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Sasken Technologies Ltd.

BSE: 532663 Sector: IT
NSE: SASKEN ISIN Code: INE231F01020
BSE 00:00 | 04 Jun 409.80 -6.00
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408.90

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413.00

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406.00

NSE 00:00 | 04 Jun 410.90 -3.60
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407.70

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OPEN 408.90
PREVIOUS CLOSE 415.80
VOLUME 1410
52-Week high 742.40
52-Week low 342.20
P/E 7.49
Mkt Cap.(Rs cr) 617
Buy Price 410.00
Buy Qty 30.00
Sell Price 417.00
Sell Qty 20.00
OPEN 408.90
CLOSE 415.80
VOLUME 1410
52-Week high 742.40
52-Week low 342.20
P/E 7.49
Mkt Cap.(Rs cr) 617
Buy Price 410.00
Buy Qty 30.00
Sell Price 417.00
Sell Qty 20.00

Sasken Technologies Ltd. (SASKEN) - Auditors Report

Company auditors report

To the Members of Sasken Technologies Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the Standalone Financial Statements of Sasken Technologies Limited("the Company") which comprise the Standalone Balance Sheet as at 31 March2019 and the Standalone Statement of Profit and Loss (including other comprehensiveincome) Standalone Statement of Changes in Equity and Standalone Statement of Cash Flowsfor the year then ended and notes to the Standalone Financial Statements including asummary of the significant accounting In our opinion and to the best of our informationand according to the explanations given to us the aforesaid Standalone FinancialStatements give the information required by the Companies Act 2013 ("Act") inthe manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31March 2019 and profit and other comprehensive income changes in equity and its cashflows 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 Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered

Accountants of India together with the ethical requirements that are relevant to ouraudit of the Standalone Financial Statements under the provisions of the Act 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 sufficientand appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Financial Statements of the current period.These matters were addressed in the context of our audit of the Standalone FinancialStatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.

Revenue recognition - Fixed Price Development Contracts See note 28 to the StandaloneFinancial Statements

The key audit matter How the matter was addressed in our audit
The Company engages in fixed-price development contracts where revenue is recognized using percentage of completion computed as per the input method based on management's estimate of contract costs. In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient and appropriate audit evidence:
We identifiedrevenue recognition from fixed price development contracts as a Key Audit Matter (KAM) considering - - evaluated and tested the design and operating effectiveness of internal controls relating to recording of costs incurred and estimation of costs required to complete the performance obligations;
there is an inherent risk around the accuracy of revenues given the customized nature of these contracts and significant involvement of IT systems; - selected a sample of contracts and tested that the revenue is recognized in accordance with the accounting standard by evaluating management's identification of performance obligation transaction price and method of revenue recognition;
application of revenue recognition accounting standard is complex and involves a number of key judgments and estimates including estimating the future cost-to- completion of these contracts which is used to determine variations and verify whether those variations the percentage of completion of the relevant performance obligations; and - selected a sample of contracts and performed a retrospective review of costs incurred with estimated costs to identify any significant have been considered in estimating the remaining costs to complete the contract;
these contracts may involve onerous obligations that require critical estimates to be made by management. - reviewed the contract assets and unbilled revenues to identify possible delays in achieving milestones which require change in estimated costs to complete the remaining performance obligations;
- reviewed contract margins to determine creation of onerous provision for contracts with low or negative margins; and
- performed analytical procedures and test of details to verify reasonableness of costs incurred and estimated to complete performance obligations.

Evaluation of tax litigations and contingencies See note 34 to the Standalone FinancialStatements

The key audit matter How the matter was addressed in our audit
The Company operates under several tax laws and regulations and is subject to periodic challenges by tax authorities on a range of tax matters during the normal course of business including managementindirect tax matters. These involve significant judgment including consultations with specialists to determine the possible outcome of the litigations consequently having an impact on related accounting and disclosures in the financial statements. In view of the significance of the matter we applied the following audit procedures in this area among others to obtain sufficient and appropriate audit evidence:
We along with our internal tax experts -
- read and analyzed select key correspondences external legal opinions / consultations by management and relevant legal precedence and other rulings;
- discussed with appropriate senior management and evaluated management's key underlying assumptions in estimating the tax provisions;
- assessed management's estimate of the possible outcome of the disputed cases; and
- assessed the adequacy of Company's accruals and disclosures in relation to taxes.

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditors' reportthereon. Our opinion on the Standalone Financial Statements does not cover the otherinformation and we do not express any form of assurance conclusion 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 Standalone Financial Statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's Responsibility for the Standalone Financial Statements

The Company's management and Board of Directors are responsible for the matters statedin Section 134(5) of the Act with respect to the preparation of these Standalone FinancialStatements that give a true and fair view of the state of affairs profit / loss and othercomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian AccountingStandards (Ind AS) specifiedunder 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 were operatingeffectively for ensuring the accuracy and completeness of the relevant to the preparationand presentation of the Standalone Financial Statements that give a true and fair view andare free from material misstatement whether due to fraud or error.

