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Oracle Financial Services Software Ltd.

BSE: 532466 Sector: IT
NSE: OFSS ISIN Code: INE881D01027
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NSE 00:00 | 21 Jan 3674.15 -24.50
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OPEN 3701.25
PREVIOUS CLOSE 3698.60
VOLUME 10858
52-Week high 5144.60
52-Week low 2933.05
P/E 18.82
Mkt Cap.(Rs cr) 31,697
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3701.25
CLOSE 3698.60
VOLUME 10858
52-Week high 5144.60
52-Week low 2933.05
P/E 18.82
Mkt Cap.(Rs cr) 31,697
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Oracle Financial Services Software Ltd. (OFSS) - Auditors Report

Company auditors report

To the Members of

Oracle Financial Services Software Limited

Report on the Audit of Standalone Ind AS Financial Statements

1. Opinion

We have audited the accompanying standalone Ind AS financial statementsof Oracle Financial Services Software Limited ("the Company") which comprisethe Balance Sheet as at March 312021 the Statement of Profit and Loss including OtherComprehensive Income the Statement of Changes in Equity and the Statement of Cash Flowsfor the year then ended and notes to the financial statements including a summary ofsignificant 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 Ind AS 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 Indian Accounting Standardsprescribed under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2021the profit and total other comprehensive income changes in equity and its cash flows forthe year ended on that date.

2. Basis for Opinion

We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing specified under Section 143(10) of the CompaniesAct 2013 ("the Act"). Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the standalone Ind ASFinancial 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 together with the ethical requirements that are relevant to our audit of thestandalone Ind AS financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on standaloneInd AS financial statements.

3. Key Audit Matter

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the standalone Ind AS financial statements ofthe current year. These matters were addressed in the context of our audit of thestandalone Ind AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. We have determined the mattersdescribed below to be the key audit matters to be communicated in our report.

Key Audit Matter Auditor's Response
1. Evaluation of income taxes provision Principal Audit Procedures:
The Company has uncertain income tax positions which includes matters under dispute involving significant judgment to determine the possible outcome of these disputes. a) Evaluated the design and tested the operating effectiveness of the relevant controls through combination of procedures involving inquiry and observation reperformance and inspection of evidence in respect of operation of these controls to assess how the Company monitors income tax and related developments and their assessment of the potential impact on the Company.
Management is required to ensure compliance with tax laws including transfer pricing mechanism and appropriately determine the tax expense and its consequential impact on adequacy of provision for income tax and deferred tax. b) For uncertain tax positions obtained details of income tax assessments appeal orders and income tax demands from management.
In accordance with Appendix C "Uncertainty over Income tax Treatments" in Ind AS 12 "Income taxes" the Company has during the year ended March 31 2021 reviewed the uncertain tax positions in respect of all matters and wherever considered appropriate recognised income tax provisions relating to uncertain income tax treatments and the related interest expense thereon. c) Evaluated the management's underlying assumptions of the validity and adequacy of provisions for uncertain income tax positions and evaluated the basis of determination of the possible outcome of the disputes. Also considered legal precedence and other rulings and read where applicable external advice sought by the Company for these uncertain income tax positions and reviewed related correspondence in evaluating management's position on these uncertain income tax matters. We discussed with management and understood the rationale for recording the provision for uncertain tax positions.
Refer note 2.2 (Rs.) 16 27 (v) 28 (b) and 40 of the Standalone Ind AS Financial Statements. d) Tested current income tax and deferred tax computation provided by the management and checked the arithmetical accuracy of the amounts reported for current and deferred tax including assessment of effective tax rate reconciliation to evaluate the Company's total income tax expense for the year.
2. Revenue Recognition Principal Audit Procedures:
The Company's revenue streams consist of license fees maintenance fees and consulting fees - fixed price and time & material contracts. a) Evaluated whether the revenue recognition of the Company is in accordance with the accounting policies and principles of Ind AS 115.
Revenue from contracts with customers is recognized in accordance with the requirements of Ind AS 115 Revenue from Contracts with Customers ("Ind AS 115"). b) Obtained an understanding of management's internal controls over the revenue process and evaluated whether these were designed in line with the Ind AS 115. Tested relevant internal controls including information technology (IT) controls over revenue process. Carried out a combination of procedures involving inquiry and observation reperformance and inspection of evidence in respect of operation of these controls.
The application of Ind AS 115 involves certain key judgements relating to identification of distinct performance obligations determination of the transaction price allocation of transaction price to the identified performance obligations especially to license fees the appropriateness of the basis used to measure revenue recognised over time or at a point in time including relevant cut-off at period end dates. c) Performed following procedures on a sample of revenue contracts entered into by Company selected on a test check basis as deemed appropriate:
Refer note 2.2.(e) 17 27 (viii) and 44 of the standalone Ind AS Financial Statements. i) Read and identified the distinct performance obligations in these contracts and compared these performance obligations with those identified and recorded in the books of accounts.
ii) Read the terms of the contracts and checked determination of the transaction price including any variable consideration. Also checked management's evaluation of the stand-alone selling price for each performance obligation.
iii) Tested the basis used by the management to measure revenue recognised over time or at a point in time as per the requirements of Ind AS 115.
d) Performed cut-off testing procedures (by selecting a sample of contracts either side of year-end) to test that revenue has been recognised in the appropriate accounting period.

