To the Members of CYBERMATE INFOTEK LIMITED
Report on the Standalone Ind AS Financial Statements
We have audited the accompanying Standalone Ind AS financial statements of CYBERMATEINFOTEK LIMITED (the Company) which comprises the Balance Sheet as atMarch 31 2019 the Statement of Prot and Loss (Including other Comprehensive Income)Cash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of signicant accounting policies and other explanatory information. (Hereinafterreferred to as Standalone Ind AS Financial Statements).
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Companies Act 2013(the Act) in the manner so required and give a true andfair view in conformity with Indian Accounting Standards prescribed under Section 133 ofthe Act read with the Companies(Indian Accounting Standards) Rules 2015 as amended(Ind AS) and other accounting principles generally accepted in India includingInd AS of the financial position of the Company as at March 312019 and its Protincluding other comprehensive income it's cash Thow and changes in the equity for theyear ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specied undersection 143(10) of 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 (ICAI) together with the independence requirements that are relevant to our audit ofthe Ind AS financial statements under the provisions of the Act and the Rules madethereunder and we have fullled our other ethical responsibilities in accordance withthese requirements and the ICAI's Code of Ethics. We believe that the audit evidence wehave obtained is sucient and appropriate to provide a basis for our audit opinion on theStandalone Ind AS financial statements.
Key Audit Matters
Issue of Foreign Currency Convertible Bonds (FCCB)
The company has issued FCCB of US$ 10500000 1% coupon Foreign Currency convertibleBond's due upon completion of Five years from the date of issue . The bonds will bearinterest at the rate 1% per annum from the Interest Commencement date up to the dateprior to the date of maturity.
Principal Audit Procedures
The recognition of FCCB in Books of Accounts as per Ind AS 109- FinancialInstruments and Ind AS 32- Financial Instruments : Presentation involves Professional Judgment relating to determination of repayment and convertibleobligations over the tenure of FCCB's. Refer Note No.33 in Notes to Consolidated FinancialStatements.
Accuracy of recognition measurement presentation and disclosures of revenues andother related balances in view of adoption of Ind AS 115 Revenue from Contracts withCustomers (new revenue accounting standard)
The application of the new revenue accounting standard involves certain key judgmentsrelating to identication of distinct performance obligations determination of transactionprice of the identied performance obligations the appropriateness of the basis used tomeasure revenue recognized over a period. Additionally new revenue accounting standardcontains disclosures which involves collation of information in respect of disaggregatedrevenue and periods over which the remaining performance obligations will be satisfiedsubsequent to the balance sheet date.
Principal Audit Procedures
We assessed the Company's process to identify the impact of adoption of the new revenueaccounting standard.
Our audit approach consisted testing of the design and operating effectiveness of theinternal controls and substantive testing as follows:
Thevaluated the design of internal controls relating to implementation of thenew revenue accounting standard.
Selected a sample of continuing and new contracts and tested the operatingeffectiveness of the internal control relating to identification of the distinctperformance obligations and determination of transaction price. We carried out acombination of procedures involving enquiry and observation reperformance and inspectionof evidence in respect of operation of these controls.
Tested the relevant information technology systems' access and change managementcontrols relating to contracts and related information used in recording and disclosingrevenue in accordance with the new revenue accounting standard.
Selected a sample of continuing and new contracts and performed the followingprocedures:
Read analysed and identified the distinct performance obligations in thesecontracts.
Compared these performance obligations with that identied and recorded by theCompany.
Considered the terms of the contracts to determine the transaction priceincluding any variable consideration to verify the transaction price used to computerevenue and to test the basis of estimation of the variable consideration.
Samples in respect of revenue recorded for time and material contracts weretested using a combination of approved time sheets including customer acceptancessubsequent invoicing and historical trend of collections and disputes.
Sample of revenues disaggregated by type and service offerings was tested withthe performance obligations specified in the underlying contracts.
In respect of samples relating to x ed-price contracts progress towardssatisfaction of performance obligation used to compute recorded revenue was veried withactual and estimated eorts from the time recording and budgeting systems. We also testedthe access and change management controls relating to these systems.
Sample of revenues disaggregated by type and service oeerings was tested withthe performance obligations specified in the underlying contracts.
Performed analytical procedures for reasonableness of revenues disclosed by typeand service oerings.
We reviewed the collation of information and the logic of the report generatedfrom the budgeting system used to prepare the disclosure relating to the periods overwhich the remaining performance obligations will be satisfied subsequent to the balancesheet date
Evaluation of uncertain tax positions
The Company has material uncertain tax positions including matters under dispute whichinvolves significant judgment to determine the possible outcome of these disputes.
