You are here » Home » Companies » Company Overview » Rolta India Ltd

Rolta India Ltd.

BSE: 500366 Sector: IT
NSE: ROLTA ISIN Code: INE293A01013
BSE 00:00 | 12 May 4.95 -0.21
(-4.07%)
OPEN

5.25

HIGH

5.36

LOW

4.89

NSE 00:00 | 12 May 4.95 -0.20
(-3.88%)
OPEN

5.25

HIGH

5.35

LOW

4.90

OPEN 5.25
PREVIOUS CLOSE 5.16
VOLUME 509868
52-Week high 7.72
52-Week low 3.19
P/E
Mkt Cap.(Rs cr) 82
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 5.25
CLOSE 5.16
VOLUME 509868
52-Week high 7.72
52-Week low 3.19
P/E
Mkt Cap.(Rs cr) 82
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Rolta India Ltd. (ROLTA) - Auditors Report

Company auditors report

on the Abridged Standalone Financial Statements

To the

Members of Rolta India Limited

1. Introduction

The accompanying abridged standalone financial statements whichcomprise the abridged Balance Sheet as at March 31 2020 the abridged Statement of Profitand Loss (including Other Comprehensive Income) the abridged Statement of Changes inEquity and the abridged Statement of Cash Flows for the year then ended and relatednotes are derived from the audited standalone financial statements of Rolta India Limited("the Company") for the year ended March 31 2020. We had expressed a qualifiedaudit opinion on those standalone financial statements in our report dated July 15 2020.The audited standalone financial statements and the abridged standalone financialstatements do not reflect the effects of events that occurred subsequent to the date ofour report dated July 15 2020 on the audited standalone financial statements.

The abridged standalone financial statements do not contain all thedisclosures required by the accounting principles generally accepted in India includingthe Indian Accounting Standards specified under Section 133 of the Companies Act 2013("the Act") read with the Companies (Indian Accounting Standards) Rules 2015as amended ("Ind AS") applied in the preparation of the audited standalonefinancial statements of the Company. Reading the abridged standalone financial statementstherefore is not a substitute for reading the audited standalone financial statements ofthe Company.

2. Management's Responsibility for the Abridged Standalone FinancialStatements

The Company's Board of Directors is responsible for the preparation ofa summary of the audited standalone financial statements in accordance with section 136(1)of the Act read with rule 10 of the Companies (Accounts) Rules 2014 (as amended) andwhich are derived from the audited standalone financial statements for the year endedMarch 31 2020 prepared in accordance with the accounting principles generally acceptedin India including the Indian Accounting Standards specified under Section 133 of theAct read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS").

3. Auditor's Responsibility

Our responsibility is to express an opinion on the abridged standalonefinancial statements based on our procedures which were conducted in accordance withStandard on Auditing (SA) 810 "Engagements to Report on Summary FinancialStatements" issued by the Institute of Chartered Accountants of India.

4. Basis for Qualified Opinion

a. The Company at the time of its transition to Ind AS effective April1 2015 had opted for and adopted the revaluation model for its land and buildings inaccordance with Ind AS 16 — Property Plant & Equipment. As per Para 34 of Ind AS16 the Company ought to have as at March 31 2020 carried out a revaluation of the landand buildings that it had revalued at the time of transition to Ind AS. The Management hasrepresented that due to the continuing COVID-19 lockdown it has not been able to get therevaluation done. Consequently we are unable to ascertain the impact on the abridgedstandalone financial statements for the year ended March 31 2020 on account of therevaluation not having been carried out (refer note no. 20 to the abridged standalonefinancial statements).

b. In February 2020 Tower C which is situated in the same complex asthe Corporate Office caught fire causing substantial damage to the building and theassets housed therein (refer note no. 21 to the abridged standalone financial statements).