4. Information other than the standalone Ind AS financial statementsand Auditor's report thereon

The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in theDirectors Report Corporate Governance Report and Management Discussion and Analysis butdoes not include the standalone Ind AS financial statements and our auditor's reportthereon. These reports are expected to be made available to us after the date of ourauditor's report.

Our opinion on the standalone Ind AS financial statements does notcover the other information and we will not express any form of assurance thereon.

In connection with our audit of the standalone Ind AS financialstatements our responsibility is to read the other information identified above when itbecomes available and in doing so consider whether the other information is materiallyinconsistent with the standalone Ind AS financial statements or our knowledge obtained inthe audit or otherwise appears to be materially misstated.

When we read the other information included in the above reports if weconclude that there is material misstatement therein we are required to communicate thematter to those charged with governance and determine the actions under the applicablelaws and regulations.

5. Management's responsibility for the standalone Ind AS FinancialStatements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone Ind ASfinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing 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.

In preparing the standalone Ind AS financial statements Company'sBoard of Directors is 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 management either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

The Board of Directors are also responsible for overseeing theCompany's financial reporting process.

6. Auditor's Responsibilities for the Audit of the standalone Ind ASFinancial Statements

Our objectives are to obtain reasonable assurance about whether thestandalone Ind AS financial statements as a whole are free from material misstatementwhether due 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 Ind AS 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:

i) Identify and assess the risks of material misstatement of thestandalone Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

ii) Obtain an understanding of internal financial controls relevant tothe audit in order to design audit procedures that are appropriate in the circumstances.Under section 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the Company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

iii) Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

iv) Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theability of the Company to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone Ind AS financial statements or if such disclosuresare inadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

v) Evaluate the overall presentation structure and content of thestandalone Ind AS financial statements including the disclosures and whether thestandalone Ind AS financial statements represent the underlying transactions and events ina manner that achieves 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 wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our 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 standalone Ind ASfinancial statements of the current period 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.

7. Report on Other Legal and Regulatory Requirements

i) 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 of the Act we give in the "Annexure 1" a statement on thematters specified in paragraphs 3 and 4 of the Order.

ii) As required by section 143 (3) of the Act based on our audit wereport that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purpose of our auditof standalone Ind AS Financial Statements.

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 Balance Sheet Statement of Profit and Loss including OtherComprehensive Income the Statement of Cash Flow 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 statementscomply with the Ind AS specified under section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

e) On the basis of written representations received from the directorsas on March 31 2021 taken on record by the Board of Directors none of the directors isdisqualified as on March 312021 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 overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure 2" to this report.

g) With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended inour opinion and to the best of our information and according to the explanations given tous the remuneration paid by the Company to its directors during the year is in accordancewith the provisions of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on thefinancial position in its standalone Ind AS financial statements - Refer Note 28 (b) andNote 40 to the standalone Ind AS financial statements;

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses; and

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.

