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Megri Soft Ltd.

BSE: 539012 Sector: IT
NSE: N.A. ISIN Code: INE756R01013
BSE 00:00 | 28 Sep 174.95 8.30
(4.98%)
OPEN

158.35

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174.95

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158.35

NSE 05:30 | 01 Jan Megri Soft Ltd
OPEN 158.35
PREVIOUS CLOSE 166.65
VOLUME 2143
52-Week high 282.55
52-Week low 12.20
P/E 138.85
Mkt Cap.(Rs cr) 55
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 158.35
CLOSE 166.65
VOLUME 2143
52-Week high 282.55
52-Week low 12.20
P/E 138.85
Mkt Cap.(Rs cr) 55
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Megri Soft Ltd. (MEGRISOFT) - Auditors Report

Company auditors report

To the Members of Megri Soft Limited

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone Ind AS financial statements of Megri SoftLimited ("the Company") which comprise the Balance sheet as at March 31 2020the Statement of Profit and Loss including the statement of Other Comprehensive Incomethe Cash Flow Statement and the Statement of Changes in Equity for the year then endedand notes to the financial statements including a summary of significant accountingpolicies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2020 its profitincluding other comprehensive income its cash flows and the changes in equity for the yearended on that date.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the 'Auditor'sResponsibilities for the Audit of the Standalone Financial Statements' section of ourreport. We are independent of the Company in accordance with the 'Code of Ethics' issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the standalone financial statements.

Emphasis of Matter

We draw attention to Note 33 to the standalone financial results which explains theuncertainties and the management's assessment of the financial impact due to the lockdownand other restrictions related to the COVID-19 pandemic situation for which a definitiveassessment of the impact in the subsequent period is highly dependent upon circumstancesas they evolve. Our opinion is not modified in respect of this matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements for the financial yearended March 31 2020. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have determined the matters describedbelow to be the key audit matters to be communicated in our report.

S.No. Key Audit Matter Auditor's Response
01. Evaluation of uncertain tax positions The Company has material uncertain tax positions including matters under dispute which involves significant judgment to determine the possible outcome of these disputes. Refer Note 25 to the Standalone Financial Statements

Response to key audit matters & conclusion

Principal Audit Procedures

We performed the following substantive procedures: Obtained details of completed taxassessments and demands upto the year ended March 31 2020 from management. We involvedour internal experts to challenge the management's underlying assumptions in estimatingthe tax provision and the possible outcome of the disputes. Our internal experts alsoconsidered legal precedence and other rulings in evaluating management's position on theseuncertain tax positions. Additionally we considered the effect of new information inrespect of uncertain tax positions as at April 1 2019 to evaluate whether any change wasrequired to management's position on these uncertainties. Relying on relevant externalevidence available including legal opinion relevant judicial precedents and industrypractices getting management confirmation wherever necessary. We agree with management'sevaluation.

Information other than the Standalone Financial Statements and Auditors' Report Thereon

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the standalone financial statements and our auditors'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. Inconnection with our audit of the standalone financial statements our responsibility is toread the other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

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 Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the accounting principles generally accepted in India including the IndianAccounting Standards (Ind AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and

maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the standalonefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the [standalone]financial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by 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 inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions 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 standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

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 standalone financial statementsfor the financial year ended March 31 2020 and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Other Matters

The comparative financial information of the Company for the year ended 31 March 2020prepared in accordance with Ind AS included in these standalone financial statements havebeen audited by the predecessor auditor who had audited the financial statements for therelevant period. The report of the predecessor auditor on such comparative financialinformation dated 22nd May 2019 expressed an unmodified opinion. Our opinion is notmodified in respect of this matter