We are informed that due to the continuing COVID-19 lockdown situationexcept for the police panchanama no further progress has taken place for assessment of theextent of damage (repairs v/s reconstruction of Tower C) and that the insurance companyhas also deferred the survey of the property. The written down value of Tower C as onMarch 312020 is '162.59 crores which comprises of the historical cost component of'12.69 crores and revalued component of '149.90 crores. Since it has not been possible toassess the extent of damage to Tower C the Company has continued to retain its writtendown value of '162.59 crores under the head Buildings. As such we are presently unable toascertain the extent to which the value of Tower C ought to have been written down in thebooks.

c. The Company has provided for managerial remuneration in excess ofthe limit prescribed under section 197(16) read with Schedule V to the Companies Act 2013by ' 0.94 crores. The same is subject to regularisation by way of approval of theshareholders at the ensuing Annual General Meeting (refer note no. 11 to the abridgedstandalone financial statements).

5. Qualified Opinion

In our opinion the abridged standalone financial statements derivedfrom the audited standalone financial statements of the Company as at and for the yearended March 31 2020 except for the possible effects of the matters stated in para 4above are a fair summary of the audited standalone financial statements in accordancewith section 136(1) of the Act read with rule 10 of the Companies (Accounts) Rules 2014(as amended).

6. Material Uncertainty Related to Going Concern

The Company has incurred a net loss of ' 740.64 crores during the yearended March 31 2020. While the continuing liquidity crunch proceedings initiated againstthe Company in NCLT and the significant fall in revenues coupled with the continuingCOVID-19 lockdown indicate that presently a material uncertainty exists that may castsignificant doubt on the Company's ability to continue as a going concern the managementof the Company has represented that with the Restructuring Services Agreement (RSA)entered into with the Streamcast Group continuing to be effective and the StreamcastGroup continuing to work on the implementation of the RSA the Company continues to be agoing concern (refer note no.19 to the abridged standalone financial statements).

Our opinion is not modified in respect of this matter.

7. Emphasis of Matter

We draw attention to the following:

a. During the year ended March 31 2020 the Company has incurred abusiness loss of ' 740.64 crores on which it has recognized an incremental Deferred TaxAsset of ' 143.11 crores. The net Deferred Tax Asset attributable to unabsorbed businessloss as at March 31 2020 recognized by the Company amounts to ' 701.68 crores (refer noteno. 13c of the abridged standalone financial statements). The Management of the Company isof the view that for the reasons mentioned in the aforesaid note the Company will be ableto generate taxable profits in the future for setting off the accumulated business losses.

b. The Management of the Company has represented that in respect oflong outstanding amounts aggregating ' 274.8 3 crores receivable from a Governmentdepartment the process towards recovering the said amount continues to be at an advancedstage (refer note no.23 of the abridged standalone financial statements).

c. We draw attention to note no. 24 to the abridged standalonefinancial statements as regards the Management's evaluation of the extent to whichCOVID-19 pandemic will impact the performance of the Company dependent on the futuredevelopments which are highly uncertain.

Our opinion on the abridged standalone financial statements is notmodified in respect of the above matters.

For N.M. Raiji & Co.
Chartered Accountants
Firm Registration No.: 108296W

 

Vinay D. Balse
Partner
Place: Mumbai Membership No.: 039434
Date: November 18 2020 UDIN: 20039434AAAAGR3 732

Independent Auditors' Report

To the

Members of Rolta India Limited

Report on the Audit of Standalone Financial Statements QualifiedOpinion

We have audited the standalone financial statements of Rolta IndiaLimited ("the Company") which comprise the Balance Sheet as at March 312020the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of the significant accounting policies and other explanatory information(hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to theexplanations given to us except for the possible effects of the matters described in the Basisfor Qualified Opinion section of our report the aforesaid standalone financialstatements give the information required by the Companies Act 2013 ('the Act') in themanner so required and give a true and fair view in conformity with the Indian AccountingStandards prescribed under Section 133 of the Act read with the Companies (IndianAccounting Standards) Rules 2015 as amended ("Ind AS") and other accountingprinciples generally accepted in India of the state of affairs of the Company as at March31 2020 the loss and total comprehensive income changes in equity and its cash flowsfor the year ended on that date.

