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Palsoft Infosystems Ltd.

BSE: 511597 Sector: IT
NSE: N.A. ISIN Code: INE969B01016
BSE 00:00 | 26 Apr 8.50 -0.05
(-0.58%)
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NSE 05:30 | 01 Jan Palsoft Infosystems Ltd
OPEN 8.50
PREVIOUS CLOSE 8.55
VOLUME 1
52-Week high 10.25
52-Week low 8.50
P/E
Mkt Cap.(Rs cr) 3
Buy Price 0.00
Buy Qty 0.00
Sell Price 8.50
Sell Qty 99.00
OPEN 8.50
CLOSE 8.55
VOLUME 1
52-Week high 10.25
52-Week low 8.50
P/E
Mkt Cap.(Rs cr) 3
Buy Price 0.00
Buy Qty 0.00
Sell Price 8.50
Sell Qty 99.00

Palsoft Infosystems Ltd. (PALSOFTINFOSYS) - Auditors Report

Company auditors report

Report on the IND AS Financial Statements

To the Members of Palsoft Infosystems Limited

We have audited the accompanying financial statements of PALSOFT INFOSYSTEMS LIMITED("the Company") which comprise the Balance Sheet as at 31 March 2018 theStatement of Profit and Loss including the statement of Other Comprehensive Income theCash Flow Statement and the Statement of Changes in Equity for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese Ind AS financial statements that give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the Company in accordance with accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act. read with Rule 7 of the Companies (Accounts) Rules 2014 and 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 adequateinternal financial control that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these IND

AS financial statements based on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under. We conducted our audit of the IND ASfinancial statements in accordance with the Standards on Auditing issued by the Instituteof Chartered Accountants of India specified under Section143(10) of the Act. ThoseStandards require that we comply with ethical requirements and plan and perform the auditto obtain reasonable assurance about whether the financial statements are free frommaterial misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the Ind ASfinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of theInd AS financial statements that give a true and fair view in order to design auditprocedures that are appropriate in the circumstances. An audit also includes evaluatingthe appropriateness of accounting policies used and the reasonableness of the accountingestimates made by the Company's Directors as well as evaluating the overall presentationof the Ind AS financial statements. We believe that the audit evidence we have obtained issufficient and appropriate to provide a basis for our audit opinion on the Ind ASfinancial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the IND AS financial statements gives the information required by the Act inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India including the Ind AS of the financial position ofthe Company as at 31st March 2018 and its financial performance including othercomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

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. 2202600.00 during current year(previous year Rs. 2079897)for the development of software however management is notexpecting future economic benefit against such cost. The same has been written off duringthe year. Refer Note no. 2.18 in Notes to the Balance Sheet.

b. The Financial Statements indicate that the Company has accumulated losses of Rs.45963890 and its net worth has been fully/ substantially eroded the Company hasincurred a loss of Rs. 413331 and cumulative net cash loss of Rs. 3551607 has beencarried forward and the Company's current liabilities exceed by Rs.12394597 over itscurrent assets as at the date of Balance Sheet. These conditions indicate the existence ofa material uncertainty that may cast significant doubt about the company's ability tocontinue as a going concern. However the financial statements of the company have beenprepared 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. 2.15 to Financial Statements.The liability of interest and penalty thereupon is not ascertainable.

Our Opinion is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' 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-A a statement on the matters specified in paragraphs 3and 4 of the order to the extent applicable.

2. As required by Section 143 (3) of the Act we report that: (a) We have soughtand obtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit. (b) In our opinion properbooks of accounts as required by Law have been kept by the Company so far as it appearsfrom our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss including the Statement ofother comprehensive income the Cash Flow Statement and the statement of changes in equitydealt with by this Report are in agreement with the books of account; (d) In our opinionthe aforesaid IND AS financial statements comply with the Accounting Standards specifiedunder Section 133 of the Act read with relevant rules issued there under; (e) On thebasis of the written representations received from the directors as on 31st March 2018taken on record by the Board of Directors none of the directors is disqualified as on31st March 2018 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 Compan y an d t he opera ting effectiveness of such controls refer toour separate report in "Annexure B"; and (g) With respect to the other mattersto be included in the Auditor's Report in accordance with Rule 11 of the Companies (Auditand Auditors) Rules 2014 in our opinion and to the best of our information and accordingto the explanations given to us: a) The Company has disclosed the impact of pendinglitigations on its financial position in its IND AS financial statements. However nodetails are made available to us regarding reasons for non-payment of sales tax/ VATdemand of Rs. 25.62 lacs (Refer Note no. 2.15 to Balance Sheet) and sales taxdemand paid under dispute for Rs. 5 lacs (Refer Note no. 2.9 to Balance Sheet). Thecompany has not determined the liability towards interest and penalty which may occur infuture. b) The Company did not have any long- term contracts including derivativecontracts for which there were any material foreseeable losses. c) There are no amountswhich are required to be transferred to the Investor Education and Protection Fund by theCompany.