Annexure 1 to the Independent Auditor's Report of even date on thestandalone Ind AS financial statements of Oracle Financial Services Software Limited

Referred to in paragraph [7(i)] under Report on Other Legal andRegulatory Requirements of our report of even date

(i) a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixed assets.

b) Fixed assets have been physically verified by the management duringthe year and no material discrepancies were identified on such verification.

c) According to the information and explanations given by themanagement the title deeds of immovable properties included in property plant andequipment are held in the name of the Company.

(ii) The Company's business does not involve inventories andaccordingly the requirements under paragraph 3(ii) of the Companies (Auditor's report)Order 2016 ("the Order") are not applicable to the Company.

(iii) According to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms limitedliability partnerships or other parties covered in the register maintained under section189 of the Companies Act 2013 ("the Act"). Accordingly the provisions ofparagraph 3(iii)(a) (b) and (c) of the Order are not applicable to the Company and hencenot commented upon.

(iv) In our opinion and according to the information and explanationsgiven to us provisions of section 186 of the Act in respect of investments made have beencomplied with by the Company. In our opinion and according to the information andexplanations given to us there are no loans guarantees and securities granted in respectof which provisions of section 185 and section 186 of the Act are applicable and hence notcommented upon.

(v) The Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of clause 3(v) of the Order are not applicable tothe Company.

(vi) According to the information and explanations given to us theCentral Government has not specified the maintenance of cost records under Section 148(1)of the Act for the products/services of the Company.

(vii) a) Undisputed statutory dues including provident fundincome-tax sales tax service tax duty of customs value added

tax cess and other material statutory dues have generally beenregularly deposited with the appropriate authorities though there have been considerabledelays in few cases of foreign withholding tax. As explained to us the Company did nothave any dues of excise duty.

b) According to the information and explanations given to us therewere no undisputed dues in respect of provident fund income-tax service tax sales taxduty of customs value added tax cess and other material statutory dues which wereoutstanding at the year end for a period of more than six months from the date theybecame payable.

c) According to the records of the Company the dues outstanding ofincome-tax sales tax service tax duty of customs value added tax and cess on accountof any dispute are as follows:

Name of the statute Nature of the dues Amount (Rs.) Period to which the amount relates Forum where dispute is pending
Income Tax 18764 April 2007 to March 2008 Income Tax Appellate Tribunal
Tax Deducted at Source 337202249 April 2011 to March 2012 Commissioner of Appeal (Income-tax)
Tax Deducted at Source 326252072 April 2012 to March 2013 Commissioner of Appeal (Income-tax)
Tax Deducted at Source 403180085 April 2013 to March 2014 Commissioner of Appeal (Income-tax)
Income Tax 2025447376 April 2014 to March 2015 Commissioner of Appeal (Income-tax)
The Income Tax Act 1961 Tax Deducted at Source 293250728 April 2014 to March 2015 Commissioner of Appeal (Income-tax)
Income Tax 1579304913 April 2015 to March 2016 Commissioner of Appeal (Income-tax)
Tax Deducted at Source 254156280 April 2015 to March 2016 Commissioner of Appeal (Income-tax)
Tax Deducted at Source 164017904 April 2016 to March 2017 Commissioner of Appeal (Income-tax)
Income Tax 217435490 April 2017 to March 2018 Assistant Director of Income Tax CPC
Tax Deducted at Source 122908694 April 2017 to March 2018 Commissioner of Appeal (Income-tax)
Sales Tax (MVAT) 28943706 April 2012 to March 2013 Joint Commissioner of Sales Tax (Appeals)
Sales Tax (MVAT) 26063769 April 2013 to March 2014 Joint Commissioner of Sales Tax (Appeals)
Maharashtra Value Added Tax Act 2002 Sales Tax (MVAT) 19890239 April 2014 to March 2015 Joint Commissioner of Sales Tax (Appeals)
Sales Tax (MVAT) 22169469 April 2015 to March 2016 Joint Commissioner of Sales Tax (Appeals)
Sales Tax (MVAT) 37302763 April 2016 to March 2017 Deputy Commissioner of Sales Tax
Central Sales Tax Act 2002 457394 April 2013 to March 2014 Joint Commissioner of Sales Tax (Appeals)
Sales Tax (CST) 46440 April 2016 to March 2017 Deputy Commissioner of Sales Tax