Basis for Qualified Opinion

a) The Company at the time of its transition to Ind AS effective April1 2015 had opted for and adopted the revaluation model for its land and buildings inaccordance with Ind AS 16 - Property Plant & Equipment. As per Para 34 of Ind AS 16the Company ought to have as at March 31 2020 carried out a revaluation of the land andbuildings that it had revalued at the time of transition to Ind AS. The Management hasrepresented that due to the continuing COVID-19 lockdown it has not been able to get therevaluation done. Consequently we are unable to ascertain the impact on the financialstatements for the year ended March 31 2020 on account of the revaluation not havingbeen carried out (refer note no. 43 to the standalone financial statements).

b) In February 2020 Tower C which is situated in the same complex asthe Corporate Office caught fire causing substantial damage to the building and theassets housed therein (refer note no. 44 to the standalone financial statements). We areinformed that due to the continuing COVID-19 lockdown situation except for the policepanchanama no further progress has taken place for assessment of the extent of damage(repairs v/s reconstruction of Tower C) and that the insurance company has also deferredthe survey of the property. The written down value of Tower C as on March 31 2020 is '162.59 crores which comprises of the historical cost component of ' 12.69 crores andrevalued component of ' 149.90 crores. Since it has not been possible to assess the extentof damage to Tower C the Company has continued to retain its written down value of '162.59 crores under the head Buildings. As such we are presently unable to ascertain theextent to which the value of Tower C ought to have been written down in the books.

c) The Company has provided for managerial remuneration in excess ofthe limit prescribed under section 197(16) read with Schedule V to the Companies Act 2013by ' 0.94crores. The same is subject to regularisation by way of approval of theshareholders at the ensuing Annual General Meeting (refer note no. 26 to the standalonefinancial statements).

We conducted our audit of the standalone financial statements inaccordance with the Standards on Auditing (SAs) specified under section 143(10) of theCompanies Act 2013. Our responsibilities under those standards are

further described in the Auditors Responsibilities for the Audit ofthe Standalone Financial Statements section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI) together with the ethical requirements that are relevant toour audit of the standalone financial statements under the provisions of the CompaniesAct 2013 and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our qualified opinion on the standalone financial statements.

Material Uncertainty Related to Going Concern

We draw attention to note no. 42 to the standalone financial statementswhich indicates that the Company has incurred a net loss of ' 740.64 crores for the yearended March 31 2020. While the continuing liquidity crunch proceedings initiated againstthe Company in NCLT and the significant fall in revenues coupled with the continuingCOVID-19 lockdown indicate that presently a material uncertainty exists that may castsignificant doubt on the Company's ability to continue as a going concern the managementof the Company has represented that with the Restructuring Services Agreement (RSA)entered into with the Streamcast Group continuing to be effective and the StreamcastGroup continuing to work on the implementation of the RSA the Company continues to be agoing concern.

Our opinion is not modified in respect of this matter.

Emphasis of Matter

We draw attention to the following:

(i) We draw attention to note no. 30c to the standalone financialstatements as per which during the year ended March 31 2020 the Company has incurred abusiness loss of ' 740.64 crores on which it has recognized an incremental Deferred TaxAsset of ' 143.11 crores. The net Deferred Tax Asset attributable to unabsorbed businessloss as at March 31 2020 recognized by the Company amounts to ' 701.68 crores. TheManagement of the Company is of the view that for the reasons mentioned in the said note30c the Company will be able to generate taxable profits in the future for setting offthe accumulated business losses.

(ii) We draw attention to note no. 46 to the standalone financialstatements in which the Management of the Company has represented that in respect of longoutstanding amounts aggregating ' 274.83 crores receivable from a Government departmentthe process towards recovering the said amount continues to be at an advanced stage.