In preparing the Standalone Financial Statements management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

Board of Directors is also responsible for overseeing the Company's financial reportingprocess.

Auditor's Responsibilities for the Audit of the Standalone Financial Statements

Our objectives are to obtain reasonable assurance about whether the StandaloneFinancial Statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditors' report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these Standalone Financial Statements.

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

•Identify and assess the risks of material misstatement of the Standalone 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 Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

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

•Conclude on the appropriateness of management's use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significantdoubt 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 auditor's report to the related disclosures inthe Standalone 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 ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

•Evaluate the overall presentation structure and content of the StandaloneFinancial Statements including the disclosures and whether the Standalone FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation.

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 that were of most significance in the audit of the Standalone Financial Statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditors' report unless law or regulation precludes public disclosure about thematter or when 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 (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of Section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

(A) 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 Changes in Equity and theStandalone Statement of Cash Flows dealt with by this Report are in agreement with thebooks of account.

d) In our opinion the aforesaid Standalone Financial Statements comply with the Ind ASspecified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2019 from being appointed as a director in terms of Section164(2) of the Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact of pending litigations as at 31 March 2019 onits financialposition in its Standalone Financial Statements - Refer Note 34 to theStandalone Financial Statements;

ii. The Company did not have any material long-term contracts including derivativecontracts for which there were any material foreseeable losses during the year ended 31March 2019;

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended 31 March2019; and

iv. The disclosures in the Standalone Financial Statements regarding holdings as wellas dealings in specified bank notes during the period from 8 November 2016 to 30 December2016 have not been made in these financial statements since they do not pertain to thefinancial year ended 31 March 2019.

(C) With respect to the matter to be included in the Auditors' Report under Section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) which arerequired to be commented upon by us.

for B S R & Associates LLP

Chartered Accountants

Firm's Registration Number: 116231W/W-100024

Rushank Muthreja

Partner

Membership No. 211386

Bengaluru 23 April 2019

Annexure A to the Independent Auditors' Report

The Annexure A referred to in the Independent Auditors' Report to the Members of SaskenTechnologies Limited ("the Company") on the Standalone Financial Statements forthe year ended 31 March 2019. We report that:

(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

(b) The Company has verification of its fixed assets by which all fixed assetsare verified regularprogramme physical once in a period of threeyears.In our opinion thisperiodicity of physical verificationis reasonable having regard to the size of the Companyand the nature of its assets. During the current year no material discrepancies werenoticed on such verification

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds of immovable properties areheld in the name of the Company.

(ii) The Company is a service company and accordingly it does not hold any physicalinventories. Accordingly paragraph 3(ii) of the Order is not applicable to the Company.

(iii) The Company has granted unsecured loans to two parties covered in the registermaintained under Section 189 of the Companies Act 2013 (‘the Act'). In our opinionand according to the information and explanations given to us the terms and conditions onwhich the loans had been granted to the companies listed in the register maintained underSection 189 of the Act are not prejudicial to the company's interest. (iv) In our opinionand according to information and explanations given to us the Company has complied withthe provisions of Section 185 and 186 of the Act with respect to the loans giveninvestments made. Further there are no guarantees and security given in respect of whichprovisions of Section 185 and 186 of the Act are applicable.

(v) The Company has not accepted any deposits from the public. Accordingly paragraph3(v) of the Order is not applicable to the Company.

(vi) The Central Government of India has not prescribed the maintenance of cost recordsunder Section 148(1) of the Act for any of the services rendered by the Company.Accordingly paragraph 3(vi) of the Order is not applicable to the Company.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted / accrued in the books ofaccount in respect of undisputed statutory dues including provident fund employees' stateinsurance income tax service tax duty of customs value added tax goods and servicetax cess and other material statutory dues have generally been regularly deposited duringthe year by the Company with the appropriate authorities. As explained to us the Companydid not have any dues on account of sales tax and duty of excise. According to theinformation and explanations given to us no undisputed amounts payable in respect ofprovident fund employees' state insurance income tax service tax duty of customsvalue added tax goods and service tax cess and other material statutory dues were inarrears as at 31 March 2019 for a period of more than six months from the date they becamepayable.

(b) According to the information and explanations given to us there are no materialdues of duty of customs and value added tax which have not been deposited with theappropriate authorities on account of any dispute. However according to the informationand explanations given to us the following dues of income tax and service tax have notbeen deposited by the Company on account of disputes:

Name of the Statute Nature of Dues Amount disputed (Rs. in lakhs) Amount paid under protest (Rs. in lakhs) Period to which amount relates (Assessment year) Forum where dispute is pending
Income - tax Act 1961 Income tax and Interest 21.72 21.72 1999 -00 and 2000 -01 Supreme Court
Income - tax Act 1961 Income tax 3.96 0.91 2004 -05 Income Tax Appellate Tribunal
Income - tax Act 1961 Income tax and interest 70.31 - 2005 -06 High Court of Karnataka
Income - tax Act 1961 Income tax and interest - 333.27 2006 -07 CIT (Appeals)
Income - tax Act 1961 Income tax and interest 532.31 - 2006 -07 High Court of Karnataka
Income - tax Act 1961 Interest 15.78 - 2008 -09 CIT (Appeals)
Income - tax Act 1961 Income tax and interest 24.35 24.35 2009 -10 and 2010 -11 High Court of Karnataka
Income - tax Act 1961 Income tax and interest 210.11 210.11 2011 -12 Income Tax Appellate Tribunal
Income - tax Act 1961 Income tax and interest 508.27 - 2011 -12 CIT (Appeals)
Income - tax Act 1961 Income tax and interest 55.59 11.12 2014 -15 CIT (Appeals)
Income - tax Act 1961 Income tax and interest 6818.49 - 2016 -17 CIT (Appeals)
Income - tax Act 1961 Income tax and interest 0.26 - 2016 -17 CIT (Appeals) to be filed
Canadian Income tax Laws Income tax 158.46 - 2001 -02 to 2008 -09 Canadian Revenue Agency
Canadian Income tax Laws Income tax and interest 3.50 3.50 2011 -12 and 2012 -13 Canadian Revenue Agency
Service Tax Rules 1994 Service tax and penalty 2592.94 - 2006 -07 and 2007-08 CESTAT Bengaluru
Service Tax Rules 1994 Service tax and penalty 114.60 - 2007 -08 and 2008 -09 CESTAT Bengaluru
Service Tax Rules 1994 Service tax and penalty 123.84 - 2010 -11 and 2011 -12 CESTAT Bengaluru
Service Tax Rules 1994 Service tax and penalty 42.80 - 2011 -12 to 2013 -2014 Commissioner (Appeals)
Service Tax Rules 1994 Service tax and penalty 16.17 - 2009 -10 to 2013 -14 CESTAT Bengaluru
Service Tax Rules 1994 Service tax 64.04 - July 2014 -June -2018 CESTAT Bengaluru
Service Tax Rules 1994 Service tax 16.63 - Oct -2012 - June 2018 CESTAT Bengaluru
Service Tax Rules 1994 Service tax 35.89 - April -2016 - June 2018 CESTAT Bengaluru

(viii) The Company does not have any loans or borrowings from any financialinstitution banks government or debenture holders during the year. Accordinglyparagraph 3(viii) of the Order is not applicable.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) and term loans during the year. Accordinglyparagraph 3 (ix) of the Order is not applicable.

(x) According to the information and explanations given to us no fraud by the Companyor any material fraud on the Company by its officers or employees has been noticed orreported during the course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid / provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company. Accordingly paragraph 3(xii) of the Order is notapplicable.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransactions have been disclosed in the financial statements (xiv) According to theinformation and explanations given to us and based on our examination of the records ofthe Company theCompany has not made any preferential allotment or private placement ofshares or fully or partly convertible debentures during the year.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into non- cashtransactions with directors or persons connected with it. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) According to the information and explanations given to us and based on ourexamination of the records of the Company it is not required to be registered underSection 45- IA of the Reserve Bank of India Act 1934.

for B S R & Associates LLP

Chartered Accountants

Firm's Registration Number: 116231W/W-100024

Rushank Muthreja

Partner

Membership No. 211386

Bengaluru 23 April 2019

Annexure B to the Independent Auditors' Report on the Standalone Financial Statements

Report on the internal financial controls with reference to the aforesaid StandaloneFinancial Statements under Clause (i) of Sub - section 3 of Section 143 of the CompaniesAct 2013 Opinion

We have audited the internal financial controls with reference to the financialstatements of Sasken Technologies Limited (‘the Company') as of 31 March 2019 inconjunction with our audit of the Standalone Financial Statements of the Company for theyear ended on that date.

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31 March 2019 based on the internal financial controls withreference to the financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India (the "Guidance Note").

Management's responsibility for internal financial controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal financial controls withreference to the financial statements criteria established by the Company considering theessential components of internal control stated in the Guidance Note. 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 (hereinafter referred to as"the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to the financial statements based on our audit. We conducted ouraudit in accordance with the Guidance Note and the Standards on Auditing prescribed underSection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to the financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tothe financial statements were established and maintained and whether such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to the financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference to thefinancial statements included obtaining an understanding of such internal financialcontrols assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk.

The procedures selected depend on the auditor's judgement including the assessment ofthe risks of material misstatement of the Standalone Financial Statements whether due tofraud 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 withreference to the financial statements.

Meaning of internal financial controls over financial statements

A company's internal financial controls with reference to the financial statements 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 controlswith reference to the financial statements include those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorisations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

Inherent Limitations of Internal Financial Controls with reference to the FinancialStatements

Because of the inherent limitations of internal financial controls with reference tothe financial statements 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 withreference to the financial statements to future periods are subject to the risk that theinternal financial controls with reference to the financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

for B S R & Associates LLP

Chartered Accountants

Firm's Registration Number: 116231W/W-100024

Rushank Muthreja

Partner

Membership No. 211386

Bengaluru

23 April 2019