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure 1" a statement on the matters specified inparagraphs 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 explanations which to the bestof our knowledge and belief were necessary for the purpose of our audit;

b. In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books;

c. The Balance Sheet the Statement of Profit and Loss including the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the 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 Companies (IndianAccounting Standards) Rules 2015 as amended;

e. On the basis of written representations received from the directors as on March 312020 taken on record by the Board of Directors none of the directors is disqualified ason March 31 2020 from being appointed as a director in terms of Section 164(2) of theAct;

f. With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these standalone financial statements and theoperating effectiveness of such controls refer to our separate Report in "Annexure2" to this report;

g. In our opinion the managerial remuneration for the year ended March 31 2020 hasbeen paid/provided by the Company to its directors in accordance with the provisions ofsection 197 read with Schedule V to 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 as amended 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 standalone financial statements - Refer Note 25 to the standalonefinancial statements;

ii. The Company did not have any long-term contracts including derivative contracts; assuch the question of commenting on any material foreseeable losses thereon does not arise;

iii. During the year the company was not liable to transfer any amount to the InvestorEducation Protection Fund.

For Sanjay Arora & Associates
Chartered Accountants
ICAI Firm Registration Number: 008445N
Neelkant Gargya
Partner
Membership Number: 093624
Place of Signature: Chandigarh
Date: May 25 2020
UDIN:- 20093624AAAAAW5229

Annexure 1 referred to in paragraph 1 under the heading "Report on other legal andregulatory requirements" of our report of even date

On the basis of such checks as we considered appropriate and according to theinformation and explanations given to us during the course of our audit we report that:

1. In respect of its fixed assets:

a. The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets on the basis of available information.

b. The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over a period of 3 years which in our opinionis reasonable having regard to the size of the Company and the nature of its assets.Pursuant to the programme a portion of the fixed assets has been physically verified bythe Management during the year and no material discrepancies have been noticed on suchverification.

c. According to the information and explanations given by the management the titledeeds all the immovable properties of land and buildings are held in the name of thecompany. In respect of land that has been taken on lease and included in fixed assets inthe financial statements the lease is in the name of the Company.

2. The Company is in the business of rendering software services and consequentlydoes not hold any inventory. Therefore the provisions of Clause (ii) of paragraph 3 ofthe said Order are not applicable to the Company.

3. According to the information and explanations furnished to us the company has notgranted secured or unsecured loans to companies firms or other parties covered in theregister maintained under Section 189 of the Act. Accordingly the provisions of clause 3(iii) (a) to (C) of the Order are not applicable to the Company and hence not commentedupon.

4. In our opinion and according to the information and explanations given to usprovisions of section 186 of the Companies Act 2013 in respect of investments made havebeen complied with by the company. There are no loans guarantees and securities given inrespect of which provisions of section 185 and 186 of the Companies Act 2013 areapplicable and hence not commented upon.

5. The Company has not accepted any deposits from the public during the year and hencethe provisions of clause 3 (v) of the Order are not applicable to the company.

6. The maintenance of cost records has not been specified by the Central Governmentunder Section 148(1) of the Companies Act 2013 for the business activities carried out bythe Company. Thus reporting under Clause 3(vi) of the order is not applicable to theCompany.

7. According to the information and explanations given to us and based on the recordsof the company examined by us:

a. The Company is regular in depositing with appropriate authorities undisputedstatutory dues including provident fund employees' state insurance income-tax servicetax value added tax goods and service tax cess and other statutory dues applicable toit.

b. There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Goods and Service Tax Customs Duty Cess and other materialsStatutory dues in arrears as at March 31 2020 for a period of more than six months fromthe date they became payable.

c. However according to information and explanations given to us the following duesof income tax have not been deposited/disputed by the Company:

Nature of Statute Nature of Dues Amount (in Rs.) Period to which amount relates Forum where dispute is pending
Income tax Act 1961 Tax and interest 7347744/- A.Y 2013-14 CIT(Appeals)
Income tax Act 1961 Tax and interest 6515710/- A.Y 2014-15 CIT(Appeals)
Income tax Act 1961 Tax and interest 1867998/- A.Y 2016-17 CIT(Appeals)

8. In our opinion and according to the information and explanations given to us theCompany has not defaulted in the repayment of dues to banks. The Company has not taken anyloan either from financial institutions or from the government and has not issued anydebentures. Hence the provisions of clause 3 (vii) of the Order are not applicable to theCompany.