(iii) We draw attention to note no. 47 to the standalone financialstatements as regards the Management's evaluation of the extent to which COVID-19pandemic will impact the performance of the Company dependent on the future developmentswhich are highly uncertain.

Our opinion on the standalone financial statements is not modified inrespect of the above matters.

Key Audit Matters

Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the standalone financial statementsof the current period. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. In addition to the matters described inthe Basis for Qualified Opinion section we have determined the matters describedbelow to be the key audit matters to be communicated in our report.

Sr. N0 Key Audit Matter Auditor's Response
1 Accuracy of booking of revenues in respect of fixed price ongoing contracts involving critical estimates Principal Audit Procedures
Our audit approach was a combination of test of internal controls and substantive procedures which included the following:
Estimate of effort is a critical estimate to determine revenues in case of ongoing contracts. This estimate has a high inherent uncertainty as it requires consideration of progress of the contract efforts incurred till date and efforts required to complete the remaining contract performance obligations.
• Evaluating the design of internal controls relating to recording of efforts incurred and estimation of efforts required to complete the performance obligations
• Testing the access and application controls pertaining to time recording allocation and budgeting systems which prevents unauthorised changes to recording of efforts incurred
Refer note no. 2(b) to the standalone financial statements
• Selecting a sample of contracts and thorough inspection of evidence of performance of these controls testing the operating effectiveness of the internal controls relating to efforts incurred and estimated
• Selecting a sample of contracts and performing a retrospective review of efforts incurred with estimated efforts so as to identify significant variations and verify whether those variations have been considered in estimating the remaining efforts to complete the contract
• Reviewing a sample of contracts with unbilled revenues to identify possible delays in achieving milestones which require change in estimated efforts to complete the remaining performance obligations and
• Performing analytical procedures and testing details for reasonableness of incurred and estimated efforts.
2 Non repayment of principal and interest due thereon in respect of borrowings Principal Audit Procedures
Non repayment of borrowings is one of the events/ conditions that may cast significant doubt on a Company's ability to continue as a going concern. We obtained details of principal and interest due thereon to various banks as at March 31 2020 from the Management and confirmed the accuracy of the amounts outstanding/ payable to various banks against each of the facilities with reference to the balance confirmation certificates procured from the respective banks.
The Company has defaulted in repayment of principal and interest due thereon aggregating ' 2562.88 crores in respect of Secured Borrowings and Working Capital Term Loans taken from various banks.
Further the Company also owes '1745.39 crores to various banks on account of devolvement of Letter of Credit as also invocation of Stand By Letters of Credit and Bank Guarantees.
Refer note no. 18 to the standalone financial statements
3 Non-payment of statutory dues Principal Audit Procedures
During the year the Company has defaulted in depositing statutory dues with various authorities. As at March 31 2020 the Company has not deposited the following statutory dues with the respective authorities: Obtained details including ageing of various statutory dues payable by the Company to various authorities as at March 31 2020 from the Management.
a) Tax Deducted at Source—' 24.57 crores. Confirmed the accuracy of the statutory dues payable as at March 31 2020 to various authorities from the relevant documents challans and ledger accounts maintained by the Company for each of the said dues.
b) Provident Fund (including Pension) — ' 3.99 crores
c) Profession Tax — ' 0.22 crores
d) ESIC - Rs 0.04 crores
e) Sales tax and Service tax — ' 3.36
4 Write off of receivables Principal Audit Procedures