Principal Audit Procedures
Obtained details of completed tax assessments and demands for the year ended March 312019 from management. We involved our internal experts to challenge the management'sunderlying assumptions in estimating the tax provision and the possible outcome of thedisputes. Our internal experts also considered legal precedence and other rulings inevaluating management's position on these uncertain tax positions. Additionally weconsidered the effect of new information in respect of uncertain tax positions as at April1 2018 to evaluate whether any change was required to management's position on theseuncertainties.
Emphasis of Matter
M/s WincereInc (the Company) & Himanshu P Kansara has led petition u/s 7 of IBC2016 against the Company at the Honorable NCLT Hyderabad bench. The Honorable NCLT passedthe order by admitting the petition and appointed Resolution Professional.
However the same has been granted Stay by the Honorable Supreme Court.
Information Other than the Ind AS Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexure to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the Ind AS financial statements and our auditor's report thereon.
Our opinion on the Ind AS financial statements does not cover the other information andwe do not express any form of assurance conclusion thereon.
In connection with our audit of the Ind AS financial statements our responsibility isto read the other information and in doing so consider whether the other information ismaterially inconsistent with the Ind AS financial statements or our knowledge obtainedduring the course of our audit or otherwise appears to be materially misstated.
If based on the work we have performed we conclude that there is a materialmisstatement of this other information; we are required to report that fact. We havenothing to report in this regard.
Management's Responsibility for the Ind AS 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 and presentation of these Standalone IndAS financial statements that give a true and fair view of the financial positionfinancial performance(including the other comprehensive income) cash ows and Statement ofChanges in Equity of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specied underSection 133 of the Act read with relevant rules issued there under. This responsibilityincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; design implementation andmaintenance of adequate internal financial controls that are operating eecti vely forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Ind AS financial statements that give a true and fairview and are free from material misstatement whether due to fraud or error.
In preparing the Ind AS financial statements management is responsible for assessingthe Company'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 tOfficease operations or has no realisticalternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibilities for the Audit of the Standalone Ind AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Ind ASfinancial 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 inThuence the economic decisions of userstaken on the basis of these Standalone Ind AS 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 Ind ASnancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sucient 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 financial controls 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 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 signicant 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 Standalone Ind AS financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the CompanytOfficease to continue as a going concern.
Evaluate the overall presentation structure and content of the Standalone IndAS financial statements including the disclosures and whether the Standalone Ind ASfinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone Ind AS financiala statement that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may be in uenced.We consider quantitative materiality and qualitative factors in (i) planning the scope ofour audit work and in evaluating the results of our work; and (ii) to evaluate the effectof any identied misstatements in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and signicant audit ndings including an y signicantdeciencies 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 signicance in the audit of the Standalone Ind AS financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benets of such communication.
Report on Other Legal and Regulatory
1. As required by the Companies (Auditor's Report) Order 2016 (the Order)issued by the Central Government of India in terms of subsection (11) of Section143 of theAct we give in the Annexure A a statement on the matters Specied in paragraphs 3 and 4of the Order.
2. As required by Section 143(3) of the Act we further 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 Prot and Loss (including Other ComprehensiveIncome) the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account. d. In our opinion theaforesaid Standalone Ind AS financial statements comply with the applicable IndianAccounting Standards specied under Section 133 of the Act read with relevant rules issuedthere under.
e. On the basis of written representations received from the directors as on March 312019 and taken on record by the Board of Directors none of the directors is disqualiedas on March 31 2019 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 and the operating effectiveness of such controls refer to ourseparate report in Annexure B'; and
g. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:
I. The Company has pending litigations which would impact its financial position.
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.
Annexure A to the Auditor's Report
Annexure referred to in paragraph 1 of Our Report of even date to the members ofCYBERMATE INFOTEK LIMITED on the accounts of the company for the year ended 31st March2019 Under Report on other Legal & Regulatory Requirements
i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The Company has a program of verication to cover all the items of fixed assets in aphased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically veried by the management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verication.
(c) According to the information and explanations given to us and on the basis of ourexamination of records of the Company the company is not holding any immovable propertyhence this clause is not applicable to the company.
ii. The company has no Inventory. Accordingly the provisions of this clause are notapplicable to the Company.
iii. The Company has not granted any loans secured or unsecured to companies rmsand Limited Liability partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013. Therefore the provisions of Clause 3(iii)(iii)(a) (iii)(b) and (iii)(c) of the said order are not applicable to the company.
iv. The Company has not granted any loans or provided any guarantee or security to theparties covered under section 185 of the Act. In respect of the Investments made by theCompany the provisions of section 186 of The Companies Act 2013 have been complied with.
v. The Company has not accepted any deposits from the public covered under Section 73to 76 of the Companies Act 2013 and rules framed there under to the extent notied.
vi. The Central Government has not prescribed the maintenance of cost records undersection 148(1) of The Companies Act 2013.
vii. (a) The Company has not been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Goods and Service Tax and othermaterial statutory dues applicable to it with the appropriate authorities.
