ‘Intangible Assets'.

Information Other than the Standalone Financial Statements and Auditor's report thereon

The Company's Board of Directors is responsible for the preparation of otherinformation. The Other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to the Board report CorporateGovernance report and Shareholder's information but does not include the standalonefinancial statement 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 ouraudit of the standalone financial statements our responsibility is to read the otherinformation and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation; we required to report that fact. We have nothing to report in this regard.

Management responsibilities for the 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 (includingother comprehensive income) changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the accountingStandards specified under Section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate 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 standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements Board of Directors is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so. The Board of Directors is also responsible foroverseeing the Company's financial reporting 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 may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• 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 Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by the 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 entity'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 ourauditor's 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 financialstatements that individually or in aggregate makes it probable that the economic decisionsof a reasonably knowledgeable user of the standalone financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work and (ii) to evaluatethe effect of any identified misstatements in the standalone 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 defficiencies in internal control that we identify during our audit. We alsoprovide those charged with governance with a statement that we have complied with relevantethical requirements regarding independence and to communicate with them allrelationships 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 and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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 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" a statement on the matters specified inparagraphs 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 and records.

(c) The Balance sheet the Statement of Profit & Loss (including othercomprehensive income) Statement of Changes in Equity and the Statement of Cash Flowsdealt with by this Report are in agreement with the 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 (Account) Rules 2014.

(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on records by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a Director in terms of Section164(2) of the Act.

(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in Annexure "B".

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended: In our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of Section 197 of the Act.

(h) With respect to the other matters to be included in the Auditor's report inaccordance with the rule 11 of the Companies (Audit and Auditors) Rules 2014 in ouropinion and to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements. Refer Note No.- 32 to the standalonefinancial statements.

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.

For BAGARIA & CO. LLP
Chartered Accountants
Firm Registration No: 113447W/W-10019
Vinay Somani
Partner
Membership No. 143503
Place : Mumbai
Date : May 09 2019

"ANNEXURE A" ANNEXURE REFERRED TO IN PARAGRAPH "REPORT ON OTHER LEGALAND REGULATORY REQUIREMENTS" OF OUR REPORT TO THE MEMBERS OF THE COMPANY FOR THE YEARENDED 31st MARCH 2019

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

1. a) The Company has maintained proper records showing full particulars includingquantitative details and situation of property plant and equipment (fixed assets).

b) The Company has regular programme of physical verification of its property plantand equipment (fixed assets) by which all property plant and equipment (fixed assets) areverified in a phased manner over a period of three years. In our opinion thisperiodicity of the physical verification is reasonable having regard to the size of theCompany and nature of its fixed assets. Pursuant to the programme certain property plantand equipment (fixed assets) were physically verified by the management during the year.According to the information and explanations given to us no material discrepancies werenoticed on such verification.

c) Based on the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

2. The Company being a service Company primarily rendering information technologyservices it does not hold any physical inventories. Accordingly the provisions of clause3(ii) of the Order are not applicable to the Company.

3. The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act. Accordingly the provisions of clause 3(iii) of the Order are notapplicable to the Company.

4. The Company has not granted any loans or provided guarantees or security during theyear and therefore reporting of compliance of section 185 and 186 of the Act does notarise. The Company has complied with the provisions of Section 186 of the Act with respectto the investment made during the year.

5. No deposits within the meaning of directives issued by Reserve Bank of India andSections 73 to 76 or any other relevant provisions of the Act and rules framed thereunderhave been accepted by the Company.

6. According to the information and explanations given to us the Central Governmenthas not prescribed the maintenance of cost records under clause (d) of sub-section (1) ofSection 148 of the Act in respect of Company's services. Accordingly the provisions ofclause 3(vi) of the Orders are not applicable to the Company.

7. a) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company is generally regular in depositingundisputed statutory dues including provident fund employees' state insurance income-tax sales-tax goods and service tax service tax duty of customs duty of excise valueadded tax and other statutory dues applicable to the Company with appropriate authorities.No undisputed amounts in respect of the aforesaid statutory dues were outstanding as atthe last day of the financial year for a period of more than six months from the date theybecame payable.

b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no dues of income tax Goods andservice tax duty of customs duty of excise value added tax and Sales tax which have notbeen deposited on account of any dispute.

8. The Company has not defaulted in repayment of loans or borrowings to banks duringthe year. The Company has not taken any loans or borrowings from financial institutiongovernment or issued any debentures during the year.

9. The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) or term loan during the year. Therefore the provisionsof clause 3 (ix) of the Order are not applicable to the Company.

10. 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 fraud by or on the Company by its officers or employees noticed or reportedduring the year nor have we been informed of such case by the management.

11. According to the information and explanations given to us and based on examinationof records of the Company managerial remuneration has been paid or provided for duringthe year is in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V of the Act.

12. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Therefore the provisions of clause 3(xii) of the Orderare not applicable to the Company.

13. 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 all transactions with therelated party are in compliance with Section 177 and 188 of the Act and the details havebeen disclosed as required by the applicable Ind AS in Note 33 to the Standalone FinancialStatements.

14. During the year the Company has not made preferential allotment or privateplacement of shares or fully or partially convertible debentures. Therefore theprovisions of clause 3(xiv) of the Order are not applicable to the Company.

15. Based on the information and explanations given to us the Company has not enteredinto any non-cash transactions prescribed under Section 192 of the Act with directors orpersons connected with them during the year. Therefore the provisions of clause 3(xv) ofthe Order are not applicable to the Company.

16. In our opinion the Company is not required to be registered under Section 45-IA ofthe Reserve Bank of India Act 1934. Therefore the provisions of clause 3(xvi) of theOrder are not applicable to the Company.

For BAGARIA & CO. LLP
Chartered Accountants
Firm Registration No: 113447W/W-10019
Vinay Somani
Partner
Membership No. 143503
Place : Mumbai
Date : May 09 2019

"ANNEXURE B" Report on the Internal Financial Controls under Clause (i) ofsub-section 3 of Section 143 of the Act

We have audited the internal financial controls over financial reporting of CYBERTECHSYSTEMS AND SOFTWARE LIMITED ("the Company") as of 31st March 2019 inconjunction with our audit of the Financial Statements of the Company for the year endedon 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). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 issued by ICAI and deemed tobe prescribed under Section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the ICAI. Those Standards and the Guidance Note require that we complywith ethical requirements and plan and perform the audit to obtain reasonable assuranceabout whether adequate internal financial controls over financial reporting wasestablished and maintained and if such controls operated effectively in all materialrespects. Our audit involves performing procedures to obtain audit evidence about theadequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgement including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud 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 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 broadly 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 2019 based on"the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For BAGARIA & CO. LLP
Chartered Accountants
Firm Registration No: 113447W/W-10019
Vinay Somani
Partner
Membership No. 143503
Place : Mumbai
Date : May 09 2019