FOR H.S. DARDA& CO.
CHARTERED ACCOUNTANTS
FRN: 000889C
Sd/-
RAJNEESH SINGHVI
Place:Jaipur PARTNER
Date: May 25 2018 M. No. 073506

ANNEXURE A TO AUDITORS' REPORT

Annexure referred to in our Independent Auditors' Report to the members of the PALSOFT

INFOSYSTEMS LIMITED on the financial statements for the year ended 31st March2018.

(i) (a) The Company has generally maintained proper records showing full particularsincluding quantitative details and situation of fixed assets. The management hasdetermined that all the assets have been impaired due to obsolescence and wear and tear.Accordingly impairment loss has been accounted for.

(b) The company has a regular system of physical verification of its fixed assets.However the assets have been identified to be impaired during the year so the physicalverification of such assets is not 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 paragraph 3 (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 underSection 189 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 have 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. 3174914 has been writtenback.

(c) An amount of Rs. 16545164 is due from the parties covered in register maintainedunder Section 189 of the Companies Act 2013. Provision has been created in the accountsfor 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 public within the meaning ofSections 73 to 76 of the Companies Act 2013 and the rules made there under. Thus clause(v) of the Order is not applicable.

(vi) Having regard to the nature of the Company's operation clause (vi) of Order isnot 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's stateinsurance income tax and any other statutory dues have been regularly deposited duringthe year by the Company with the appropriate authorities except in case of Sales Tax andSurcharge on Sales Tax amounting to Rs. 2562228/-.

(b)According to the information and explanations given to us regarding reason fornon-payment of such dues there are no dues of income tax or sales tax or wealth tax orservice tax or duty of custom or duty of excise or value added tax or cess which have notbeen deposited on account of any dispute except as reported in Financial Statements.Further the company has paid Rs. 5 lacs and disclosed it as Sales Tax demand underdispute (Refer to Note no. 2.9). No further details are made available to us andaccordingly we are not able to assess the quantum of any unpaid disputed dues in thisregard.

(viii) In our opinion and according to the information and explanations given to usthe company 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 notapplicable to 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 the transactions with therelated parties wherever applicable. Details of the transactions with the related partieshave been disclosed in the financial statements as required by the applicable accountingstandards.

(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 Companies Act 2013.

(xvi) The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly provision of clause 3(xvi) of the Order is notapplicable to the Company.

FOR H.S. DARDA& CO.
CHARTERED ACCOUNTANTS
FRN: 000889C
Sd/-
RAJNEESH SINGHVI
Place:Jaipur PARTNER
Date: May 25 2018 M. No. 073506

Annexure - B to the Auditors' Report on the Internal Financial Controls under Clause(i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of PalsoftInfosystems Limited ("the Company") as of 31st March 2018 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon 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 effectively for ensuring the orderly and efficient 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 Companies Act 2013.

Auditors' Responsibility

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 theStandards on Auditing issued by ICAI and deemed to be prescribed under section 143(10) ofthe Companies Act 2013 to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal Financial Controls and 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 was established and maintained and if such controls operated effectively in allmaterial 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 controls 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 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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

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.

Opinion

In our opinion opinion considering nature of business of simple activity size ofoperation lesser complexity of the transactions the Company has in all materialrespects an adequate internal financial controls system over financial reporting and suchinternal financial controls over financial reporting were operating effectively as at 31stMarch 2018 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 by the Institute of Chartered Accountants of India.

FOR H.S. DARDA& CO.
CHARTERED ACCOUNTANTS
FRN: 000889C
Sd/-
RAJNEESH SINGHVI
Place:Jaipur PARTNER
Date: May 25 2018 M. No. 073506