Palsoft Infosystems Ltd.
|BSE: 511597||Sector: IT|
|NSE: N.A.||ISIN Code: INE969B01016|
|BSE 00:00 | 28 Feb||Palsoft Infosystems Ltd|
|NSE 05:30 | 01 Jan||Palsoft Infosystems Ltd|
|BSE: 511597||Sector: IT|
|NSE: N.A.||ISIN Code: INE969B01016|
|BSE 00:00 | 28 Feb||Palsoft Infosystems Ltd|
|NSE 05:30 | 01 Jan||Palsoft Infosystems Ltd|
To the Members of Palsoft Infosystems Limited Report on the Audit of the Ind ASFinancial Statements
We have audited the accompanying Ind AS financial statements of PALSOFT INFOSYSTEMSLIMITED ("the Company") which comprise the Balance sheet asat March 31 2019 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the statement of Changes in Equity forthe 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 the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Companies Act 2013 as amended ("the Act") in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2019 its loss including other comprehensive income its cash flows and the changes inequity for the year ended on that date.
Basis for Opinion
We conducted our audit of the Ind AS 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 theAudit of the Standalone Ind AS Financial Statements' sectionof our report. We are independent of the Company in accordance with the Codeof Ethics' issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the financial statements underthe provisions of the Act and the Rules thereunder 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 audit opinion on the IndAS financial statements.
Emphasis of Matters
We draw attention to the following matter in the Notes to the financial statements: a.The company has incurred employee cost of Rs. 2359200 during current year (previous yearRs. 2202600) for the development of software however management is not expectingfuture economic benefit against such cost. The same has been written off during the year.Refer Note no. 2.17 in Notes to the Balance Sheet.
b. The Financial Statements indicate that the Company has accumulated losses of Rs.45998097 and its net worth has been fully eroded the Company has incurred a loss of Rs.34207 (including other comprehensive income) and cumulative net cash loss of Rs.2998915 has been carried forward and the Company's current liabilities exceed byRs.12498956 over its current assets as at the date of Balance Sheet. These conditionsindicate the existence of a material uncertainty that may cast significant doubt about thecompany's ability to continue as a going concern. However the financial statementsof the company have been prepared on going concern basis.
c. The Company has pending statutory liability of sales tax demand of Rs. 2562228persisting for a long time as referred in Note no. 2.13 to Financial Statements. Theliability of interest and penalty thereupon is not ascertainable.
Our Opinion is not modified in respect of these matters.
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements for the financial year endedMarch 31 2019. These matters were addressed in the context of our audit of the Ind ASfinancial statements as a whole and in forming our opinion thereon and we do not providea separate opinion on these matters. For each matter below our description of how ouraudit addressed the matter is provided in that context. We have determined the mattersdescribed below to be the key audit matters to be communicated in our report. We havefulfilled the responsibilities described in the Auditor's responsibilities for theaudit of the Ind AS financial statements section of our report including in relation tothese matters. Accordingly our audit included the performance of procedures designed torespond to our assessment of the risks of material misstatement of the Ind AS financialstatements. The results of our audit procedures including the procedures performed toaddress the matters below provide the basis for our audit opinion on the accompanyingIndAS financial statements.
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Annual report 2018-19 butdoes not include 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 and wedo not express any form of assurance conclusion thereon. In connection with our audit ofthe Ind AS financial statements our responsibility is to read the other information andin doing so consider whether such other information is materially inconsistent with theInd AS financial statements or our knowledge obtained in the audit or otherwise appears tobe materially misstated. If based on the work we have performed we conclude that thereis a material misstatement of this other information we are required to report that fact.We have nothing to report in this regard.
