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Sankhya Infotech Ltd.

BSE: 532972 Sector: IT
NSE: N.A. ISIN Code: INE877A01013
BSE 00:00 | 06 Jul 6.43 0.30
(4.89%)
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NSE 05:30 | 01 Jan Sankhya Infotech Ltd
OPEN 5.83
PREVIOUS CLOSE 6.13
VOLUME 1467260
52-Week high 20.70
52-Week low 4.85
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 5.83
CLOSE 6.13
VOLUME 1467260
52-Week high 20.70
52-Week low 4.85
P/E
Mkt Cap.(Rs cr) 9
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Sankhya Infotech Ltd. (SANKHYAINFOTECH) - Auditors Report

Company auditors report

To the Members of

Sankhya Infotech Limited

Report on the Audit of the Ind AS Financial Statements

Opinion

We have audited the accompanying Ind AS Financial Statements of Sankhya InfotechLimited (hereinafter referred as "the Company") which comprises the BalanceSheet as at March 31 2021 the Statement of Profit and Loss including the Statement ofOther Comprehensive Income the Cash Flow Statement and the Statement of changes in Equityfor the year then ended and notes to the Ind AS Financial Statements including a summaryof significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Ind AS Financial Statements give the information required bythe Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at March 31 2021 its profit/loss including othercomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the Ind AS Financial Statements in accordance with theStandards on Auditing (SAs) specified under Section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the "Auditor'sResponsibilities for the Audit of the Ind AS Financial Statements" section of ourreport. We are independent of the Company in accordance with the 'Code of Ethics' issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the Ind AS Financial Statements under the provisions ofthe Companies Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our audit opinion on the Ind AS Financial Statements.

Material Uncertainty Related to Going Concern

The company continues to incur losses and has no contracts/orders to execute. We drawattention to the Ind AS Financial Statements for FY 2020-21 which indicates that theCompany incurred a Net Loss of Rs.750.63 lakhs during the year ended March 31 2021. TheOverdraft of Rs. 23.88 crores from the Bank continues to be Non-Performing Asset.

Further the events or conditions as set out in Note No. 14 and the fact that theCompany had NIL Revenue from Operations for the FY 2020-21 and has no order to executeindicate that a material uncertainty exists that may cast significant doubt on thecompany's ability to continue as a going concern.

Emphasis of Matter

IDBI bank had filed an application with NCLT for Corporate Insolvency ResolutionProcess against the company under Section 7 of Insolvency and Bankruptcy code 2016. As perthe information and explanation given to us as on date of the report the application hasnot been admitted by NCLT against the company.

Our conclusion on the Statement is not modified in respect of the above matters.

Information Other than the Ind AS Financial Statements and Auditor's Report thereon

The Company's Board of Directors is responsible for the Other Information. The OtherInformation comprises the information included in the Directors' Report but does notinclude the Ind AS Financial Statements and our auditor's report thereon.

Our opinion on the Ind AS Financial Statements does not cover the Other Information andwe do not express any form of assurance conclusion thereon.

In connection with our audit of the Ind AS Financial Statements our responsibility isto read the Other Information and in doing so consider whether such Other Information ismaterially inconsistent with the Ind AS Financial Statements or our knowledge obtained inthe audit orotherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is any material misstatement in this Other informationwe are required to report that fact. We have not come across any such findings and hencethere is nothing to report in this regard.

Responsibility of Management for the Ind AS 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 the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) specified undersection 133 of the Act read with the companies (Indian Accounting Standards) Rules2015as amended. This responsibility also includes maintenance of adequate accounting recordsin accordance 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 controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe Ind AS Financial Statement that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the Ind AS Financial Statements management is responsible for assessingthe Company's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

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

Auditor's Responsibilities for the Audit of the Ind AS Financial Statements

Our objectives are to obtain reasonable assurance about whether the Ind AS FinancialStatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these Ind AS Financial Statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintainprofessional skepticism throughout the audit. We also:

a. Identify and assess the risk of material misstatement of the Ind AS FinancialStatements whether due to fraud or error design and perform audit procedures responsiveto thoserisk 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 collusion forgeryintentional omissions misrepresentations or the override of internal control.

