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Silicon Valley Infotech Ltd.

BSE: 531738 Sector: Financials
NSE: PRASGLOFIN ISIN Code: INE913A01024
BSE 00:00 | 02 Aug Silicon Valley Infotech Ltd
NSE 05:30 | 01 Jan Silicon Valley Infotech Ltd
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Silicon Valley Infotech Ltd. (PRASGLOFIN) - Auditors Report

Company auditors report

To

The Members of

SILICON VALLEY INFOTECH LIMITED Report on the Ind AS Financial Statements Opinion

We have audited the accompanyingInd ASfinancial statements of SILICON VALLEYINFOTECH LIMITED ("the Company") which comprises the BalanceSheet as at March 31 2020 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of changes in Equity and the Statement of Cash Flowsfor the year then ended and notes to theInd AS financial statements including a summaryof significant accounting policies and other explanatory information of the Company.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the possible effects of the matter described in the basis forqualified opinion paragraph the aforesaid Ind AS financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the Indian Accounting Standardsprescribed under section 133 of the Act read with the Companies (India AccountingStandards) Rules 2015 as amended ("Ind AS") and other accounting principlesgenerally accepted in India of the state of affairs of the Companyas at March 31 2020its loss (Including Other Comprehensive Income) Changes in Equityand its cash flows forthe year ended on that date.

Basis for Qualified Opinion

Attention is drawn to Note No 23. The company has obtained a loan of Rs. 270.59 Lacsfrom Rural Electrification Corporation Ltd (REC Ltd) in respect of wind mill projectsagainst security of land having book value Rs. 13.68 Lacs and the windmill thereon havingnil depreciated value. The said land and windmill have been auctioned under order ofRecovery Officer DRT Delhi which has been challenged by company before AppellateAuthority. Certain Listed Shares of the Company were also lien against the loan with theREC Ltd. The said land and windmill have beenauctioned under order of Recovery OfficerDRT Delhi which has been challenged by company before Appellate Authority and the saidshares have got transferred by virtue of order of Recovery Officers DRT Delhi.

Pending order of the Appellate Authority the Company has not made any adjustment inthe accounts in respect of said land windmill related loan obtained from REC Ltd andShares Investments. The Company has deposited Rs. 100 Lacs as per order of Delhi HighCourt. In absence of adequate information impact thereof on Financial Statements is notascertainable.

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 ofthefinancial statements under the provisions of the Companies Act 2013 and the Rulesthere under and we havefulfilled our other ethical responsibilities in accordance withthese requirements and the ICAI's Code of Ethics. We believe that the audit evidence wehave obtained is sufficient and appropriate to provide a basis for our opinionon IndASFinancial Statements.

Emphasis of Matter

Attention is invited to Note No 15to theInd AS financial statements which explains themanagement assessment of the financial impact due to COVID-19 pandemic consequently thereis a high level of uncertainty about the time required for life and business to getnormal.

The World Health Organization declared the Novel Corona virus disease (COVID-19) aglobal pandemic on 11th March 2020. The impact of the disease is being felt in India aswell and the central government on 24th March 2020 imposed stringent lockdown in a bidto contain the spread of the disease restricted travel mandated extreme ‘socialdistancing' measures and reduced demand supply chains to only those that are‘essential'. The effect of corona virus (Covid-19) outbreak on public life andindustries is also affecting the demand for the company's product in the country acrossseveral market segments. The economic impact of the 2020 coronavirus pandemic in India hasbeen largely disruptive. India's growth in the fourth quarter of the fiscal year 2020 wentdown to 3.1% according to the Ministry of Statistics.

While the pandemic is expected to have negative impact on the financial performance ofcompany in the current year the situation in the country still remains uncertain andtherefore it is difficult to quantify the magnitude and duration of such impact at thisstage. Despite the negative outlook for the global and domestic economy the responsiveaction by the Indian government with supportive monetary policy are expected to improvethe business environment in India and should help build a better foundation for aneconomic resurgence post COVID-19.

However our opinion is not modified on above matter.

Key Audit Matters :

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Ind AS financial statements for the financial year endedMarch 31 2020. These matters were addressed and communicated with management in thecontext of our audit of the Ind AS financial statements as a whole and in forming ouropinion thereon and we do not provide a separate opinion on these matters.

We have determined the matters described below to be the Key audit matters to becommunicated in our report.We have fulfilled the responsibilities described in theAuditors' responsibilities for the audit of the Ind AS Financial Statements section of ourreport including in relation to these matters. Accordingly our audit included theperformance of procedures designed to respond to our assessment of the risks ofmaterialmisstatement of the Ind AS Financial Statements. The results of our auditprocedures including the procedures performed to address the matters below provide thebasis for our audit opinion on the accompanyingInd AS Financial Statements.