Responsibilities of Management for the Standalone IndAS Financial Statements
The Company's Board of Directors is responsible for the matters stated insection 134(5) of the Act with respect to the preparation of these Ind AS financialstatements that give a true and fair view of the financial position financial performanceincludingother comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principlesgenerally 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 alsoincludes maintenance of adequateaccounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventingand detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments andestimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controlsthat were operatingeffectively for ensuring the accuracy and completeness of the accounting records relevantto the preparation and presentation of the IndAS financial statements that give a true andfair view and are free from material misstatementwhether due to fraud or error.
In preparing the Ind AS financial statements management is responsible for assessingthe Company's ability to continueas 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. Those Board of Directors are also responsible foroverseeing the Company's financial reporting process.
Auditor's Responsibilities for the Audit of the Standalone IndAS 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. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these IndAS 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 Ind ASfinancial 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 orderto 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 thereasonableness of accounting estimates and related disclosures made by management.
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 theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events orconditions may cause the Company to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the Ind ASfinancial statements including the disclosures and whether the Ind AS 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 Ind AS financial statements forthe financial year ended March 31 2019 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 (Auditors' Report) Order 2016("theorder") issued by the Central Government of India in terms of Sub-Section (11)of Section143 of the Act we give in the Annexure-A a statement on the matters specifiedin paragraphs 3 and 4 of the order to the extent applicable.
2. As required by Section 143 (3) of the Act we reportthat:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief werenecessary for the purposes of our audit.
(b) In our opinion proper books of accounts as required by Law have been kept by theCompany so far as it appears fromour examination of those books;
(c) TheBalanceSheet the Statement of Profit and Lossincluding the Statement of othercomprehensive income the Cash Flow Statement and the statement of changes in equity dealtwith by this Report are in agreement with the books of account;
(d) In our opinion the aforesaid 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 the written representations received from the directors as on 31stMarch 2019 taken on record by the Board Directors none of the directors is disqualifiedas on 31st March 2019 from being appointed as a director in terms of Section 164 (2) ofthe Act;
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company with reference to these Ind AS financial statements and theoperating effectiveness of such controls refer to our separate report in "AnnexureB";
(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 in our opinionand to the best of our information and according to the explanations given to us:
a) The Company has disclosed the impact of pending litigations on its financialposition in its IND AS financial statements. However no details are made available to usregarding reasons for non-paymentof sales tax/ VAT demand of Rs. 25.62 lacs (Refer Noteno. 2.13 to Balance Sheet) and sales tax demand paid under dispute for Rs. 5 lacs (ReferNote no. 2.7 to Balance Sheet).The company has not determined the liability towardsinterest and penalty which may occur in future.
b) The Company did not have any long- term contracts including derivative contracts forwhich there were any material foreseeable losses.
c) There are no amounts which are required to be transferred to the InvestorEducation and Protection Fund by the Company.
(h) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to the explanationsgiven to us no managerial remuneration has been paid by the Company to its directorsduring the year.
ANNEXURE A TO THE INDEPENDENT AUDITORS' REPORT
Annexure referred to in our Independent Auditors' Report to the members of the PALSOFTINFOSYSTEMS LIMITED on the financial statements for the year ended 31st March 2019.
(i) (a) The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of fixed assets.
All the assets have been impaired due to obsolescence and wear and tear andaccordingly impairment loss had been accounted for in earlier years.
(b) The company has a regular system of physical verification of its fixed assets.However as the assets have been impaired so the physical verification of such assets isnot required.
(c) The company does not have any immovable property. Thus paragraph 3(i) (c) of theOrder is not applicable.
(ii) There was no inventory at the year-end. Thus paragraph3(ii) of the Order is notapplicable.
(iii) The company has not granted any loans secured or unsecured to any companiesfirms limited liability partnership or other parties covered in register maintained underSection189 of the Companies Act 2013 during the current financial year. In respect ofadvances given in earlier years to the related parties and others necessary provisionsfor non-recovery of the loans and advances had been created.
(a) The terms and conditions of the grant of such loans are not prejudicial to thecompany's interest.
(b) There has been no recovery during the year towards principal and interest in mostof the cases except one concern the provision whereof for Rs. 2966098 has been writtenback upon actual recovery.