The Company has during the year ended March 31 2020 written off an amount of ' 77.99 crores being receivable on account of certain unbilled receivables pertaining to work done on various projects. The said amount has been disclosed as a part of the 'Exceptional Item' in the standalone financial statements. Obtained details including ageing of unbilled receivables which the Company has written off to test the recoverability of these receivables. These unbilled amounts are on account of work done and delivered to the respective customers but for which acceptance/ clearance has not been provided by the customers and hence have been considered as bad and therefore written off.
Refer note no. 29 to the standalone financial statements.
5 Reversal of Inter Company balance adjustments which were made in the F.Y. 2018-19 Principal Audit Procedures
Obtained from the management the details of the reversals made by the company during the year ended March 31 2020 along with the inter-company balance confirmations after considering the effect of such reversal entries.
The Company has during the year ended March 31 2020 reversed the entries passed during the year ended March 31 2019 adjusting the amount receivable from subsidiaries for non-export transactions against the export advance received from such subsidiaries. These adjustments were in our opinion in violation of the provisions of the FEMA Act 1999. The reversal of such entries has resulted in the company accounting a foreign exchange gain of ' 122.75 crores during the year ended March 31 2020. The said amount has been disclosed as a part of the 'Exceptional Item' in the standalone financial statements.
Confirmed the accuracy of such reversals with the entries passed in the books during the year ended March 31 2019.
Refer note no. 29 & 41 to the standalone financial statements
6 Non-revaluation of land and building in accordance with Ind AS 16 — Property Plant and Equipment Refer to the comments in para (a) of the "Basis for Qualified Opinion" section of the report.
7 Fire in a Building situated in the same complex as the Corporate Office Refer to the comments in para (b) of the "Basisfor Qualified Opinion" section of the report.
8 Managerial remuneration in excess of the limit prescribed under section 197(16) read with Schedule V to the Companies Act 2013 by ' 0.94 crores Refer to the comments in para (c) of the "Basisfor Qualified Opinion" section of the
9 Material uncertainty related to going concern Refer to the comments in the "Materia! Uncertainty Related to Going Concern" section of the report.
10 Creation of Deferred Tax Asset Principal Audit Procedures
Though the Company has during the year incurred a business loss of ' 740.64 crores it has recognized an incremental Deferred Tax Asset of ' 143.11 crores during the year ended March 31 2020. The net Deferred Tax Asset attributable to unabsorbed business loss as at March 31 2020 recognized by the Company amounts to ' 701.68 crores. Since the Company has recognized Deferred Tax Asset based on financial projections our audit procedures comprised of the following:
• verifying the financial projections prepared by the management which have also been approved by the Board of Directors vis-avis the revenue expected to be generated from orders presently on hand and orders which the management has represented are expected to be received and wherein negotiations are at an advanced stage
Refer note no. 30c to the standalone financial statements
• analyzing the cost estimate made by the management to generate the aforesaid revenue and
• analyzing the profit the company will be able to generate basis the revenue projections and cost estimates mentioned above for setting off the carry forward business losses.
11 Unbilled receivables Principal Audit Procedures
The unbilled receivables of the Company as at March 31 2020 include an amount of ' 274.83 crores receivable from a Government department since 2010 against work carried out pending renewal of the AMC contract. However as represented to us the clearance of the dues has reached a very advanced stage. We verified details of amount receivable by the Company from the Government department basis the entries in the books of account. We also verified the subsequent correspondence between the Company and the said Government department to corroborate the Company's claim that the said amount is good and recoverable.
Refer note no. 46 to the standalone financial statements