Note 1: The demand of Income Tax as reported above is net of demandpaid under protest and refunds adjusted against said demand of Rs. 1766512629.

Note 2: The demand of Sales Tax as reported above is net of demand paidunder protest against said demand of Rs. 9930690.

(viii) The Company did not have any outstanding loans or borrowing duesin respect of a financial institution or bank or to government or dues to debentureholders during the year.

(ix) According to the information and explanations given by themanagement the Company has not raised any money by way of initial public offer or furtherpublic offer or debt instruments and term loans hence reporting under paragraph 3 (ix) isnot applicable to the Company.

(x) Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the standalone Ind AS financial statements andaccording to the information and explanations given by the management we report that nomaterial fraud by the Company or no material fraud on the Company by the officers andemployees of the Company has been noticed or reported during the year.

(xi) According to the information and explanations given by themanagement the managerial remuneration has been paid / provided in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct.

(xii) In our opinion the Company is not a nidhi company. Thereforethe provisions of paragraph 3(xii) of the Order are not applicable to the Company.

(xiii) According to the information and explanations given by themanagement transactions with the related parties are in compliance with section 177 and188 of the Act where applicable and the details have been disclosed in the notes to thestandalone Ind AS financial statements as required by the applicable accountingstandards.

(xiv) According to the information and explanations given to us and onan overall examination of the balance sheet the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year under review and hence reporting requirements under paragraph 3(xiv) are notapplicable to the Company.

(xv) According to the information and explanations given by themanagement the Company has not entered into any non-cash transactions with directors orpersons connected with them as referred to in section 192 of the Act.

(xvi) According to the information and explanations given to us theprovisions of section 45-IA of the Reserve Bank of India Act 1934 are not applicable tothe Company.

Annexure 2 to the Independent Auditor's Report of even date on thestandalone Ind AS financial statements of Oracle Financial Services Software Limited

Referred to in paragraph [7(ii)(Rs.)] under Report on Other Legal andRegulatory Requirements of our report of even date

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

1. We have audited the internal financial controls over financialreporting of Oracle Financial Services Software Limited ("the Company") as ofMarch 312021 in conjunction with our audit of the standalone Ind AS financial statementsof the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India (ICAI). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company'sinternal financial controls over financial reporting based on our audit. We conducted ouraudit in accordance with the Guidance Note and the Standards on Auditing as specifiedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls and both issued by the Institute of Chartered Accountants of India.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the financial 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 internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

4. A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes 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 financial statements in accordance with generallyaccepted accounting principles and that receipts and expenditures of the company arebeing made only in accordance with authorisations of management and directors of thecompany; and

(3) provide reasonable assurance regarding prevention or timelydetection of unauthorised acquisition use or disposition of the company's assets thatcould have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

5. Because of the inherent limitations of internal financial controlsover financial reporting including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

6. In our opinion the Company has in all material respects anadequate internal financial controls system over financial reporting and such internalfinancial controls over financial reporting were operating effectively as at March 312021 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls over Financial Reporting issued by theInstitute of Chartered Accountants of India.

For Mukund M. Chitale & Co.
Chartered Accountants
Firm Regn. No. 106655W
(S.M.Chitale)
Partner
M. No. 111383
UDIN: 21111383AAAAGM5677
Date: May 05 2021
Place: Mumbai

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