(b) There were undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Goods and Service Tax Customs Duty Excise Duty Cess andother material statutory dues in arrears as at March 31 2019 for a period of more thansix months from the date they became payable.
|# Name of the statute ||Nature of the Dues ||Amount (Rs) ||Period to which the amount relates ||Date of Payment |
|1 Telangana Profession Act ||Profession Tax ||281832 ||2018-19 ||Amount not paid till date |
|2 Employees Provident Fund & Misc Provisions Act 1952 ||Provident Fund ||1072723 ||2018-19 ||Amount not paid till date |
|3 Income Tax Act 1961 ||TDS ||1957444 ||2018-19 ||Amount not paid till date |
(c) According to the information and explanations given to us and the records of theCompany examined by us the particulars of Income tax as at 31 March 2019 which have notbeen deposited on account of a dispute are as follows:
|# Name of the statute ||Nature of the Dues ||Amount (Rs) ||Period to which the amount relates ||Forum where the dispute is pending |
|1 Income Tax Act 1961 ||Income Tax ||64088348 ||A.Y. 2009-10 ||CIT (A) |
|2 Income Tax Act 1961 ||Income Tax ||17034842 ||A.Y. 2011-12 ||CIT(A) |
|3 Income Tax Act 1961 ||Income Tax ||27663700 ||A.Y. 2012-13 ||CIT (A) |
|4 Income Tax Act 1961 ||Income Tax ||38356680 ||A.Y. 2013-14 ||ITAT(Appeals) |
viii. In our opinion and according to information and explanations given to us theCompany has not defaulted in repayment of any loans taken from Banks or FinancialInstitutions or Government and has not issued any debentures during the year underconsideration.
ix. The Company has issued 1% Foreign currency convertible bonds amounting to Rs682500000 and have been utilized for the purpose for which they have been raised .
x. According to the information and explanations given to us no material fraud by thecompany or on the company by its ocer s or employees has been noticed or reported duringthe course of our Audit.
xi. The company has paid/provided for managerial remuneration in accordance with therequisite approvals mandated by the provisions of section 197 of Companies Act 2013.
xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it; the Provisions of clause 3(xii) of the order are not applicable to the company.
xiii. The Company has entered into transactions with related parties in compliance withthe provisions of section 188 of the Act. The details of such related party transactionshave been disclosed in the financial statements as required under Accounting standard (AS)18 related party disclosures specied under section 133 of the Act read with relevantrules issued there under.
xiv. (a) According to the information and explanations given by the management thecompany has made preferential allotment during the year.
(b) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of Sections 62 of the companies Act 2013 inrespect of preferential allotment of shares.
(c) Amount raised by way of Preferential allotment was solely utilized for the purposefor which amount was raised. Details of Preferential Allotment are given below:
|# Name of Allotee ||No.of Shares allotted ||Total Amount paid (Rs) ||Total Amount outstanding on calls |
|1 SamalaSubba Reddy ||600000 ||2640000 ||0 |
|2 SamalaPrabhavathi ||600000 ||2640000 ||0 |
|3 PinnelliAnantaramamma ||450000 ||1980000 ||0 |
|4 MallavarapuJayarami Reddy ||600000 ||2640000 ||0 |
xv. The Company has not entered into non-cash transactions with its directors orpersons connected with him. Accordingly the provisions of clause 3(xv) of the Order arenot applicable to the Company.
xvi. The Company is not required to be registered under section 45-IA of The ReserveBank of India Act 1934. Accordingly the provisions of clause 3(xvi) of the order are notapplicable to the Company.
Annexure B to the Independent Auditor's Report
Report on the Internal Financial Controls under clause (i) of the Sub-section 3 of theSection 143 of the Companies Act 2013 (The Act')
We have audited the internal financial controls over financial reporting of M/s.CYBERMATEINFOTEK LIMITED(the Company') as of March 31 2019 in conjunction with our auditof Standalone Ind AS 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 (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating eecti vely for ensuring the orderly and ecient conduct of itsbusiness including adherence to 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 Act.
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 prescribed under section143(10) of the Act to the extent applicable to an Audit of Internal Financial Controlsboth applicable to an audit of Internal Financial Controls and both issued by the ICAI.These Standards and 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 eecti vely 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 risk of martialmisstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sucient and appropriate toprovide a basis for our audit opinion on the Company's internal financial control systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes these policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reHect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of Standalone Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the Company's assets that could have a material effect on the StandaloneInd AS financial statements.
Inherent Limitation of Internal Financial Controls over Financial Reporting
Because of the inherent limitation 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 deducted.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 eecti vely as at March 31 2019 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute Of CharteredAccountants of India.
| ||For P.Murali& Co |
| ||Chartered Accountants |
| ||Firm Registration No: 007257S. |
| ||P. Murali Mohana Rao |
| ||Partner |
| ||M.No:023412 |
|Place: Hyderabad || |
|Date: 27-05-2019 || |