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

c. Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.

d. Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexistsrelated to events or conditions that may cast significant doubt on the Company's abilityto continue as a going concern. If we conclude that a material uncertainty exists wearerequired to draw attention in our auditor's report to the related disclosures in the IndAS Financial Statements or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport.However future events or conditions may cause the Company to cease to continue asa going concern.

e. Evaluate the overall presentation structure and content of the Ind AS FinancialStatements including the disclosures and whether the Ind AS Financial Statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters thatwere 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 suchcommunication.

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 sub-section (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act based on our audit 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 the Statement of OtherComprehensive Income the Cash Flow Statement and Statement of Changes in Equity dealtwith by this Report are in agreement with the books of account;

d) In our opinion the aforesaid Ind AS Financial Statements comply with the AccountingStandards specified under section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended;

e) On the basis of the written representations received from the directors of theCompany as on March 31 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2021 from being appointed as a director in termsof Section 164(2) of the Act;

f) With respect to the adequacy of the Internal Financial Controls over FinancialReporting of the Company with reference to these Ind AS Financial Statements and theoperating effectiveness of such controls refer to our separate Report in "AnnexureB" to this report.

g) Based on the information and examination of records of the Company no managerialremuneration was paid for the year ended March 31 2021 and thus the provisions of section197 read with Schedule V to the Act are in compliance;

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 not disclosed the impact of pending litigations on its financialposition in its Ind AS Financial Statements. Refer point (viii) of Annexure A of theReport.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

iii. There has been no delay in transferring amounts if any required to betransferred to the Investor Education and Protection Fund by the Companyif any.

Annexure "A" referred to in paragraph 1 under the heading "Report onOther Legal and Regulatory Requirements" of our report on even date on the Ind ASFinancial Statements to the Members of Sankhya Infotech Limited

(i) (a) The Company has maintained proper records showing full particularsincludingquantitative details and situation of property plant and equipment.

(b) According to the explanations given to us all the fixed assets have beenphysically verified by the management at reasonable intervals having regard to the size ofthe Company and the nature of its assets and no material discrepancy was noticed on suchverification as compared to book records.

(c) According to information and explanations given to us and based on the auditprocedures conducted by us the company does not have any immovable properties. Henceclause 'c' of the order is not applicable.

(ii) The Company's business does not involve inventories and accordingly therequirements under paragraph 4(ii) of the Order are not applicable to the Company andhence not beencommented upon.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms Limited Liabilitypartnerships or other parties covered in the Register maintained under section 189 of theAct. Accordingly the provisions of paragraph 3 (iii) (a) to (c) of the Order are notapplicable to the Company.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.

(v) The Company has not accepted deposits within the meaning of Section 73 to 76 of theAct and the Companies (Acceptance of Deposits) Rules 2014 (as amended). During the yearand doesnot have any unclaimed deposits as at March 31 2021 and therefore reportingunder clause (v) of CARO 2016 is not applicable to the Company.

(vi) To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under Section 148(1) of the Companies Act 2013for the products/services of the Company.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) According to the information and explanations given to us and on the basis of ourExamination of the records of the Company amount deducted/accrued in the books of Accountin respect of undisputed statutory dues including provident fund ESI income tax andother material statutory dues have not been regularly deposited during the year by theCompany with the appropriate authorities. According to the information and explanationsgiven to us undisputed amount payable in respect of Provident Fund Tax deducted atsource (TDS) and other material statutory dues were in arrears as at 31stMarch 2021 for a period of more than six months from the date they become payable.

Nature of Dues Amount (Rs.)
Provident Fund 4686648
Employee State Insurance 514077
TDS payable (Other thanSalary) 4385632
TDS payable on Salary 4491736

(b) Details of dues of Income Tax and Goods and Services Tax which have not beendeposited asat March 31 2021 on account of dispute are given below:

Nature of the statute Nature of Dues Forum Where the dispute is pending Period to which the amount relates Amount Rs.
Income Tax Income Tax Principal Commissioner of Income Tax - 3 Hyderabad (appeals) Assessment Year 2018-19 Rs. 32089040
Income Tax Income Tax Principal Commissioner of Income Tax - 3 Hyderabad (appeals) Assessment Year 2017-18 Rs. 26754340
Income Tax Income Tax Principal Commissioner of Income Tax - 3 Hyderabad (appeals) Assessment Year 2016-17 Rs. 97667850
Income Tax Income Tax CIT(A) Hyderabad - 3 (appeals) Assessment Year 2015-16 Rs. 12353110
GST Goods & Service Tax Commissioner of Central Excise (appeals) 1 Jan 2013 to 30-09-2016 Rs. 3253155

(viii) On the basis of the information received from the management the Company hasdefaulted in repayment of Cash Credit since August 2014 and the total outstanding amountas per the books of accounts is Rs. 25.89 Crore.

