The Members of M/s Lee & Nee Softwares (Exports) Ltd.
Report on the Audit of the Standalone Financial Statements Opinion
We have audited the accompanying Standalone Financial Statements of M/sLEE & NEE SOFTWARES (EXPORTS) LTD(the Company) which comprise the BalanceSheet as at 31st March 2021 the Statement of Profit and Loss (including OtherComprehensive Income) the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended notes to the Standalone financial statements including a summary ofthe significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 (the Act') in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021its profit including other comprehensive income changes in equity and its cash flows forthe year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing(SAs) specified under Section 143(10) of the Companies Act 2013. Our responsibilitiesunder those standards are further described in the Auditor's Responsibilitiesfor the Audit of the Standalone Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India (ICAI') together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion on the standalone financial statements.
Key Audit Matters
Key audit matters (KAM') are those matters that in ourprofessional judgment were of most significance in our audit of the standalone financialstatements for the year ended March 31 2021. These matters were addressed in the contextof our audit of the standalone financial statements as a whole and in forming our opinionthereon and we do not provide a separate opinion on these matters.
We have determined the matters described below to be the key auditmatters to be communicated in our report:-
|Description of Key Audit Matters ||How the matter was addressed in our audit |
|Revenue Recognition- Fixed Price Contracts || |
|The Company inter alia engages in Fixed-price contracts wherein revenue is recognized based on the percentage of work completed. This is estimated by the Company on the basis of the completion of milestones and activities as agreed with the customers. Therefore the revenue is recognised on completion and certified milestone by the customers after obtaining the sign up from the customer. (Refer Note 2(c) to the standalone financial statements). ||In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient appropriate audit evidence: |
| ||Obtained an understanding of key internal controls over recording of activities completed and of general IT controls for the project management tool. Performed walk through of the underlying process and documented the controls and assessed the effectiveness of their design and implementation. Also performed tests to assess whether the controls were operating as designed. |
| ||Involved IT specialists to assess whether the project management tool captured activities completed in the correct period and whether the related milestone was derived from a system that is operating effectively. |
| ||Selected a sample of contracts using a mix of quantitative & qualitative criteria and performed the following procedures for each contract selected: |
| ||-Inspecting key terms including transaction price deliverables performance obligations timetable and milestones set out in Inspecting key terms including transaction price deliverables performance obligations timetable set out in the contract; |
| ||-Inquired of the relevant project managers about key aspects and the progress of the contracts including the estimated total contract costs key project risks amendments contingencies and billing schedules; |
| ||-verified project management tool for budgeted efforts and related milestones and verified accuracy of milestones based on actualization of efforts for delivered projects and past data; |
| ||-verified the details of activities completed with those stated in the customer contract and as confirmed by the project manager including agreeing the respective activities performed according to the project management tool with customer report/ confirmations which forms the basis of milestone completion; |
| ||-tested on a sample basis the underlying invoices in respect of fixed price contracts and related cash receipts; and |
| ||- verified the ageing analysis and perform analytical procedures based on revenue trends to assess the movements in accruals. |
The Company's management and Board of Directors are responsiblefor the other information. The other information comprises the information included in theAnnual Report but does not include the standalone financial statements and ourauditor's report thereon.
Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Responsibilities of Management for the Standalone Financial Statements
The Company's management and Board of Directors are responsiblefor the matters stated in Section 134(5) of the Act with respect to the preparation ofthese standalone financial statements that give a true and fair view of the state ofaffairs (financial position) financial performance (profit or loss including othercomprehensive income) changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
In preparing the standalone financial statements management and Boardof Directors are responsible for assessing the Company's ability to continue as agoing concern disclosing as applicable matters related to going concern and using thegoing concern basis of accounting unless the Board of Directors either intends toliquidate the Company or to cease operations or has no realistic alternative but to doso.
The Board of Directors is also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the StandaloneFinancial Statements
Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue to fraud or error and to issue an auditor's report that includes our opinion.Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with Standards on Auditing will always detect a materialmisstatement when it exists. Misstatements can arise from fraud or error and areconsidered material if individually or in the aggregate they could reasonably beexpected to influence the economic decisions of users taken on the basis of thesestandalone financial statements.
As part of an audit in accordance with Standards on Auditing weexercise professional judgment and maintain 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 inorder to design audit procedures that are appropriate in the circumstances. Under Section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls with reference to standalone financialstatements in place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures in the standalone financialstatements made by the management.
Conclude on the appropriateness of Management and Board of Directorsuse of the going concern basis of accounting and based on the audit evidence obtainedwhether a material uncertainty exists related to events or conditions that may castsignificant doubt on the Company's ability to continue as a going concern. If weconclude that a material uncertainty exists we are required to draw attention in ourauditor's report to the related disclosures in the standalone financial statementsor if such disclosures are inadequate to modify our opinion. Our conclusions are basedon the audit evidence obtained up to the date of our auditor's report. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludespublic disclosure about the matter or when in extremely rare circumstances we determinethat a matter should not be communicated in our report because the adverse consequences ofdoing so would reasonably be expected to outweigh the public interest benefits of suchcommunication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order2016 (the Order) issued by the Central Government of India in terms ofsub-section 143 (11) the Act we give in the Annexure A' a statement on thematters specified in the paragraphs 3 and 4 of the Order.
