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Encore Software Ltd.

BSE: 531750 Sector: IT
NSE: N.A. ISIN Code: INE103B01012
BSE 00:00 | 04 Mar Encore Software Ltd
NSE 05:30 | 01 Jan Encore Software Ltd
OPEN 6.85
PREVIOUS CLOSE 6.85
VOLUME 20
52-Week high 6.85
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 6.85
Sell Qty 180.00
OPEN 6.85
CLOSE 6.85
VOLUME 20
52-Week high 6.85
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 4
Buy Price 0.00
Buy Qty 0.00
Sell Price 6.85
Sell Qty 180.00

Encore Software Ltd. (ENCORESOFTWARE) - Auditors Report

Company auditors report

TO THE MEMBERS OF ENCORE SOFTWARE LIMITED

REPORT ON THE FINANCIAL STATEMENTS

We have audited the accompanying financial statements of Encore Software Limited("the Company") which comprise the Balance Sheet as at 31st March2017 the Statement of Profit and Loss and Cash Flow Statement for the year then ended anda summary of the significant accounting policies and other explanatory information.

MANAGEMENT'S RESPONSIBILITY FOR THE 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 financial statements that shall give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withprovisions of the Act for safeguarding of the assets of the Company and preventing anddetecting frauds and other irregularities; the selection and application of appropriateaccounting policies; making judgements and estimates that are reasonable and prudent; andthe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

AUDITORS' RESPONSIBILITY

Our responsibility is to express an opinion on these financial statements based on ouraudit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions 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 ethicalrequirement and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances. An audit also includes evaluating theappropriateness of the accounting policies used and the reasonableness of the accountingestimates made by the Company's Director's as well as evaluating the overall presentationof the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.

BASIS OF QUALIFIED OPINION a) The entire net worth of the Company has been eroded.However the Company is continuing to prepare accounts under going concern concept.

QUALIFIED OPINION

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the basis for qualifiedopinion paragraph the aforesaid financial statements give the information required by theAct in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2017 and its loss and its cash flows for the year ended onthat date.

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditor's Report) Order 2016 (CARO 2016 or "theOrder) issued by the Central Government of India in terms of subsection (11) of section143 of the Act and on the basis of such checks of the books and records of the

Company as we considered appropriate and according to the information and explanationsgiven to us we give in the Annexure a statement on the matters specified in paragraphs 3and 4 of the Order.

2. As required by section 143 (3) of the Act we report that: a. We have sought andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; b. In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books; c. The Balance Sheet the Statement of Profit and Loss andthe Cash Flow Statement dealt with by this Report are in agreement with books of account;d. In our opinion the aforesaid financial statements comply with the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014; e. We have not received representations from directors and hence we are notable to comment as to whether the directors are disqualified as on 31st March2017 from being appointed as a director in terms of Section 164 (2) of the Act; f. Withrespect to the adequacy of the internal financial controls over financial reporting of theCompany and operating effectiveness of such controls refer to our separate report inAnnexure B and g. With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous: i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 23 A of Notes to the financialstatements; ii. The Company has made provisions as required under the applicable law oraccounting standards for material foreseeable losses if any on long-term contactsincluding pending derivative contracts; iii. The Company has not transferred Rs. 101173/-share application money and Rs. 18642450/- share warrant application money receivedduring the prior years which is required to be transferred to the Investor Education andProtection Fund by the Company. iv. The Company has provided requisite disclosures in thefinancial statements as to holdings as well as dealings in Specified Bank Notes during theperiod from 8th November 2016 to 30th December 2016. Based onaudit procedures and relying on the management representation we report that thedisclosures are in accordance with books of account maintained by the Company and asproduced to us by the Management.

For Ishwar & Gopal
Chartered Accountants
Registration No. 001154S
K V Gopalakrishnayya
Place: Bangalore Partner
Date: 30th May 2017 Membership No. 21748

