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Saksoft Ltd.

BSE: 590051 Sector: IT
NSE: SAKSOFT ISIN Code: INE667G01015
BSE 00:00 | 29 Jul 663.30 -8.75
(-1.30%)
OPEN

699.00

HIGH

700.00

LOW

657.20

NSE 00:00 | 29 Jul 660.70 -12.65
(-1.88%)
OPEN

676.05

HIGH

683.10

LOW

655.90

OPEN 699.00
PREVIOUS CLOSE 672.05
VOLUME 2898
52-Week high 734.35
52-Week low 203.05
P/E 36.99
Mkt Cap.(Rs cr) 696
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 699.00
CLOSE 672.05
VOLUME 2898
52-Week high 734.35
52-Week low 203.05
P/E 36.99
Mkt Cap.(Rs cr) 696
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Saksoft Ltd. (SAKSOFT) - Auditors Report

Company auditors report

To

The Members of SAKSOFT LIMITED

Report on the Audit of the Standalone Financial

Statements

Opinion

We have audited the standalone financial statements of SAKSOFT LIMITED ("theCompany") which comprise the balance sheet as at 31st March 2020 and the statementof Profit and Loss (including Other Comprehensive Income) statement of changes in equityand statement of cash flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as "the standalone financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 (the "Act") in the manner so required and give a true andfair view in conformity with Indian Accounting Standards prescribed under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 and profit total comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion on thestandalone financial statements.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements and in forming ouropinion thereon and we do not provide a separate opinion on these matters.

Valuation of investments in subsidiaries:

The carrying amount of the company's investments in its subsidiaries held at costamount to Rs.1172.53 million (representing 76 % of the total assets) as at 31st March2020. The recoverability of these amounts are tested by comparing the carrying value ofthese Equity Investments of the parent in its subsidiaries with their respective fairvalue derived by the valuation principles prescribed by Ind AS 113 - Fair ValueMeasurement. In view of the significance of the assumptions underlying the ascertainmentof the fair value of the individual investments valuation of subsidiaries is considered akey audit matter.

How the matter was disposed of:

The Management reviews the need for impairment of its investments in its subsidiariesby comparing the carrying amount of investments with the fair value of such investmentsderived under the principles contained in Ind AS 113 Fair Value Measurement. In doing sothe amount by which the present value of the free cash flows fall below the carrying valueof investments an impairment provision to that extent is considered in the books. Suchprovision is reviewed at every subsequent reporting date for necessary adjustments as maybe required.

Principal audit procedures:

We reviewed the process of impairment assessment and selection of valuation model forderiving the fair value of the Company's equity investments with reference to assumptionsunderlying ascertainment of future free cash flows from each Cash Generating Unit andconcluded that in view of the present values of such cash flows being in excess of thecost of investments carried in parent's books there was no need for diminution in thevalue of investments carried in the financial statements.

Emphasis of Matters

We invite attention to Note No 22 (o) to the financial statements wherein managementwhile concluding no significant impact due to COVID on the current years financialresults has considered internal and external source of information relating to economicforecasts and estimates on realizability of various classes of assets and expects torecover them in full. Management's assumptions and estimates on operational and financialperformance of the company would largely depend on future developments as they emerge asstated in the said note. Our opinion is not modified in respect of this matter.

Other Information

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report but doesnot include the standalone and consolidated financial statements and our respectiveauditor's report thereon.

Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance on information provided thereon.

In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the financial statements or our knowledge obtained in theaudit otherwise appears to be materially misstated.

If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Management's Responsibility for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities selection and application of appropriateaccounting policies making judgments and estimates that are reasonable and prudent anddesign implementation 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 standalone financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as 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.

The Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibility

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud orerror and to issue an audit report that includes our opinion. Reasonable assurance is ahigh level of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement where it exists.Mis-statements 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 standalone financial statements.

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

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe Company has an adequate internal financial controls system in place and operatingeffectiveness of such controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our report to the related disclosures in thestandalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

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 communicate to them allrelationships 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("Order")issued by the Central Government of India in terms of Section 143(11) of the Act we givein the "Annexure A" a statement on the matters specified in paragraph 3 and 4 ofthe Order.

2. 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 Standalone Balance Sheet the Standalone Statement of Profit and Loss includingother comprehensive income the Standalone Statement of Cash Flows and Statement ofChanges in Equity dealt with by this Report are in agreement with the books of account;

(d) In our opinion the aforesaid standalone financial statements comply with the IndAS specified under Section 133 of the Act.

(e) On the basis of the written representations received from the directors taken onrecord by the Board of Directors none of the directors is disqualified as on 31st March2020 from being appointed as a director in terms of Section 164 (2) 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"; Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

(g) 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 opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of the Act.

