To the Members of Hypersoft Technologies Limited Report on the Audit of the FinancialStatements Opinion
We have audited the financial statements of Hypersoft Technologies Limited (theCompany") which comprise the Balance Sheet as at 31st March 2020 the Statement ofProfit and Loss (including Other Comprehensive Income) the Statement of Changes in Equityand Statement of Cash Flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act2013 (the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended.(Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 and its loss loss under totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit oftheFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia (ICAI") together with the ethical requirements that are relevant to ouraudit of the financial statements under the provisions of the Act and the Rules thereunder and we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on the financialstatements.
Key Audit Matters
Key audit matters are those matters that in our professional judgement were of mostsignificant in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.
|Sr. No. ||Key Audit Matter ||Auditor's Response |
|1 ||Accuracy of recognition measurement presentation and disclosure revenues and other related balances in view adoption of Ind AS 115 "Revenue from Contracts with Customers" Revenue accounting standard applicable from 1st April 2018. ||Principal Audit Procedures: We assessed the Company's internal process to identify the impact of adoption of the new revenue accounting standard. Our audit approach consisted testing of the design and operating effectiveness of internal controls and procedures as follows: |
| ||Application of the new revenue accounting standard from the current financial year involves certain key judgements relating to identification of distinct performance obligations determination of transaction price of identified performance obligation appropriateness of the basis used to measure revenue recognized over a period and disclosures including presentations of balances in the standalone financial statements. Estimated efforts is a critical estimate to determine revenue as it requires consideration of progress of the contract efforts incurred till date efforts required to complete the remaining performance obligation. || Evaluated the design of internal controls relating to implementation of the new revenue accounting standard. |
| || || Selected a sample of existing continuing contracts and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. |
| || || Tested the relevant information accounting systems and change relating to contracts and related information used in recording and disclosing revenue in accordance with new revenue accounting standard. |
| || || Reviewed a sample of contracts to identify possible delays in achieving milestones which require change in estimated efforts to complete the remaining performance obligations. |
| ||Refer Note 22 to the financial statements. || Performed analytical procedures and test of details for reasonableness and other related material items. |
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Directors Report and CorporateGovernance Report but does not include the financial statements and our auditor's reportthereon. The Directors Report and Corporate Governance Report are expected to be madeavailable to us after the date of this auditor's report.
Our opinion on the financial statements does not cover the other information and wewill not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.
When we read the Directors report and Corporate Governance Report if we conclude thatthere is a material misstatement therein we are required to communicate the matter tothose charged with governance.
Management's Responsibility for the 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 financial statements that givea true and fair view of the financial position financial performance total comprehensiveincome changes in equity and cash flows of the Company in accordance with the IND AS andother accounting principles generally accepted in India. 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 implementation andmaintenance of 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 financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative 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 Financial Statements
Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurancebut is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of thesefinancial 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 financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.
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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company 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 uncertaintyexists 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 inthefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements thatindividually 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 reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act based on our audit 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 Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with the IndianAccounting Standards prescribed under Section 133 of the Act read with Rule 7 of Companies(Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 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 A. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.
(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 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 isaccordance with 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 and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i. The Company does not have pending litigations which would impact its financialposition;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.
2. As required by the Companies (Auditor's Report) Order 2016 (the Order")issued by the Central Government in terms of Sec 143 (11) of the Act we give inAnnexure B" a statement on the matters specified in paragraphs 3 and 4 of theOrder.
| ||For GRANDHY & Co |
| ||Chartered Accountants |
| ||Firm Regn. No 001007S |
| ||UDIN:2020175AAAABH5637 |
| ||(Naresh Chandra Gelli) |
| ||Partner |
|Place: Secunderabad ||M.No. 201754 |
|Date: 28th July 2020 || |
Annexure - A to the Independent 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 HypersoftTechnologies Limited (the Company) as of 31stMarch 2020 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'). 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.
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. Webelieve that the audit evidence we have obtained issufficient and appropriate to provide abasis for our audit opinion on the Company's internal financial controls system overfinancial 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.
In our opinion the Company has 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 2020based 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 GRANDHY & Co Chartered Accountants Firm Regn. No 001007S
| ||(Naresh Chandra Gelli) |
| ||Partner |
| ||M.No. 201754 |
|Place: Secunderabad || |
|Date: 28th July 2020 || |
Annexure - B to the Independent Auditors' Report
The Annexure referred to in our Independent Auditors' Report to the members of theHypersoft Technologies Ltd. on the financial statements for the period ended 31st March2020 we report that:
1.1 The Company is maintaining proper records showing full particulars including theQuantitative details and the situation of fixed assets.
1.2 The fixed assets have been physically verified by the Management at reasonableintervals and according to the information and explanations given to us no materialdiscrepancies were noticed on such verification. In our opinion the periodicity ofphysical verification is reasonable having regard to the size of the Company and thenature of its business.
1.3 According to the information and explanations given to us and on the basis of ourexamination of the records of the company the title deeds of immovable property are heldin the name of company.
2.1 The Company has inventory in the form of software products and licenses. Themanagement has carried out physical verification of inventory at reasonable interval.management.
2.2 As per the information given to us are no material discrepancies noticed on suchverification.
3.1 The Company has not granted any loans secured or unsecured during the period. Thusparagraphs 3 (iii) of the order is not applicable to the company.
4.1 In our opinion and according to the information and explanations given to us theCompany has not given any loans made investments or provided securities to companies andother parties listed under section185 and 186 of the Act.
5.1 The Company has not accepted any deposits from the public.
6.1 The Central Government has not prescribed the maintenance of Cost records undersection 148 (1) of the Act for any of the services rendered by the Company.
7.1 According to the information and explanations given to us and on the basis of ourexamination of the records the Company is generally regular in depositing undisputedstatutory dues including provident fund employees state insurance income tax sales taxservice tax Goods and Services Tax and other taxes to the appropriate authorities.According to the information and explanations given to us no undisputed amounts arepayable in respect of provident fund employees state insurance income tax sales taxservice tax and other taxes were in arrears as at 31st March 2020 for a periodof more than six months from the date they became payable.
7.2 According to the information and explanations given to us there are no materialdues of duties or taxes which are disputed and not deposited with the concernedauthorities.
8.1 The Company has not defaulted on any loans or borrowings from any financial
institution banks government or debenture holders during the year.
9.1 The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans. Accordingly paragraph 3(ix) ofthe Order is not applicable.
10.1 According to the information and explanations given to us no material fraud bythe Company or on the Company by its officers or employees has been noticed or reportedduring the course of our audit.
11.1 According to information and explanation given to us and based on our examinationof records of the company the company has paid /provided for managerial remuneration withthe requisite approvals mandated by the provisions of section 197 read with Schedule V ofthe Act.
12.1 In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.
13.1 According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.
14.1 According to the information and explanations given to us and based on ourexamination of records of the company the Company has not made any preferential allotmentor private placement of shares or fully or partly convertible debentures during the year.
15.1 According to the information and explanations given to us and based on ourexamination of records of the company the Company has not entered into non-cashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable.
16.1 The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.
| ||For GRANDHY & Co |
| ||Chartered Accountants |
| ||Firm Regn. No 001007S |
| ||(Naresh Chandra Gelli) |
| ||Partner |
|Place: Secunderabad Date: 28th July 2020 ||M.No. 201754 |