Sl. No. Key Audit Matter Auditor's Response
1. IT systems and controls
Financial accounting and reporting processes especially in the financing activities are fundamentally reliant on IT systems and IT controls to process significant transaction volumes hence we identified IT systems and controls over financial reporting as a key audit matter for the Company. We tested the operating effectiveness of the Company's IT access controls over the information systems that are important to financial reporting and various interfaces configuration and other identified application controls.
2. First time adoption of Ind AS
The Company has adopted Ind AS from 1 April 2019 with an effective date of 1 April 2018 for such transition. For periods up to and including the year ended 31 March 2019 the Company had prepared and presented its financial statements in accordance with the erstwhile generally accepted accounting principles in India (Indian GAAP). To give effect of the transition to Ind AS these financial statements for the year ended 31 March 2020 together with the comparative financial information for the previous year ended 31 March 2019 and the transition date Balance Sheet as at 1 April 2018 have been prepared under Ind AS. Read the Ind AS impact assessment performed by the Management and the resultant changes made to the accounting policies considering the requirements of the new framework.
Evaluated the exemptions and exceptions allowed by Ind AS and applied by the Management in applying the first-time adoption principles of Ind AS 101 in respect of fair valuation of assets and liabilities existing as at transition date.
The transition has involved significant change in the Company's policies and processes for financial reporting including generation of supportable information and applying estimates to inter alia determine impact of Ind AS on accounting and disclosure requirements prescribed under extant Reserve Bank of India (RBI) directions. In view of the complexity involved Ind AS transition and the preparation of financial statements subsequent to the transition date have been areas of key focus in our audit. Tested the accounting adjustments posted as at the transition date and in respect of the previous year to convert the financial information reported under erstwhile Indian GAAP to Ind AS. Tested the disclosures prescribed under Ind AS.

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

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Annual Reportbut does not include the Ind AS Financial Statements and our auditors' report thereon. TheAnnual report for the year ending March 31 2020 is expected to be made available to usafter the date of this auditor's report.

Our opinion on the Ind AS financial statements does not cover the other information andwe will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

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

Responsibility of Management and Those charged with Governance for the Ind AS FinancialStatements

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 the equity of the Company in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards (Ind AS) specifiedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of 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 financial statement that give a true and fair view andare free from material misstatement whether due to fraud or error.

In preparing theInd 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.

Those Board of Directors are also responsible for overseeing the company's financialreporting process

Auditor's Responsibility for the Audit of the Ind ASFinancial Statements

Our objectives are to obtain reasonable assurance about whether theInd 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 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 Ind AS 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 controls 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 system in place and the operating effectiveness ofsuch 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 ability ofthe Company to continue as a going concern. If we conclude that a material uncertaintyexists we are required to draw attention in our auditor's report to the relateddisclosures in theInd AS financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditor's report. However future events or conditions may cause the Companyto cease to continue as a going concern.

• Evaluate the overall presentation structure and content of theInd AS financialstatements including the disclosures and whether the Ind ASfinancial statementsrepresent 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 theInd AS financial statements ofthe current year 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

(i) As required by the Companies (Auditors Report) order 2016 ( the Order) issued bythe Central Government of India in terms of section 143 (11) of the Act we give in the"Annexure A" a Statement on the matters specified in paragraph 3 and 4 of theorder to the extent applicable

(ii) 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 purpose of our audit;

(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss (Including Other ComprehensiveIncome) the Cash Flow Statement and Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account;

(d) In our opinion the aforesaid Ind AS financial statements comply with the Ind ASspecified under Section 133 of the Act read with the Companies (Indian AccountingStandards) Rules 2015 as amended;

(e) On the basis of written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the Directors aredisqualified as on 31st 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 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";

(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 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.

(h) With respect to the other matters to be includes 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 Companyhas disclosed the impact of pending litigations on its financial positionin its Ind ASfinancial statements;

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

iii. There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company at the end of the year.

For DEOKI BIJAY & CO.

Chartered Accountants

Firm's Registration No. 313105E
D. N. Agrawal

Partner

Place : Kolkata Membership No. 051157
Date : 21st July 2020 UDIN : 20051157AAAAAZ9713

Annexure A to the Independent Auditors' Report

Referred to Paragraph 1 under "Report on Other Legal and RegulatoryRequirements" section in the Independent Auditor's Report of even date on the Ind ASfinancial statements of SILICON VALLEY INFOTECH LIMITED for the year ended 31stMarch 2020 we report that :

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

(b) Land and windmill thereon were secured against Loan given by REC Ltd have beenauctioned under order of Recovery Officer DRT which has been challenged by Company beforeAppellate Authority.

(ii) The Company has carried out physical verification of inventory at reasonableintervals. As per the information and explanations given to us no material discrepancieswere noticed during such verification.