(h) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 22 (a) to the standalone financialstatements;

ii. The Company has long-term contracts and derivative contracts for which there wereno material foreseeable losses;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

For R.G.N. Price & Co.
Chartered Accountants
Firm registration no.: 002785S
Mahesh Krishnan
Partner
Place: Chennai Membership No.: 206520
Date: 27th May 2020 UDIN No.: 20206520AAAABT6789

Annexure A to the Independent Auditors' Report

(Referred to in paragraph 1 under ‘Report on Other Legal and RegulatoryRequirements section our report to the Members of SAKSOFT LIMITED of even date)

I a. The Company has maintained proper records for its fixed assets showing fullparticulars including quantitative details and situation of those assets.

b. The Company has a policy of physically verifying its fixed assets once in two yearswhich in our opinion is reasonable having regard to the size of the Company and itsbusiness. The Company had physically verified the assets during the year and noted nomajor discrepancies.

c. According to information and explanations given to us and on the basis ofexamination of records of the Company there are no immovable properties held in the nameof the Company.

II In our opinion and according to the information and explanations given to us havingregard to the nature of the Company's business / activities during the year clause (ii)of paragraph 3 of the Order relating to inventories is not applicable to the company.

III The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the Register maintained underSection 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 in respect ofinvestments made and the Company has not granted any loans to Directors nor has grantedany loan or guarantee or security to any company body corporate or to any person.

V The Company has not accepted any deposits during the year and the provisions ofSection 73 to 76 or any other relevant provisions of the Act and the rules framedthereunder are not applicable to the Company.

VI Having regard to the nature of the Company's business / activities the maintenanceof cost records has not been specified by the Central Government under section 148(1) ofthe Act.

VII a. The Company is regular in depositing with appropriate authorities undisputedstatutory dues including Provident Fund Employees' State Insurance Income Tax Goods& Service tax cess and other statutory dues applicable to it. There are no arrears ofundisputed statutory dues outstanding as at 31st March 2020 for a period of more than sixmonths from the date they became payable.

b. There are no dues of Income Tax Sales tax Service Tax Customs Duty Excise DutyValue Added Tax or Cess which have not been deposited on account of any dispute as at 31stMarch 2020 except for an amount of 12.58 millions as detailed below:

Name of the Statute Nature of the dues Amount involved (Rs in Million) Amount unpaid (Rs in Million) Period to which the amount relates to Forum where the dispute is pending
Income Tax Act 1961 Income Tax 29.56 5.93 A.Y. 2009-10 CIT (Appeals)
Income Tax Act 1961 Income Tax 20.45 6.56 A.Y. 2010-11 DCIT
Income Tax Act 1961 Income Tax 11.36 0.09 A.Y. 2011-12 DCIT

VIII According to the information and explanation given to us and the records of theCompany examined by us the Company has not defaulted in repayment of loans or borrowingfrom financial institutions and banks. The Company has not issued any debentures.

IX The Company did not raise any money by way of initial public offer or further publicoffer (including debt instruments) during the year. No new term loans have been obtainedduring the year.

X During the course of our examination of the books and records of the Company carriedout in accordance with the generally accepted auditing practices in India and according tothe information and explanation given to us we have neither observed any instance offraud by the Company or any material fraud on the Company by its officers or employees ofthe Company nor have we been informed of such case by the Management during the year.

XI In our opinion and according to the information and explanations given to usmanagerial remuneration has been paid in accordance with the requisite approvals mandatedby the provisions of Section 197 read with Schedule V to the Act.

XII The Company is not a Nidhi Company and hence Clause 3(xii) of the Order is notapplicable.

XIII In our opinion and according to the information and explanations given to ustransactions with related parties have been disclosed in the standalone financialstatements with details as required by Ind AS 24 "Related Party Transactions".These transactions are in compliance with Section 177 and 188 of the Act.

XIV The Company has not made any preferential allotment or private placement of sharesor fully or partly paid convertible debentures during the year.

XV According to the information and explanation provided to us and based on ourexamination of records the Company has not entered into any non-cash transactions withdirectors or persons connected with him.

XVI The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.

For R.G.N. Price & Co.
Chartered Accountants
Firm registration no.: 002785S
Mahesh Krishnan
Partner
Place: Chennai Membership No.: 206520
Date: 27th May 2020 UDIN No.: 20206520AAAABT6789

Annexure B to the Independent Auditors' Report

Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section143 of the Companies Act 2013 ('the Act')

We have audited the internal financial controls over financial reporting of SaksoftLimited ('the Company') as of 31st March 2020 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's Board of Directors 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). 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 Act.

Auditor's 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'34) and the Standards on Auditing to the extent applicable to anaudit of internal financial controls both issued by the Institute of CharteredAccountants of India. Those Standards and Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate 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 included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the standalone financial statements whether due to fraud or error. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit opinion on the Company's internal financial controls system overfinancial 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

According to the information and explanations given to us and based on our audit theCompany has in all material respects adequate internal financial controls over financialreporting and such internal financial controls over financial reporting were operatingeffectively as at 31st March 2020 based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note issued by the Institute of Chartered Accountants ofIndia.

For R.G.N. Price & Co.
Chartered Accountants
Firm registration no.: 002785S
Mahesh Krishnan
Partner
Place: Chennai Membership No.: 206520
Date: 27th May 2020 UDIN No.: 20206520AAAABT6789

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