Information Other than the Standalone Financial Statements andAuditor'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 Shareholder's Information etc. but does notinclude the standalone financial statements and our auditor's report thereon.

Our qualified opinion on the standalone financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

If based on the work we have performed we conclude that there is amaterial misstatement of this other information- we are required to report that fact. Wehave nothing to report in this regard.

Responsibilities of the Management and Those Charged with Governancefor the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin Section 134(5) of the Companies Act 2013 with respect to the preparation of thesefinancial 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 accounting principles generally accepted in India including theaccounting standards specified under Section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities selection and application of appropriate accountingpolicies making judgments and estimates that are reasonable and prudent and designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements the Board ofDirectors is responsible for assessing the ability of the Company to continue as a going

concern disclosing as applicable matters related to going concernand using the going concern basis of accounting unless the Board of Directors eitherintends to liquidate the Company or to cease operations or has no realistic alternativebut to do so.

The Board of Directors is also responsible for overseeing the Company'sfinancial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue 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 SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate 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.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances.Under Section 143(3)(i) of the Companies Act 2013 we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the goingconcern basis of accounting in preparation of standalone financial statements and basedon the audit evidence obtained whether a material uncertainty exists related to events orconditions that may cast significant doubt on the ability of the Company to continue as agoing concern. If we conclude that a material uncertainty exists we are required to drawattention in our auditor's report to the related disclosures in the standalone financialstatements or if such disclosures are inadequate to modify our opinion. Our conclusionsare based on the audit evidence obtained up to the date of our auditor's report. Howeverfuture events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves 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 the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditors' report unless law or regulation precludes publicdisclosure about the matters or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doing

so would reasonably be expected to outweigh the public interestsbenefits

of such communication.

Other Matters

Due to the COVID-19 pandemic and the resultant lockdown and otherrestrictions imposed by the Government and local authorities the audit processes werecarried out based on the remote access to the records and documents which were madeavailable by the management through digital medium.

Our opinion is not modified in respect of this matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of section143(11) of the Act we give in the Annexure "A" a statement on the mattersspecified in the paragraph 3 and 4 of the order.

2. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) In our opinion except for the matters stated in the Basis forQualified Opinion section proper books of account as required by law have been keptby the Company so far as it appears from our examination of those books.

(c) The Balance sheet the Statement of Profit and Loss (includingOther Comprehensive Income) the Statement of Changes in Equity and the Statement of CashFlows dealt with by this Report are in agreement with the books of account.

(d) In our opinion except for the matters stated in the Basis forQualified Opinion section the aforesaid standalone financial statements comply withthe Accounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014.

(e) On the basis of the written representations received from thedirectors as on March 31 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2020 from being appointed as a director interms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate report in Annexure "B".

(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 we report thatthe Company has provided for managerial remuneration in excess of the limit prescribedunder section 197 read with Schedule V to the Companies Act 2013 by ' 0.94 crores Thesame is subject to regularisation by way of approval of the shareholders at the ensuingAnnual General Meeting (refer note no. 26 to the standalone financial statements).

(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 inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact if any of pending litigationsas at March 31 2020 on its financial position in its standalone financial statements— Refer note no. 37 to the standalone financial statements.

ii. The Company did not have any long term contracts includingderivative contracts for which there were any material forseeable losses.

iii. The Company has not transferred an amount of '1800 pertaining todividend which is unclaimed for more than seven years to the Investor Education andProtection Fund (Refer note no. 48 to the standalone financial statements).

For N.M. Raiji & Co.
Chartered Accountants
Firm Registration No.: 108296W

 

Vinay D. Balse
Partner
Place: Mumbai Membership No.: 039434
Date: July 15 2020 UDIN: 20039434AAAAGR3 732

ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT OF EVEN DATEON THE FINANCIAL STATEMENTS OF ROLTA INDIA LIMITED

(Referred to in Paragraph 1 under the heading of "Report on OtherLegal and Regulatory Requirements" of our report of even date)

We report that:

i. (a) The Company has maintained proper

records showing full particulars including quantitative details andsituation of fixed assets.

(b) As explained to us according to the practice of the Company fixedassets are physically verified by the management at reasonable intervals which in ouropinion is reasonable considering the size of the company and nature of its business.

(c) According to the information and explanations given to us and onthe basis of our examination of the records of the Company the title deeds of immovableproperties are held in the name of the Company.

ii. The Company is a service company primarily rendering softwareservices. Accordingly it does not hold any physical inventories. Thus paragraph 3(ii) ofthe Order is not applicable to the Company.

iii. The Company has granted interest free unsecured loans to its fourwholly owned subsidiary companies covered in the register maintained under section 189 ofthe Companies Act 2013

('the Act').