2. As required by Section 143(3) of the Act we report that:
a. We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b. In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.
c. The Standalone Balance Sheet the Statement of Profit and Loss(including Other Comprehensive Income) the Cash Flow Statement and Statement of changesin equity dealt with by this Report are in agreement with the books of account.
d. In our opinion the aforesaid standalone financial statements complywith the Indian Accounting Standards specified under section 133 of the Act read withCompanies (Indian Accounting Standards) Rules 2015 as amended.
e. On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164 (2) of the Act.
f. With respect to the adequacy of the internal financial controls withreference to standalone financial statements of the Company and the operatingeffectiveness of such controls refer to our separate Report in Annexure B'.
g. With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014as amended in our opinion and to the best of our information and according tothe best of our information and according to our explanations given to us:
i. The Company does not have any pending litigations which would impactits financial position in its Standalone Financial Statements.
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.
iii. The Company did not have any amount which had fallen due andrequired to be transferred to the Investor Education and Protection Fund by the Company.
iv. The disclosures in the standalone financial statements regardingholdings as well as dealings in specified bank notes during the period from 8 November2016 to 30 December 2016 have not been made in these
h. With respect to the matter to be included in the Auditor'sReport under Section 197(16) of the Act: In our opinion and according to the informationand explanations given to us no managerial remuneration has been paid/ provided to itsdirectors during the current year by the Company.
For Jain Sonu and Associates
Chartered Accountants Firm's Registration Number: 324386E
| ||Sonu Jain |
| ||Partner |
|Place: Kolkata ||Membership No.:060015 |
|Date: 29th June 2021 ||UDIN : 21060015AAAACY5879 |
ANNEXURE A TO THE INDEPENDENT AUDITOR'S REPORT
[REFFERED TO IN PARAGRAPH 1 UNDER REPORT ON OTHER LEGAL ANDREGULATORY REQUIREMENTS' OF OUR REPORT OF EVEN DATE ON THE STANDALONE FINANCIALSTATEMENTS OF LEE & NEE SOFTWARES (EXPORTS) LTD.]
(i) a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.
b) The Company has a regular program of physical verification of itsfixed assets by which all fixed assets are verified by the management according to theprogram of periodical physical verification in a phased manner which in our opinion isreasonable having regard to the size of the Company and the nature of its fixed assets.The discrepancies noticed on such physical verification were not material.
c) The Companies does not have any immovable property; hence theprovision is not applicable to the Company. (ii) The Company is in the business ofproviding software services and does not have any physical inventories. Accordinglyreporting under clause 3(ii) of the Order is not applicable to the Company.
(iii) According the information and explanations given to us theCompany has not granted any loans secured or unsecured to Companies firms LimitedLiability Partnership or other parties covered in the register maintained under Section189 of the Companies Act 2013. Accordingly the provisions of Clauses 3(iii) (a) (b) and(c) of the Order are not applicable to the Company.
(iv) In our opinion and according to the information and explanationsgiven to us the Company has not given loans guarantees security or made any investmentwhich needs to comply with the section 185 and 186 of the Companies Act 2013 during theyear.
(v) According to the information and explanations given to us theCompany has not accepted any deposits during the year from the public within the meaningof directives issued by the Reserve Bank of India and provisions of Sections 73 to 76 orany other relevant provisions of the Act and the Rules framed there under. Hence Clause3(v) of the Order is not applicable to the Company.
(vi) The Central Government has not prescribed the maintenance of costrecords under Section 148(1) of the Act for any of the services rendered by the Company.
(vii) a) According to the records of the Company the Company isregular in depositing with appropriate authorities undisputed statutory dues includingProvident Fund Employees State Insurance Income Tax Goods and Service Tax Cess andother statutory dues with the appropriate authorities to the extent applicable.
According to information and explanations given to us no undisputedamounts payable in respect of the Provident Fund Employees State Insurance Goods andService Tax Income Tax and Cess and other statutory dues were in arrears as at 31stMarch 2021 for a period of more than six months from the date they became payable.
b) According to information and explanation given to us there are nodues in respect of Goods and Service Tax Income Tax Sales Tax Service Tax Custom DutyDuty of excise Value Added Tax and Cess which have not been deposited with theappropriate authorities to the extent applicable on account of any dispute.
(viii) The Company has not taken any loans or borrowings from financialinstitution banks and government or has not issued any debentures. Hence reporting underclause 3 (viii) of the order is not applicable to the Company.