(iii) (a) The Company has not granted any loans secured or unsecured to companiesfirms Limited Liability Partnerships or other parties covered in the register maintainedunder section 189 of the Companies Act 2013.

(b) As the Company has not given any loans clause iii(a) iii(b) and clause iii(c) ofparagraph 3 of ‘the order' are not applicable to the Company.

(iv) TheCompany has not granted any loans investments guarantee and security to anyperson falling under section 185 and 186 of the companies act 2013. Thus paragraph 3(iv)of the Order is not applicable to the Company.

(v) The Company has not accepted any deposits and therefore the directives issued bythe Reserve Bank of India and the provisions of section 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the rules formed thereunder are not applicableto the Company.

(vi) The Central Government has not prescribed the maintenance of cost records underSection 148(1) of the Act for any of the product/services rendered by the Company.

(vii) (a) According to information and explanation given to us and as per the recordsof the Company examined by us the Company is regular in depositing with appropriateauthorities undisputed statutory dues including Provident Fund Employees' StateInsurance Income-tax Goods and Service tax cess and other statutory dues applicable toit.

(b) According to information and explanation given to us and as per the records of theCompany examined by us following undisputed amounts payable in respect of Income Tax inarrears as at March 31 2020 for a period of more than six months from the date theybecame payable :

Name of the Statute Amount (Rs.) Period to which the amount relates
Income Tax Act 1961 177044/- Asst Year 2004-2005
Income Tax Act 1961 1778/- Asst Year 2007-2008
Income Tax Act 1961 5471/- Asst Year 2010-2011

c) According to the information and explanations given to us there are no dues ofProvident fund Employees' State Insurance Income Tax Goods and Service Tax (GST) cesswhich have not been deposited on account of any dispute of the Company as at 31st March2020.

(viii) Details of default in repayment of dues from Financial Institution : Particulars: Loan taken from REC Ltd Amount of Default : Rs. 27059000/-

Period of Default : As per information received from the management the company is notin default as only 90% of loan was disbursed and 10% was never disbursed.

Remarks if any : The Company had taken loan from REC Ltd of Rs. 27059000/- in thefinancial year 1994. REC has filed case in the Delhi High Court which has been challengedby the Company. As Per directives received from the Delhi High Court the Company hasdeposited Rs. 10000000/-.

(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) During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India we haveneither come across any instance of fraud by the Company or any fraud on the Company byits officers or employees noticed or reported during the year nor have we been informedof any such instance by the management.

(xi) In our opinion and according to the information and explanations given to us andbased on examination of records of the Company the managerial remuneration has beenprovided in accordance with the requisite approvals mandated by the provisions of section197 read with Schedule V to the Companies Act 2013.

(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 wherever applicable.

(xiv) According to the information and explanations give 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. Accordingly paragraph 3(xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and the records of theCompany examined by us the Company has not entered into non-cash transactions withdirectors or persons connected with him. Accordingly paragraph 3(xv) of the Order is notapplicable.

(xvi) The Company is a Non-Banking Financial Institution without accepting PublicDeposits registered under section 45-IA of the Reserve Bank of India Act 1934 havingvalid Certificate of Registration.

For DEOKI BIJAY & CO.

Chartered Accountants

Firm's Registration No. 313105E
D. N. Agrawal

Partner

Place : Kolkata Membership No. 051157
Date : 21st July 2020 UDIN : 20051157AAAAAZ9713

Annexure B to the Independent Auditor's Report

Referred to in paragraph 2(f) under ‘Report on Other Legal and RegulatoryRequirements' section in our Independent Auditor's Report of even date on the Ind ASfinancial statements of SILICON VALLEY INFOTECH LIMITED for the year ended 31stMarch 2020.

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 SILICONVALLEY INFOTECH LIMITED ("the Company") as on 31st March 2020in conjunction with our audit of the Ind AS financial statements of the Company for theyear ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls over Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the Company policies the safe guarding 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.

Auditors' 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') and the Standards on Auditing issued by ICAI and deemed to beprescribed under Section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting were established and maintained and if suchcontrols 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 operativeeffectiveness. Our audit of internal Financial Controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor'sjudgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion of the Company's internal financial controls systemover financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A Company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purpose 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 responsible detail accurately and fairy reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are records as necessary to permit preparation of financial statements inaccordance with authorizations of the Management and directors of the Company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the Company's assets that could have a material effecton 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 nor be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future period are subject to the risk that the internal financial controlover financial reporting may become inadequate because of change in conditions or thatthe degree of compliance with the 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 maintained in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2020 based on theinternal control over financial reporting criteria established by the Companysconsideringthe essential components of internal controls stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For DEOKI BIJAY & CO.

Chartered Accountants

Firm's Registration No. 313105E
D. N. Agrawal

Partner

Place : Kolkata Membership No. 051157
Date : 21st July 2020 UDIN : 20051157AAAAAZ9713

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