(a) According to the information and explanations given to us and basedon the audit procedures conducted by us we are of the opinion that the terms andconditions of loans granted by the company to four body corporates covered in the registermaintained under section 189 of the Companies Act 2013 the balance outstanding of whichas at March 31 2020 is ' 214.85 crores are prejudicial to the company's interest onaccount of the fact that the loans have been granted without any underlying agreement.These loans are interest free which is unreasonable against the cost of funds to thecompany.

(b) In the case of the loans granted to the bodies corporate listed inthe register maintained under section 189 of the Act there is no fixed schedule forrepayment of the principal since the loans have been granted without any underlyingagreement.

(c) There are no overdue amounts in respect of the loan granted to abody corporate listed in the register maintained under section 189 of the Act.

iv. In our opinion and according to the information and explanationsgiven to us there are no loans investments guarantees and securities given in respectof which the provisions of section 185 and 186 of the Companies Act 2013 are applicableand hence not commented upon.

v. The Company has not accepted any deposits from the public.

vi. The Central Government has not prescribed the maintenance of costrecords under section 148(1) of the Act for any of the services rendered by the Company.Accordingly the provisions of clause 3(vi) of the Order are not applicable.

vii. (a). According to the information and explanations

given to us and on the basis of our examination of the records of theCompany amounts deducted/accrued in the books of account in respect of undisputedstatutory dues including provident fund income-tax sales tax value added tax duty ofcustoms service tax goods and service tax cess and other material statutory dues havenot been regularly deposited during the year by the Company with the appropriateauthorities and there have been significant delays in a large number of cases.

The details of undisputed amounts payable in respect of the statutorydues mentioned above and the interest thereon and which were outstanding at the year-endfor a period of more than six months from the date they become payable is as tabulatedbelow:

Particulars Amount (' in crores) Period of Default
Profession Tax 0.16 7-20 Months
Provident & Pension Fund 2.75 7-20 Months
ESIC & Labour Welfare Fund 0.02 7-19 Months
TDS 17.21 7-23 Months
Interest on Statutory Dues 7.41 Between 7 to 23 months

(b) The dues in respect of income-tax service tax sales tax and VATwhich have not been deposited on account of any dispute with the appropriate authoritiesis as tabulated below:

Name of statute Amount (' in crores) Period for which the amount relates Forum where dispute is pending
Income Tax 82.60 AY 2015-16 Commissioner of Income Tax (Appeals)
Service Tax 00.15 FY 2013-14 Commissioner
00.37 FY 2014-15 of Service Tax
00.35 FY 2015-16 (Appeals)
Central Sales Tax 0.49 FY 2008-09 Deputy Commissioner
0.59 FY 2014-15 of Sales Tax
MVAT 1.08 FY 2008-09 Deputy Commissioner
0.32 FY 2014-15 of Sales Tax

viii. There are no loans or borrowings payable to financialinstitutions or government and no dues payable to debenture-holders. The Company hasdefaulted in repayment of loans/borrowings to the following banks:

Name of the bank Nature of loan/ borrowing Amount of default as on March 31 2020 (In Rs' Crores) Period of default Remarks
Union Bank of India Bank of Baroda Bank of India (Consortium Balance) External Commercial Borrowing 314.98 March 26 2018 - till date Continuing Default
UBI-ECB-Rupee Term Loan Rupee Term Loan 153.89 March 26 2018 - till date Continuing Default
Bank of Baroda External Commercial Borrowing 62.95 January 26 2018 - till date Continuing Default
Syndicate Bank Term Loan 31.84 March 312019 - till date Continuing Default
Bank of Baroda Working Capital Term Loan — I 152.05 From September 29 2018 Continuing Default
Central Bank of India 139.66 From December 28 2018
Union Bank of India 345.80 From December 28 2018
Bank of India 228.25 From December 31 2018 (All the above loans are outstanding till date)
Bank of Baroda Union Bank of Working Capital Term 164.50 267.84 December 312017 - till date Continuing Default
India Bank of India Loan — II 179.10
Bank of Baroda Overdraft 99.10 December 2017 - till date Continuing Default
Central Bank of India 39.89 January 2018 - till date
Union Bank of India 209.99 February 2018 - till date
Bank of India 173.04 November 2017 - till date
Central Bank of India LC devolvement 99.62 Between March 07 2018 to July 29 2018 - till date Continuing Default
48.33
Union Bank of India Between April 18 2018 to July 17 2018 - till date
Syndicate Bank Central Bank of India Union Bank of India Bank of India SBLC's invoked 1579.57 Between November 01 2018 to January 23 2019 - till date Continuing Default
Central Bank of India Union Bank of India Bank of India BG Invocation 17.87 Between March 18 2019 to January 08 2020 - till date Continuing Default

ix. The Company has not raised during the year

moneys by way of initial public offer or further public offer(including debt instruments) and term loans hence reporting under this clause is notapplicable to the Company.

x. In our opinion no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the period covered by our audit.

xi. The managerial remuneration provided by the Company for the yearexceeds the limits specified as per Section 197 read with Schedule-V of the Companies Act2013 by ' 0.94 crores. Pursuant to the provisions of the Companies (Amendment) Act 2017the Company is required to take approval for the excess from the shareholders at theensuing Annual General Meeting.

xii. In our opinion and according to the information and explanationsgiven to us the Company is not a Nidhi Company. Accordingly clause (xii) of paragraph 3of the Order is not applicable to the Company.

xiii. In our opinion and according to the information and explanationsgiven to us all transactions with the related parties are in compliance with section 177and 188 of Companies Act 2013 and corresponding details have been disclosed in thefinancial statements as required by the applicable accounting standards.

xiv. In our opinion and according to the information and explanationsgiven to us the Company has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year. Accordingly reportingrequirement under clause (xiv) of paragraph 3 of the Order is not applicable to theCompany.

xv. In our opinion and according to the information and explanationsgiven to us the Company has not entered into non-cash transactions with its directors orpersons connected with them and hence provisions of section 192 of the Act are notapplicable. Accordingly requirement under clause (xv) of paragraph 3 of the Order is notapplicable to the Company.

xvi. To the best of our knowledge and belief the Company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.

For N.M. Raiji & Co.
Chartered Accountants
Firm Registration No.: 108296W

 

Vinay D. Balse
Partner
Place: Mumbai Membership No.: 039434
Date: July 15 2020 UDIN: 20039434AAAAGR3 732

Annexure to Auditors' Report

Annexure - B to the Auditors' Report

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

We have audited the internal financial controls over financialreporting of Rolta India Limited ("the Company") as at March 31 2020 inconjunction with our audit of the standalone financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

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 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 Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note and the Standards on Auditing issued by the ICAI anddeemed to be prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively 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 judgement 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 opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

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

Because of the inherent limitations of internal financial controls overfinancial 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.

Based on the audit carried out by us and according to the informationand explanations given to us we have observed high levels of attrition in the financialyear which has resulted in the residual personnel having had to carry out multiple taskswhich would not be desirable from the internal control mechanism perspective. However thesaid risk has been substantially mitigated due to the fact that the size of operations ofthe Company has also reduced significantly during the year as compared to the previousyear/s.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system over financial reporting and such internal financialcontrols over financial reporting were operating effectively as at March 31 2020 basedon the internal control over financial reporting criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India.

For N.M. Raiji & Co.
Chartered Accountants
Firm Registration No.: 108296W

 

Vinay D. Balse
Partner
Place: Mumbai Membership No.: 039434
Date: July 15 2020 UDIN: 20039434AAAAGR3 732

.