(ix) The Company has not raised any money by way of initial publicoffer further public offer debt instruments or term loans during the year. AccordinglyClause 3(ix) of the Order is not applicable to the Company.
(x) Based on the audit procedure performed and on the basis ofinformation and explanations provided by the management no fraud by the Company or nomaterial fraud on the Company by its officers or employees has been noticed or reportedduring the year.
(xi) According to the information and explanation given to us and basedon our examination of the records of the Company no director's remuneration has beenpaid or provided during the year. Accordingly Clause 3(xi) of the Order is notapplicable.
(xii) In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi Company.
Accordingly Clause 3(xii) of the Order is not applicable.
(xiii) According to the information and explanations given by themanagement transactions with the related parties are in compliance with section 177 and188 of Companies Act 2013 where applicable and the details have been disclosed in thenotes to the standalone Ind AS financial statements as required by the applicableaccounting standards.
(xiv) According to the information and explanation given to us andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year and hence reporting under Clause 3(xiv) of the Order is notapplicable to the Company.
(xv) In our opinion and according to the information and explanationgiven to us during the year the Company has not entered into any non-cash transactionswith its directors or persons connected with them. Accordingly Clause 3 (xv) of the Orderis not applicable to the Company.
(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934. Accordingly Clause 3 (xvi) of the Order is notapplicable to the Company.
ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT
[REFFERED TO IN PARAGRAPH 2.A.(f) UNDER REPORT ON OTHER LEGAL ANDREGULATORY REQUIREMENTS' OF OUR REPORT OF
EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF LEE & NEESOFTWARES (EXPORTS) LTD.]
Report on the Internal Financial Controls with reference to theaforesaid standalone financial statements under clause (i) of Sub-section 3 of section 143of the Companies Act 2013 (the Act) OPINION
We have audited the internal financial controls with reference tostandalone financial statements of Lee & Nee Softwares (Exports) Ltd. (theCompany) as of 31 March 2021 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date.
In our opinion the Company has in all material respects adequateinternal financial controls with reference to standalone financial statements and suchinternal financial controls were operating effectively as at 31 March 2021 based on theinternal financial controls with reference to standalone financial statements 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 (the Guidance Note).
MANAGEMENT'S RESPONSIBILTY FOR INTERNAL FINANCIAL CONTROLS
The Company's Management and the Board of Directors is responsiblefor establishing and maintaining internal financial controls based on the internalfinancial control with reference to standalone financial statements criteria establishedby the Company considering the essential components of internal controls stated in theGuidance Note. These responsibilities include the design implementation and maintenanceof adequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to respectiveCompany's policies the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to standalone financial statements of theCompany based on our Audit. We conducted our Audit in accordance with the Guidance Noteand the Standards on Auditing prescribed under section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls with reference tostandalone financial statements. Those standards and the Guidance Note require that wecomply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether adequate internal financial controls with reference to standalonefinancial statements were established and maintained and if such controls operatedeffectively in all material respects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial control system with reference to standalonefinancial statements and their operating effectiveness. Our audit of Internal Financialcontrols with reference to standalone financial statements included obtaining anunderstanding of internal financial controls assessing the risk that a material weaknessexists and testing and evaluating the design and operating effectiveness of internalcontrols based on the assessed risk. The procedures selected depends on the auditor'sjudgment including the assessment of the risk of material misstatement of the standalonefinancial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls system with reference to standalone financial statements.
MEANING OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TO STANDALONEFINANCIAL STATEMENTS
A Company's internal financial control with reference tostandalone financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of standalonefinancial statements for external purposes in accordance with generally acceptedaccounting principles. A Company's internal financial control with reference tostandalone financial statements include those policies and procedures that
(1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of theCompany ;
(2) provide reasonable assurance that transactions are recorded asnecessary to permit preparation of standalone financial statements in accordance withgenerally accepted accounting principles and that receipts and expenditures of theCompany are being made only in accordance with authorizations of management and directorsof the Company; and
(3) provide reasonable assurance regarding prevention or timelydetection of unauthorized acquisition use or disposition of the Company's assetsthat could have a material effect on the standalone financial statements.
INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS WITH REFERENCE TOSTANDALONE FINANCIAL STATEMENTS
Because of the inherent limitations of internal financial controls withreference to standalone financial statements including the possibility of collusion orimproper management override of controls material misstatements due to error or fraud mayoccur and not be detected. Also projections of any evaluation of the internal financialcontrols with reference to standalone financial statements to future periods are subjectto the risk that the internal financial controls with reference to standalone financialstatements may become inadequate because of changes in conditions or that the degree ofcompliance with the policies or procedures may deteriorate.
For Jain Sonu and Associates
Chartered Accountants Firm's Registration Number: 324386E
| ||Sonu Jain |
| ||Partner |
|Place: Kolkata ||Membership No.:060015 |
|Date: 29th June 2021 ||UDIN : 21060015AAAACY5879 |