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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 STANDALONE Ind AS FINANCIAL STATEMENTS

We have audited the accompanying Standalone Ind AS financial statements of EncoreSoftware Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2019 the Statement of Profit and Loss (including other comprehensive income) theStatement of Cash Flows and Statement of Changes in Equity for the year then ended and asummary of the significant accounting policies and other explanatory information.

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 Ind AS financial statements that give a true and fair view of thefinancial position financial performance including other comprehensive income cash flowsand changes in equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) prescribedunder section 133 of the Act read with the relevant rules issued thereunder.

This responsibility also includes maintenance of adequate accounting records inaccordance with provisions of the Act for safeguarding of the assets of the Company andpreventing 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 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 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 auditor's 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 accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirector's as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

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

BASIS OF QUALIFIED OPINION

a) The entire net worth of the Company has been eroded. This situation indicatesthe existence of a material uncertainty that may cast significant doubt on the C ompany'sability to continue as a going concern. However the Company is continuing to prepareaccounts 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 forqualified opinion paragraph the aforesaid standalone Ind AS financial statementsgive the information required by the Act in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in Indiaincluding the Ind AS of the financial position of the Company as at 31stMarch 2019 and its financial performance including other comprehensive income its cashflows and the changes in equity for the year ended on that 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 section 143(11) of the Actwe give in the Annexure A a statement on the matters specified in paragraphs 3 and 4 ofthe 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 it appears from our examination of those books;

c. The Balance Sheet the Statement of Profit and Loss including other comprehensiveincome Statement of Cash Flows and the Statement of Changes in Equity dealt with by thisReport are in agreement with books of account;

d. In our opinion the aforesaid standalone Ind AS financial statements comply with theAccounting Standards specified under Section 133 of the Act read with relevant ruleissued thereunder;

e. We have not received representations from directors and hence we are not able tocomment as to whether the directors are disqualified as on 31st March 2019from being appointed as a director in terms of Section 164 (2) of the Act;

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

g. 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 has disclosed the impact of pending litigations on its financialposition in its standalone Ind AS financial statements - Refer Note 19 of Notes to thestandalone Ind AS financial statements;

ii. The Company has made provisions as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contacts includingpending derivative contracts;

iii. The Company has not transferred र 101173/- share application money andर 18642450/- share warrant application money received during the prior years whichis required to be transferred to the Investor Education and Protection Fund by theCompany.

For B Chandrashekhar & Co.
Chartered Accountants
Registration No. 004848S
B Chandrashekhar
Place: Bengaluru Proprietor
Date: 31st May 2019 Membership No. 029802

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 2019 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 Company have been verified by the management during theyear. No material discrepancies were noticed on such verification and the same have beenproperly dealt with in the books of account. In our opinion the periodicity of physicalverification is reasonable having regard to the size of the Company and nature of itsbusiness 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 on the basis of ourexamination of the records of the Company the Company has not granted any loans securedor unsecured to Companies firms limited liability partnerships or other parties coveredin the register maintained under section 189 of the Companies Act 2013. Hence clause 3(iii) (a) and (b) of the order is not applicable to the Company for the year under review.

iv. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not granted any loansinvestments guarantees and securities to parties covered under section 185 and 186 ofthe Companies Act 2013.

v. र 101173/- share application money and र 18642450/- share warrantapplication money received during the prior years amounts to acceptance of deposits underthe Companies Act 2013. The Company has not adhered to the directives of Reserve Bank ofIndia and the provisions of section 73 to 76 of the Companies Act 2013 and rules framedunder in this regard. No order has been passed by the Company Law Board or NationalCompany Law Tribunal or Reserve Bank of India or any Court or Tribunal.

vi. We have been informed that maintenance of books of accounts pursuant to the rulesmade by the Central Government under sub-section (1) of Section 148 of the Companies Act2013 for maintenance of Cost records in respect of products of the Company are notapplicable to the Company for the year under review and hence the requirement of clause 3(vi) of Companies (Auditor's Report) Order 2016 is not applicable to the Company duringthe year under review.

vii. a. The Company has not been regular in depositing with the appropriate authoritiesundisputed statutory dues including Provident Fund Employees' State Insurance IncomeTax Sales Tax Service Tax duty of customs duty of excise value added tax cess andother material statutory dues applicable.

The following undisputed amounts payable in respect of Provident Fund Employees' StateInsurance Income Tax Sales Tax Service Tax duty of customs duty of excise valueadded tax cess and other material statutory dues applicable in arrears as at 31stMarch 2019 for a period of more than six months from the date they became payable.

The data is furnished to the extent details are available.

Name of the Statute Nature of Dues Amount (र) 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 108479 2012-13 2014- 15 2015-16 2016-17 and 2017-18 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 and explanations given to us theCompany due Rs. 309142614 to council of scientific & Industrial Research (CSIR) agovernment organization

ix. In our opinion and according to the information and explanations given to usduring the year the Company did not raise any money by way of initial public offer orfurther public offer (including debt instruments) or term loans. Accordingly clause 3(ix) of Companies (Auditor's Report) Order 2016 is not applicable to the Company duringthe year under review.

x. According to the information and explanations given to us no material frauds by theCompany or on the Company by its officers and employees have been noticed or reportedduring the course of the 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 us theCompany 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 ourexamination of the records of the Company transactions with related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the standalone Ind AS financial statements as requiredby the applicable accounting standards.

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 on ourexamination of the records of the Company the Company is not required to be registeredunder section 45-IA of the Reserve Bank of India Act 1934.

For B Chandrashekhar & Co.
Chartered Accountants
Registration No. 004848S
B Chandrashekhar
Place: Bengaluru Proprietor
Date: 31st May 2019 Membership No. 029802

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 2019 inconjunction with our audit of the standalone Ind AS financial statements of the Companyfor 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.

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 standalone Ind AS 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 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 2019.

For B Chandrashekhar & Co.
Chartered Accountants
Registration No. 004848S
B Chandrashekhar
Place: Bengaluru Proprietor
Date: 31st May 2019 Membership No. 029802

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