9. The company has not raised money by way of initial public offer or further publicoffer including debt instruments and term Loans. Accordingly the provisions of clause 3(ix) of the Order are not applicable to the Company.

10. Based upon the audit procedures performed and the information and explanationsgiven by the management we report that no fraud by the Company or on the company by itsofficers or employees has been noticed or reported during the year

11. Based upon the audit procedures performed and the information and explanationsgiven by the management the managerial remuneration has been paid or provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;

12. In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3 (xii) of the Order are not applicable to the Company.

13. According to the information and explanations given by the management transactionswith the related parties are in compliance with section 177 and 188 of Companies Act 2013where applicable and the details have been disclosed in the notes to the financialstatements as required by the applicable accounting standards.

14. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year underreview. Accordingly the

provisions of clause 3 (xiv) of the Order are not applicable to the Company and hencenot commented upon.

15. Based upon the audit procedures performed and the information and explanationsgiven by the management the company has not entered into any non-cash transactions withdirectors or persons connected with him. Accordingly the provisions of clause 3 (xv) ofthe Order are not applicable to the Company and hence not commented upon.

16. In our opinion the company is not required to be registered under section 45 IA ofthe Reserve Bank of India Act 1934 and accordingly the provisions of clause 3 (xvi) ofthe Order are not applicable to the Company and hence not commented upon.

For Sanjay Arora & Associates
Chartered Accountants
ICAI Firm Registration Number: 008445N
Neelkant Gargya
Partner
Membership Number: 093624
Place of Signature: Chandigarh
Date: May 25 2020
UDIN:- 20093624AAAAAW5229

ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE IND ASFINANCIAL STATEMENTS OF MEGRI SOFT LIMITED

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 Megri SoftLimited ("the Company") as of March 31 2020 in conjunction with our audit ofthe standalone financial statements of the Company for 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the Company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these standalone financial statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the "Guidance Note")and the Standards on Auditing as specified under section 143(10) of the Companies Act2013 to the extent applicable to an audit of internal financial controls both issued bythe Institute of Chartered Accountants of India. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls over financialreporting with reference to these standalone Financial statements 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 with reference to thesestandalone Financial statements and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting with reference to these standaloneFinancial statements assessing the risk that a material weakness exists and testing andevaluating the design and operating effectiveness of internal control based on theassessed risk. The procedures selected depend on the auditor's judgement including theassessment of the risks of material misstatement of the financial statements whether dueto 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 internal financial controls system overfinancial reporting with reference to these standalone Financial statements.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting with reference to thesestandalone financial statements is a process designed to provide reasonable assuranceregarding the reliability of financial reporting and the preparation of financialstatements for external purposes in accordance with generally accepted accountingprinciples. A company's internal financial control over financial reporting with referenceto these standalone Financial statements includes those policies and procedures that:

1. pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;

2. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and

3. provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting withreference to these standalone Financial statements

Because of the inherent limitations of internal financial controls over financialreporting with reference to these standalone financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these standalone Financial statements to future periods are subject to the risk thatthe internal financial control over financial reporting may become inadequate because ofchanges in conditions or that the degree of compliance with the policies or proceduresmay deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting with reference to these standalonefinancial statements and such internal financial controls over financial reporting withreference to these standalone Financial statements were operating effectively as at March31 2020 based on the internal control over financial reporting criteria established bythe Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India

For Sanjay Arora & Associates
Chartered Accountants
ICAI Firm Registration Number: 008445N
Neelkant Gargya
Partner
Membership Number: 093624
Place of Signature: Chandigarh
Date: May 25 2020
UDIN:- 20093624AAAAAW5229

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