(c) An amount of Rs. 11283413 is due from the parties covered in register maintainedunder Section 189 of the Companies Act 2013.
Provision has been created in the accounts for the same amount.
(iv) In our opinion and according to the information and explanations given to us thecompany has not granted any loans or given any guarantee and security covered undersection 185 and 186 of the Companies Act 2013 during the year. Thus the clause 3(iv) ofthe Order is not applicable.
(v) The company has not accepted deposits from the p u b l i c w i t h i n t h e m e an i n g o f Sections73to76oftheCompanies Act 2013 and the rules made there under. Thusclause (v) of the Order is not applicable.
(vi) Having regard to the nature of the Company's operation clause (vi) ofOrder is not applicable relating to maintenance of cost records.
(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employee'sstate insurance income tax and any other statutory dues have been regularly depositedduring the year by the Company with the appropriate authorities except in case of SalesTax and Surcharge on Sales Tax amounting to Rs. 2562228.
(b) According to theinformationand explanations given to us regarding reason fornon-payment of such dues there are no dues of income tax or sales tax orwealth tax orservice tax or duty of custom or duty of excise or value added tax or cess which have notbeen deposited on account of anydispute except as reported in FinancialStatements.Further the company has paid Rs. 5 lacs and disclosed it as Sales Tax demandunder dispute (Refer to Note no. 2.7).
No further details are made available to us and accordingly we are not able to assessthe quantum of any unpaid disputed dues in this regard.
(viii) In our opinion and according to the informationandexplanationsgiventous thecompany has not taken any loans or borrowings from a financial institution bankGovernment or dues to debenture holders. Thus paragraph 3(viii) of the order is notapplicable.
(ix) The company has not raised any money by way of initial public offer or furtherpublic offer during the year. Thus clause 3(ix) of the order is not applicable to thecompany.
(x) According to the information and explanations given to us and as represented by theManagement and based on our examination of the books and records of the Company and inaccordance with generally accepted auditing practices in India we have been informed thatno case of fraud has been committed by the Company or on the Company by its officers andemployees during the year.
(xi) The company has not paid any managerial remuneration; accordingly this clause isnot applicable.
(xii) The provisions of clause 3(xii) of the Order for Nidhi Company are not applicableto the company.
(xiii) According to the information and explanation given to us and based onexamination of our records of the Company the Company has complied with the provisions ofSection 177 and 188 of the Companies 2013 with respect to thetransactions with therelated parties wherever applicable.
Details of the transactions with the related parties have been disclosed in thefinancial statements as required by the applicable accounting standards.
(xiv) The Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year under review.Accordingly provisions of clause 3(xiv) of the Order are not applicable to the Company.
(xv) The Company has not entered into any non-cash transactions with the directors orpersons connected with him as covered under section 192 of the CompaniesAct 2013.
(xvi) The Company is not required to be registered under Section 45-IA of theReserveBank of India
Act 1934. Accordingly provision of clause 3(xvi) of the Order is not applicable tothe Company.
ANNEXURE B TO THE INDEPENDENT AUDITORS' REPORT
We have audited the internal financial controls over financial reporting of PalsoftInfosystems Limited ("the Company") as of 31 March 2019inconjunction with our audit of the Ind AS financial statements of the Company for the yearended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the CompaniesAct 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued byICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 to theextent applicable to an audit of internal financial controls both applicable to an auditof Internal Financial Controls and both issued by the Institute of Chartered Accountantsof India. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controlssystem over 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 those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting WithReference to these Standalone Financial Statements
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion considering nature of business of simple activity size of operationlesser complexity of the transactions the Company has in all material respects anadequate internal financial controls system over financial reporting with reference tothese standalone financial statements and such internal financial controls over financialreporting with reference to these standalone financial statements were operatingeffectively as at 31 March 2019 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of CharteredAccountants of India.