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Sasken Technologies Ltd.

BSE: 532663 Sector: IT
NSE: SASKEN ISIN Code: INE231F01020
BSE 00:00 | 12 May 960.55 4.00
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NSE 00:00 | 12 May 959.70 -3.85
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OPEN 975.55
PREVIOUS CLOSE 956.55
VOLUME 652
52-Week high 1063.10
52-Week low 376.35
P/E 13.47
Mkt Cap.(Rs cr) 1,446
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 975.55
CLOSE 956.55
VOLUME 652
52-Week high 1063.10
52-Week low 376.35
P/E 13.47
Mkt Cap.(Rs cr) 1,446
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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 March2020 the standalone statement of profit and loss (including other comprehensive income)standalone statement of changes in equity and standalone statement of cash flows for theyear then ended and notes to the standalone financial statements including a summary ofthe significant accounting policies and other explanatory information. In our opinion andto the best of our information and according to the explanations given to us theaforesaid standalone financial statements give the information required by the CompaniesAct 2013 ("Act") in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31 March 2020 and profit and its cash flows for the yearended 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 withthe Code of Ethics issued by the Institute of Chartered Accountants of India together withthe ethical requirements that are relevant to our audit of the standalone financialstatements under the provisions of the Act and the Rules thereunder and we have fulfilledour other ethical responsibilities in accordance with these requirements and the Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto 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.

The key audit matter How the matter was addressed in our audit
Accuracy of revenue recognition in respect of fixed price contracts (Refer Note 28 to the financial statements) In view of its significance we applied the following audit procedures in this matter among others to obtain sufficient appropriate audit evidence:
• Obtaining an understanding the systems processes and controls implemented by the Company with respect to recognition of actual cost incurred on each contract (including allocation and apportionment) estimation of future cost to completion estimation of provision for onerous contract measurement of unbilled revenue unearned revenue and the total contract revenue on its completion. .
The Company engages in fixed price contracts with its customers where revenue from each contract is recognised based on percentage of completion. This involves computation of actual cost incurred and estimation of total cost on each contract to measure progress towards completion (the input method).
• Involving Information technology ('IT') specialists to assess the design and operating effectiveness of key IT controls relating to revenue recognition and in particular:
Accuracy of revenue recognition in respect of fixed price contracts has been identified as a Key Audit Matter considering that: • IT environment in which the business systems operate including access controls program change controls program development controls and IT operation controls;
• these contracts involve identification of actual cost incurred on each contract including allocation and apportionment; • Access and application controls pertaining to time recording and allocation systems which prevent unauthorised changes to recording of costs and revenue.
• these contracts require estimation of future cost-to-completion of each contract as well as critical estimates to make provision for onerous contract; • For selected samples of fixed contracts -
• Evaluated the contractual terms to identify the performance obligation and assessed the basis of revenue recognition;
• Checked the approval for estimates of cost to completion by authorised personnel of the Company;
• at year-end a significant amount of contract assets (unbilled revenue) and contract liabilities (unearned revenue) related to each contract is to be identified.
• Carried out a retrospective assessment of costs incurred with estimated costs to identify any significant variation and checked whether those variations have been considered in estimating the remaining costs to complete the contract; and
• Verified the contract assets and contract liabilities on balance sheet by evaluating the underlying documentation to identify possible delays in achieving milestones which require change in estimated costs to complete the remaining performance obligations;
• Checked journal entries impacting the revenue recognition for the period selected based on specified risk-based criteria.
• Checked the adequacy of provision in respect of onerous contracts.
The key audit matter How the matter was addressed in our audit
Evaluation of Uncertain Tax Position Taxation (direct) (Refer Note 33 to the financial statements) In view of its significance we applied the following audit procedures in this matter to obtain sufficient appropriate audit evidence:
We along with our internal tax experts
The Company is required to estimate its income tax liabilities according to the Income Tax Act 1961. There are significant matters of interpretation in terms of application of tax laws and rules to determine current and deferred taxes. The Company's tax positions are challenged by the tax authorities on a range of tax matters. The Company has uncertain tax positions relating to some of the matters. This requires the Company to make significant judgements to determine the possible outcome of uncertain tax positions. These may have consequent impacts on the accounting and disclosures in the financial statements. • read and analyzed select key correspondences external legal opinions / consultations by the Company and relevant legal precedence and other rulings;
• evaluated the Company's key underlying assumptions in estimating the tax provisions and deferred taxes;
• assessed the Company'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 standalone financial statements and our auditors'report thereon.

Our opinion on the standalone financial statements does not cover the other informationand 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 Accounting Standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• 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 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 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 ourauditors' 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.