(ix) According to information and explanation given by the management the Company hasnot raised any money by way of initial public offer/further public offer/debt instrumentsand term loans hence reporting under clause (ix) is not applicable to the Company

(x) To the best of our knowledge and according to the information and explanationsgiven to us we report that no fraud by the Company or on the Company by its officers oremployees has been noticed or reported during the year

(xi) In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii) In our opinion the Company is not a Nidhi Company. Therefore the provisions ofclause 3(xii) of the order are not applicable to the Company and hence not commented upon.

(xiii) Based on our audit procedures performed for the purpose of reporting the trueand fair view of the Ind AS Financial Statements and according to the information andexplanations given by the management transactions with the related parties if any arein compliance with section 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in the notesto the Ind AS Financial Statements as required bythe applicable accounting standards.

(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe Company and not commented upon.

(xv) In our opinion and according to the information and explanations given to usduring the yearthe Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable to the Company.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of IndiaAct 1934.

Annexure "B" referred in paragraph 2(f) under the heading "Report onOther Legal and Regulatory Requirements" of our report on even date on the Ind ASFinancial Statements to the Members of Sankhya Infotech Limited

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

We have audited the Internal Financial Controls over Financial Reporting of SankhyaInfotech Limited ("the Company") as of March 31 2021 in conjunction with ouraudit of the Ind AS Financial Statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company 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. Theseresponsibilities include the design implementation and maintenance of adequate InternalFinancial Controls that were operating effectively for ensuring the orderly and efficientconduct of its business the safeguarding of its assets the prevention and detection offrauds and errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's Internal FinancialControls over Financial Reporting with reference to these Ind AS Financial Statementsbased on our audit. We conducted our audit in accordance with the Guidance Note on Auditof Internal Financial Controls Over Financial Reporting (the "Guidance Note")issued by the Institute of Chartered Accountants of India and the Standards on Auditingprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of Internal Financial Controls. Those Standards and the Guidance Note requirethat 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 over Financial Reporting and their operatingeffectiveness. Our audit of Internal Financial Controls over Financial Reporting includedobtaining an understanding of Internal Financial Controls over Financial Reporting withreference to these Ind AS Financial Statements assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. 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.

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 with reference to these Ind AS Financial Statements.

Meaning of Internal Financial Controls Over Financial Reporting with Reference to theseInd AS Financial Statements

A Company's Internal Financial Controls over Financial Reporting with reference tothese Ind AS Financial Statements is a process designed to provide reasonable assuranceregarding the reliability of Financial Reporting and the preparation of Ind AS FinancialStatements for external purposes in accordance with generally accepted accountingprinciples. A Company's Internal Financial Controls over Financial Reporting withreference to these Ind AS Financial Statements 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 Ind AS Financial Statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the Company are being madeonly in accordance 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 Ind AS Financial Statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting withReference to these Ind AS Financial Statements

Because of the inherent limitations of Internal Financial Controls over FinancialReporting with reference to these Ind AS Financial Statements including the possibilityof collusion or improper management override of controls material misstatements due toerror or fraud may occur and not be detected. Also projections of any evaluation of theInternal Financial Controls over Financial Reporting with reference to these Ind ASFinancial Statements to future periods are subject to the risk that the Internal FinancialControls over Financial Reporting with reference to these Ind AS Financial Statements maybecome inadequate because of changes in conditions or that the degree of compliance withthe policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects adequate Internal Financial ControlsSystem over financial reporting with reference to these Ind AS Financial Statements andsuch Internal Financial Controls over Financial Reporting with reference to these Ind ASFinancial Statements were operating effectively as at March 31 2021 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 Ravi Rajan & Co. LLP
Chartered Accountants
(Firm's Registration No. 009073N/N500320)
Jayanth. A
Place : Bangalore Partner
Date : 30th June 2021 (Membership No. 231549)

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