ANNEXURE - A TO THE AUDITORS' REPORT

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the financial statements for the year ended 31st March 2017 we reportthat: i. a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets; b. The fixed assets of the Companyhave been verified by the management during the year. No material discrepancies werenoticed on such verification and the same have been properly dealt with in the books ofaccount. In our opinion the periodicity of physical verification is reasonable havingregard to the size of the Company and nature of its business for the year under review; c.According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company does not have any immovableproperties. ii. The Company is a service company primarily rendering software services.Accordingly it does not hold any physical inventories. Thus paragraph 3(ii) of the Orderis not applicable. iii. According to the information and explanations given to us and onthe basis of our examination of the records of the Company the Company has not grantedany loans secured or unsecured to Companies firms limited liability partnerships orother parties covered in the register maintained under section 189 of the Companies Act2013. Hence clause 3 (iii) (a) and (b) of the order is not applicable to the Company forthe year under review. iv. According to the information and explanations given to us andon the basis of our examination of the records of the Company the Company has not grantedany loans investments guarantees and securities to parties covered under section 185and 186 of the Companies Act 2013. v. Rs. 101173/- share application money and Rs.18642450/- share warrant application money received during the prior years amounts toacceptance of deposits under the Companies Act 2013. The Company has not adhered to thedirectives of Reserve Bank of India and the provisions of section 73 to 76 of theCompanies Act 2013 and rules framed under in this regard. No order has been passed by theCompany Law Board or National Company Law Tribunal or Reserve Bank of India or any Courtor Tribunal. vi. We have been informed that maintenance of books of accounts pursuant tothe rules made by the Central Government under sub-section (1) of Section 148 of theCompanies Act 2013 for maintenance of Cost records in respect of products of the Companyare not applicable to the Company for the year under review and hence the requirement ofclause 3 (vi) of Companies (Auditor's Report) Order 2015 is not applicable to the Companyduring the year under review. vii. a. The Company has not been regular in depositing withthe appropriate authorities undisputed statutory dues including Provident Fund Employees'State Insurance Income Tax Sales Tax Service Tax duty of customs duty of excisevalue added tax cess and other material statutory dues applicable. The followingundisputed amounts payable in respect of Provident Fund Employees' State InsuranceIncome Tax Sales Tax Service Tax duty of customs duty of excise value added tax cessand other material statutory dues applicable in arrears as at 31st March 2017for a period of more than six months from the date they became payable. The data isfurnished to the extent details are available.

Name of the Statute Nature of Dues Amount (Rs.) Period to which amount relates Due date Date of payment
Finance Act 1994 Service Tax 5109656 2009-10 and 2010-11 Various dates Not paid as on the date of this report
Employees State Insurance Act Employees State Insurance 921 2014-15 Various dates Not paid as on the date of this report
Employees Provident Fund and Miscellaneous Provisions Act Provident Fund 16442 2014-15 Various dates Not paid as on the date of this report
Income Tax Act 1961 Tax Deducted at Source 92279 2012-13 2014- 15 2015-16 and 2016-17 Various dates Not paid as on the date of this report
Central Sales Tax Act Central Sales Tax 482 2012-13 Various dates Not paid as on the date of this report

b. According to the information and explanation given to us there are no disputedamounts of income tax or sales tax or service tax or duty of customs or duty of excise orvalue added tax or cess which have not been deposited with the relevant authorities onaccount of any dispute. viii. In our opinion and according to the information andexplanations given to us the Company did not have any amount outstanding to banksfinancial institutions government or debenture holders. ix. In our opinion and accordingto the information and explanations given to us during the year the Company did not raiseany money by way of initial public offer or further public offer (including debtinstruments) or term loans. Accordingly clause 3 (ix) of Companies (Auditor's Report)Order 2016 is not applicable to the Company during the year under review. x. According tothe information and explanations given to us no material frauds by the Company or on theCompany by its officers and employees have been noticed or reported during the course ofthe audit. xi. According to the information and explanations given to us and based on ourexamination of records of the Company the Company has not paid / provided for managerialremuneration during the year under review. Accordingly clause 3 (xi) of Companies(Auditor's Report) Order 2016 is not applicable to the Company during the year underreview. xii. In our opinion and according to the information and explanation given to usthe Company is not a nidhi Company. Accordingly clause 3 (xii) of Companies (Auditor'sReport) Order 2016 is not applicable to the Company during the year under review. xiii.According to the information and explanation given to us and based on our examination ofthe records of the Company transactions with related parties are in compliance withsections 177 and 188 of the Act where applicable and details of such transactions havebeen disclosed in the financial statements as required by the applicable accountingstandards. xiv. According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly paid debentures during theyear. xv. According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not entered into any non cashtransactions with directors or persons connected with him. Accordingly clause 3 (xv) ofCompanies (Auditor's Report) Order 2016 is not applicable to the Company during the yearunder review. xvi. According to the information and explanation given to us and based onour examination of the records of the Company the Company is not required to beregistered under section 45-IA of the Reserve Bank of India Act 1934.

For Ishwar & Gopal
Chartered Accountants
Registration No. 001154S
K V Gopalakrishnayya
Place: Bangalore Partner
Date: 30th May 2017 Membership No. 21748

ANNEXURE - B TO THE AUDITORS' REPORT

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (i) OF SUB-SECTION 3 OF SECTION143 OF THE COMPANIES ACT 2013 ("THE ACT")

We have audited the internal financial controls over financial reporting of EncoreSoftware Limited ("the Company") as of 31st March 2017 inconjunction with our audit of the standalone financial statements of the Company for theyear 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.

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 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 and 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 financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.

MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING

A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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 does not have adequate and effective internal financialcontrol over financial reporting as at 31st March 2017.

For Ishwar & Gopal
Chartered Accountants
Registration No. 001154S
K V Gopalakrishnayya
Place: Bangalore Partner
Date: 30th May 2017 Membership No. 21748