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 the Orderto the extent applicable.

2. (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 standalonestatement of cash flows dealt with by this Report are in agreement with the books ofaccount.

d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on 31March 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2020 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 2020 onits financial position in its standalone financial statements - Refer Note 33 to thestandalone financial statements;

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 required to be transferred tothe Investor Education and Protection Fund by the Company.

(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 explanation given to us during thecurrent year the remuneration paid by the company to its directors is in accordance withthe provisions of Section 197 of the Act. The remuneration paid to any director is not inexcess of the limit laid down under Section 197 of the Act. The Ministry of CorporateAffairs has not prescribed other details under Section 197(16) which are required to becommented upon by us.

for B S R & Associates LLP
Chartered Accountants
Firm's Registration Number: 116231W/W-100024
Ashish Chadha
Partner
Membership No. 500160
Place: Bengaluru UDIN: 20500160AAAAAS1305
Date: 27 April 2020

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 2020. 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 a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified once in a period of three years. In our opinion thisperiodicity of physical verification is reasonable having regard to the size of theCompany and the nature of its assets. During the current year no material discrepancieswere noticed 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.

In respect of immovable properties been taken on lease and disclosed as property plantand equipment (including Right of Use assets) in the financial statements the leaseagreements are 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 opinion andaccording 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 opinion and according to information and explanations given to us theCompany has complied with the provisions of Section 185 and 186 of the Act with respectto the loans given investments made. Further there are no guarantees and security givenin respect of which provisions 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 the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income tax service taxduty of customs value added tax goods and service tax cess and other material statutorydues were in arrears as at 31 March 2020 for a period of more than six months from thedate they became payable.

(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 (Rs. In lakhs) - Disputed Tax Amount Paid (Rs. In lakhs) - Paid under protest Period to which the amount relates
Income Tax Act 1961 Income taxes and Interest 21.72 21.72 AY 1999-00 & 2000-01
Income Tax Act 1961 Income taxes 3.96 0.91 AY 2004-05
Income Tax Act 1961 Income taxes and Interest 178.99 - AY 2006-07
Income Tax Act 1961 Income taxes and Interest 35.33 - AY 2006-07
Income Tax Act 1961 Income taxes and Interest 24.35 24.35 AY 2009-10 & 2010-11
Income Tax Act 1961 Income taxes and Interest 210.11 275.24 AY 2011-12
Income Tax Act 1961 Income taxes and Interest 2727.42 - AY 2011-12
Income Tax Act 1961 Income taxes 508.27 - AY 2011-12
Income Tax Act 1961 Income taxes and Interest 72.91 - AY 2013-14
Income Tax Act 1961 Income taxes and Interest 55.59 11.12 AY 2014-15
Income Tax Act 1961 Income taxes and Interest 7624.28 1363.70 AY 2016-17
Income Tax Act 1961 Income taxes and Interest 0.35 0.35 AY 2016-17
Income Tax Act 1961 Income taxes and Interest 1015.59 - AY 2017-18
Income Tax Act 1961 Income taxes 108.57 - AY 2017-18
Income Tax Act 1961 Income Tax and Interest 3.60 3.60 A.Y. 2011-12 & 2012-13
Service Tax Rules 1994 Service Tax and Penalty 2592.94 125.00 FY 2005-07
Service Tax Rules 1994 Service Tax and Penalty 114.60 - FY 2007-09
Service Tax Rules 1994 Service Tax and Penalty 15.50 - FY 2009 -14
Service Tax Rules 1994 Service Tax and Penalty 123.84 - FY 2009-11

(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 year.

(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 as required by the applicableaccounting standards.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe 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 explanation 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
Ashish Chadha
Partner
Membership No. 500160
Place: Bengaluru UDIN: 20500160AAAAAS1305
Date: 27 April 2020

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 ("the Act")

(Referred to in paragraph 1 (A) (f) under 'Report on Other Legal and RegulatoryRequirements' section of our report of even date) Opinion

We have audited the internal financial controls with reference to the financialStatements of Sasken Technologies Limited ('the Company') as of March 31 2020 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 2020 based on the internal financial controls withreference to 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 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 ('the Act').

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin 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 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 tofinancial statements were established and maintained and whether such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of such internal financial controlsassessing 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 judgement including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.

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 financial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

A company's internal financial controls with reference to 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 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 FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial 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 financial statements to future periods are subject to the risk that theinternal financial controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

for B S R & Associates LLP
Chartered Accountants
Firm's Registration Number: 116231W/W-100024
Ashish Chadha
Partner
Membership No. 500160
Place: Bengaluru UDIN: 20500160AAAAAS1305
Date: 27 April 2020

   

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