Silicon Valley Infotech Ltd.
|BSE: 531738||Sector: Financials|
|NSE: PRASGLOFIN||ISIN Code: INE913A01024|
|BSE 00:00 | 01 Jun||Silicon Valley Infotech Ltd|
|NSE 05:30 | 01 Jan||Silicon Valley Infotech Ltd|
|BSE: 531738||Sector: Financials|
|NSE: PRASGLOFIN||ISIN Code: INE913A01024|
|BSE 00:00 | 01 Jun||Silicon Valley Infotech Ltd|
|NSE 05:30 | 01 Jan||Silicon Valley Infotech Ltd|
TO THE MEMBERS OF SILICON VALLEY INFOTECH LIMITED
Report on the Audit of the Financial Statements
We have audited the accompanying financial statements of SILICON VALLEY INFOTECHLIMITED ("the Company") which comprise the Balance Sheet as at 31st March2019 the statement of Profit and Loss and the Statement of Cash Flows for the year thenended and notes to the financial statements including a summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the financial statements").
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 financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the accounting principles generally acceptedin India of the state of affairs of the Company as at March 31 2019 its loss and itscash flows for the year ended on that date.
Basis for Qualified Opinion
Attention is drawn to Note No 26. 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 been auctioned 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 of financial statements in accordance with the Standards onAuditing ("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 Financial Statements section of our report. We areindependent of the Company in accordance with the Code of Ethics issued by the Instituteof Chartered Accountants of India ("ICAI") together with the ethicalrequirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules made there under and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence we have obtained is sufficient and appropriateto provide a basis for our qualified opinion on the financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion 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 :
Key Audit Matter : The Company is into the business of Non Banking Financingactivities. The Company's Employees Benefit expenses having total value of Rs 2424687/-for the year ended 31.03.2019 represent a significant amount in the Statement of Profitand Loss Account . The assessment of the these expenses is a key audit matter.
Auditor's Approach : In view of the significance of the matter we applied followingaudit procedures in this area :
1. We checked on test basis entries to identify whether provision related to allemployees have been made.
2. The Employees are in Company for long and we found that all statutory liabilitiesrelated to PF and ESI of the employees are paid timely.
Information Other than the 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 Company's annual report but doesnot include the financial statements and our auditor's report thereon. The ManagementDiscussion and Analysis Directors' Report including Annexures to Directors' Report andReport on Corporate Governance are expected to be made available to us after the date ofthis auditor's report.
Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.
In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated.
When we read the annual report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance andtake appropriate action as applicable under the relevant laws and regulations..
Management's responsibility for the 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 financial statementsthat give a true and fair view of the financial position financial performance (includingother comprehensive income) changes in equity and cash flows of the Company in accordancewith the accounting principles generally accepted in India including the AccountingStandards specified under section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding of theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompany'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 financialreporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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 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 financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions 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.
Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143(3) of the Act we report that :
(a) We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books and proper returnsadequate for the purposes of our audit have been received from the branches not visited byus.
(c) The Balance Sheet the Statement of Profit and Loss and the Statement of Cash Flowsdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
(e) The matter described in the Basis for Qualified Opinion paragraph above in ouropinion may have an adverse effect on the functioning of the Company.
(f) On the basis of written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the Directors aredisqualified as on 31st March 2019 from being appointed as a Director in terms of section164(2) of the Act.
(g) The qualification relating to the maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph above.
(h) With respect to the adequacy of the internal financial controls over financialreporting of the Company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B".
(i) With respect to the other matters to be included in the Auditor's Report as pernotification number G.S.R. 463(E) dated 5th June 2015 issued by Ministry of CorporateAffairs section 197(16) of the Act regarding the Managerial remuneration :
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.
(j) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 (as amended) inour opinion and to the best of our information and according to the explanations given tous :
i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 26 to the financial statements;
ii. The Company did not have any long-term contracts including derivative contracts 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.
Annexure A to Independent Auditors' Report
Referred to Paragraph 1 under the heading of "Report on Other Legal and RegulatoryRequirements" of our report of even date
i. In respect of the Company's fixed assets :
(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 during the year atreasonable intervals.
As per the information and explanations given to us no material discrepancies werenoticed during such verification.
iii. In our opinion and according to the information and explanations given to us theCompany has not granted any loans secured or unsecured to companies firms or otherparties covered in the register maintained under section 189 of the Companies Act 2013 .Accordingly Clause 3(iii) of the Order is not applicable to the Company.
iv. In our opinion and according to the information and explanations given to us theCompany has not given loan to any director in accordance with the provisions of Section185 of the Companies Act 2013. The Company has not given any loans or guarantees andbeing a Non-banking financial company its investments are exempted under section 186(11)hence the Company has complied with the provisions of Section 185 and 186 of the Act asapplicable.
v. The Company has not accepted any deposits from the public within the meaning ofSections 73 to 76 of the Companies Act 2013 and any other relevant provisions of the Actand the relevant rules framed there under.
vi. As per the information and explanations given to us the Central Government has notprescribed the maintenance of cost records under section 148(1) of the Companies Act 2013. Accordingly Clause 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 records of the Company Income Tax Goods and Services Tax and anyother statutory dues have been regularly deposited during the year by the Company withappropriate authorities.
According to the information and explanations given to us following undisputed amountspayable in respect of Income Tax in arrears as at March 31 2019 for a period of more thansix months from the date they became payable :
(b) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company there are no dues which have not been depositedby the company on account of disputes.
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. In our opinion and according to the information and explanations given to us theCompany did not raise any money by way of initial public offer or further public offer(including debt instruments) and term loans during the year. Accordingly Clause 3(ix) ofthe Order is not applicable.
x. To the best of our Knowledge and according to the information and explanation givento us no fraud by the company or on the Company by its officers or employees has beennoticed or reported during the year.
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. According to the information and explanations given to us in our Opinion theCompany is not a nidhi company. Accordingly Clause 3(xii) of the Order is not applicableto the Company.
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 and details of suchtransactions have been disclosed in the Note No. 27 of the notes to the financialstatements as required by the applicable accounting standards.
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 based on ourexamination of the records of the Company the Company has not entered into non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable to the Company.
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.
Annexure B to Independent Auditor's Report
Referred to Paragraph 2(h) under the heading of "Report on Other Legal andRegulatory Requirements" of our report of even date
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 SILICONVALLEY INFOTECH LIMITED ("the Company") as of 31st March 2019 inconjunction with our audit of the financial statements of the Company for the year endedon 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 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.
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") issued by the Institute of Chartered Accountants of Indiaand the Standards on Auditing prescribed under section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate Internal FinancialControls over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting 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's judgment 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 on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
Company's internal financial control over financial reporting is a process designed toprovide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that :
(1) pertain to the maintenance 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 financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance 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 financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion and to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting and such internal financial controls overfinancial reporting were operating effectively as at 31st March 2019 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.