The Members of
Sagarsoft (India) Limited
Report on the Financial Statements
We have audited the accompanying Ind AS financial statements of M/s.Sagarsoft (India)Limited ("the Company") which comprise the Balance Sheet as at March 31 2018the Statement of Profit and Loss(including Other Comprehensive Income) the Cash FlowStatement and the statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.
Management's Responsibility for the Stand-alone 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 equities of the company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards(Ind AS) specified underSection 133 of the Act.
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 design implementation and maintenance of adequate internalfinancial controls 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.
Our responsibility is to express an opinion on these Ind AS financial statements basedon 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 AS financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the Ind AS financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the Ind AS financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of theInd AS financial statements whether due to fraud or error. In making those riskassessments the auditor considers internal financial control relevant to the Company'spreparation of the Ind AS financial statements that give a true and fair view in order todesign audit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company's Directors as well as evaluating theoverall presentation of the Ind AS financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Ind AS financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS financial statements give the information required bythe Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of company asat March 31 2018 and its profit total comprehensive income its cash flows and thechanges in equity for the year ended on that date.
Report on Other Legal And Regulatory Requirements
As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Companies Act 2013 we give in the Annexure A a statement on the matters specifiedin paragraphs 3 and 4 of the Order to the extent applicable.
As required by Section 143 (3) of the Act we report that:
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome the Cash Flow Statement and the statement of Changes in Equity dealt with in thisreport are in agreement with the books of account.
(d) In our opinion the aforesaid Ind AS financial statements comply with the IndianAccounting Standards specified under Section 133 of the Act.
(e) Based on the written Representation received from the directors as on March 312018 and taken on record by the Board of Directors we report that none of the directorsare disqualified as on March 31 2018 from being appointed as a director in terms ofSubsection 2 of Section 164 of the Act.
(f) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate report in "Annexure B"; and (g) With respect to the other matters to beincluded in the Auditor's Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according tothe explanations given to us: i. The Company has no pending litigations on its financialposition in its financial statements . ii. There is no requirement for any provision asrequired by any act or Indian Accounting Standards for material foreseeable losses ifany on long term contracts including derivative contracts. iii. There are no amountswhich are required to be transferred to Investor Education and Protection Fund.
Annexure A to the Auditors' Report
Annexure referred to in paragraph under Report on Other Legal and RegulatoryRequirements' section of our report of the Independent Auditor's Report of even date ofSagarsoft (India) Limited on the financial statements for the year ended March 31 2018.
In terms of the information and explanations sought by us and given by the company andthe books and records examined by us in the normal course of audit and to the best of ourknowledge and belief we state the following:
i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) The company has verified fixed assets at regular intervals. There were no materialdiscrepancies noticed on such verification.
(c) According to information and explanation given to us the company has no immovableproperty. Thus paragraph 3 (i)(c) of the Order is not applicable to the company.
ii. The Company is a service company primarily rendering software and relatedconsultancy services. Accordingly it does not hold any physical inventories. Thusparagraph 3(ii) of the Order is not applicable to the Company.
iii. The company has granted loan to one body corporate covered in the registermaintained under Section 189 of the Act.
(a) In our opinion the rate of interest and other terms and conditions on which theloan had been granted to the body corporate listed in the register maintained underSection 189 of the Act were not prima facie prejudicial to the interest of the company.
(b) In the case of the loan granted to the body corporate listed in the registermaintained under Section 189 of the Act the borrower has been regular in the payment ofthe principal and interest as stipulated.
(c) There is no overdue amount in respect of the loan granted to a body corporatelisted in the register maintained under Section 189 of the Act.
iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respectto the loans and investments made.
v. The company has not accepted any deposits within the meaning of provisions ofSections 73 to 76 or any other relevant provisions of the Companies Act 2013 and therules framed there under. Thus paragraph 3(v) of the Order is not applicable to thecompany.
vi. The Central Government has not prescribed the maintenance of cost records to thecompany under section 148(1) of the Act. Thus paragraph 3(vi) of the Order is notapplicable to the company.
vii. (a) According to the information and explanations given to us and the records ofthe companies examined by usin our opinion the company is regular in depositing theundisputed statutory dues including provident fund income tax and other materialstatutory dues as applicable with the appropriate authorities.
(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income tax and other material statutory duesas applicable which have not been deposited on account of any dispute.
viii. In our opinion and according to information and explanations given to us theCompany did not have any outstanding dues to financial institutions banks or debentureholders during the year.
ix. The company has not raised any moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the reporting period. The company has notavailed any term loans during the financial year.
x. During the year no fraud by employees or officers on the company has been noticed.
xi. According to information and explanation given to us the company has providedmanagerial remuneration in accordance with Section 197 read with schedule V to theCompanies Act 2013
xii. In our opinion the company is not a Nidhi Company. Accordingly paragraph 3(xii)of the Order is not applicable for the company.
xiii. In our opinion and according to information and explanations given to us alltransactions with the related parties are in compliance with Sections 177 and 188 ofCompanies Act 2013 and the details of such transactions have been disclosed in the Ind ASFinancial statements of the company as required by applicable Accounting Standards.
xiv. According to information and explanation given to us the company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year.
xv. According to information and explanation given to us the company has not enteredinto non cash transactions with directors or any persons connected with him. Thusparagraph 3(xiv) of the Order is not applicable to the company.
xvi. In our opinion the company is not required to be registered under section 45IA ofReserve Bank of India Act 1934. Thus paragraph 3(xv) of the Order is not applicable tothe company.
Annexure - B to the Auditors' Report
(Referred to in paragraph (f) under Report on other Legal and RegulatoryRequirements of our report of even date)
We have audited the internal financial controls over financial reporting of Sagarsoft(India) Limited ("the Company") as of March 31 2018 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 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 by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. 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 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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the company's assets that could have amaterial 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.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 312018 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For LAKSHMI & ASSOCIATES. |
| ||Chartered accountants |
| ||F.R.No.012482S |
| ||MOHAN REDDY T |
|Place: Hyderabad ||Partner |
|Date: May 14 2018 ||Membership No: 239635 |