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Softsol India Ltd.

BSE: 532344 Sector: IT
NSE: N.A. ISIN Code: INE002B01016
BSE 00:00 | 26 Feb 24.15 1.15
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NSE 05:30 | 01 Jan Softsol India Ltd
OPEN 24.00
PREVIOUS CLOSE 23.00
VOLUME 200
52-Week high 33.45
52-Week low 19.15
P/E 5.54
Mkt Cap.(Rs cr) 41
Buy Price 22.00
Buy Qty 50.00
Sell Price 24.00
Sell Qty 50.00
OPEN 24.00
CLOSE 23.00
VOLUME 200
52-Week high 33.45
52-Week low 19.15
P/E 5.54
Mkt Cap.(Rs cr) 41
Buy Price 22.00
Buy Qty 50.00
Sell Price 24.00
Sell Qty 50.00

Softsol India Ltd. (SOFTSOLINDIA) - Auditors Report

Company auditors report

TO THE MEMBERS OF SOFTSOL INDIA LIMITED

Report on the Audit of the Standalone Financial Statements Opinion

We have audited the accompanying standalone financial statements of M/s. SOFTSOL INDIALIMITED (“the Company”) which comprise the Balance Sheet as at March 31 2019the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of significant accounting policies and other explanatory information (hereinafterreferred to as “the standalone financial statements”).

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (“the Act”) in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended (“Ind AS”) and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2019 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We have audited the accompanying standalone financial statements of M/s. SOFTSOL INDIALIMITED (“the Company”) which comprise the Balance Sheet as at March 31 2019the Statement of Profit and Loss (including Other Comprehensive Income) the Statement ofChanges in Equity and the Statement of Cash Flows for the year ended on that date and asummary of significant accounting policies and other explanatory information (hereinafterreferred to as “the standalone financial statements”).

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Companies Act 2013 (“the Act”) in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended (“Ind AS”) and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2019 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

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. We have determined the matters described below to bethe key audit matters to be communicated in our report.

S.no Key Audit matter
1. Accuracy of recognition measurement presentation and disclosures of revenues and other related balances in view of adoption of INDAS115 “Revenue from contracts with customers”(new revenue accounting standard)
The application of the new revenue accounting standard involves certain key judgments relating to identification of distinct performance obligations determination of transaction price of the identified performance obligations the appropriateness of the basis used to measure revenue recognized over a period. Additionally new revenue accounting standard contains disclosures which involves collation of information in respect of disaggregated revenue and periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date.
Auditor's Response
Principal Audit Procedure
We assessed the Company's process to identify the impact of adoption of the new revenue accounting standard.
Our audit approach consisted testing of the design and operating effectiveness of the internal controls and substantive testing as follows :
• Evaluated the design of internal controls relating to implementation of the new revenue accounting standard.
• Selected a sample of continuing and new contracts and tested the operating effectiveness of the internal control relating to identification of the distinct performance obligations and determination of transaction price. We carried out a combination of procedures involving enquiry and observation reperformance and inspection of evidence in respect of operation of these controls.
• Tested the relevant information technology systems' access and change management controls relating to contracts and related information used in recording and disclosing revenue in accordance with the new revenue accounting standard.
• Selected a sample of continuing and new contracts and performed the following procedures :
- Read analyzed and identified the distinct performance obligations in these contracts.
- Compared these performance obligations with that identified and recorded by the Company.
- Considered the terms of the contracts to determine the transaction price including any variable consideration to verify the transaction price used to compute revenue and to test the basis of estimation of the variable consideration.
- Sample of revenues disaggregated by type and service offerings was tested with the performance obligations specified in the underlying contracts.
- Performed analytical procedures for reasonableness of revenues disclosed by type and service offerings.
We reviewed the collation of information and the logic of the report generated from the budgeting system used to prepare the disclosure relating to the periods over which the remaining performance obligations will be satisfied subsequent to the balance sheet date
2 Amendment in Objects Clause
With the Change in the Objects Clause of the Company the Lease Rental Income which was shown under Other Income has now Changed to the Revenue from Operations. Refer Note No.20 to the Standalone Financial Statements.
Auditor's Response
PRINCIPAL AUDIT PROCEDURE
We have verified the relevant documents and records pertaining to the case.

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

The Company's Board of Directors are responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's Information but does notinclude the standalone financial statements and our auditor's 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 during the course of our audit or otherwise appears to be materially misstated.

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

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act2013 with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in Indiaincluding The Indian Accounting Standard specified under sec.133 of the act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are 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 auditor's 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 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 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.

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

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

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

From the matters communicated with those charged with governance we determine thosematters 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 auditor's 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 Section 143(3) of the Act based on our audit we report that :

a. We have sought and obtained all the information and explanations which to the bestof our knowledge and belief were necessary for the purposes of our audit.

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

c. The Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account.

d. In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.

e. On the basis of the written representations received from the directors as on March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164 (2) of theAct.

f. 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 A”. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

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 year is in accordance withthe provisions of section 197 of the Act.

h. With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 as amended inour opinion and to the best of our information and according to the explanations given tous :

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements.

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

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

2. As required by the Companies (Auditor's Report) Order 2016 (“the Order”)issued by the Central Government in terms of Section 143(11) of the Act we give in“Annexure B” a statement on the matters specified in paragraphs 3 and 4 of theOrder.

For PAVULURI&Co.

Chartered Accountants

Firm Reg. No: 012194S

Place: Hyderabad

Date: 30/05/2019

(CA PA RAMAIAH)

PARTNER

M.No: F-203300

Annexure “A” to the Independent Auditor's Report

(Referred to in paragraph 1(f) under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of Softsol India Limited 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 M/s.Softsol India limited (“the Company”) as of March 31 2019 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.

Management's Responsibility for Internal Financial Controls

The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the “Guidance Note”) issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. 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 was 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 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 internal financial controls system overfinancial reporting of the Company.

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 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 ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

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.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2019 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For PAVULURI&Co.

Chartered Accountants

Firm Reg. No: 012194S

Place: Hyderabad

Date: 30/05/2019

(CA PA RAMAIAH)

PARTNER

M.No: F-203300

“Annexure B” to the Independent Auditors' Report

Referred to in paragraph 1 under the heading ‘Report on Other Legal &Regulatory Requirement' of our report of even date to the financial statements of theCompany for the year ended March 31 2019:

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

(b) The Fixed Assets have been physically verified by the management in a phasedmanner designed to cover all the items over a period of three years which in ouropinion is reasonable having regard to the size of the company and nature of itsbusiness. Pursuant to the program a portion of the fixed asset has been physicallyverified by the management during the year and no material discrepancies between the booksrecords and the physical fixed assets have been noticed.

(c) The title deeds of immovable properties are held in the name of the company.

2. The company has not acquired/handled/dealt in/held any inventory. Hence clause (ii)of paragraph 3 of the order is not applicable to the company for the year under report.

3. The Company has not granted any loans secured or unsecured to companies firmsLimited Liability partnerships or other parties covered in the Register maintained underSection 189 of the Act. Accordingly paragraph 3 (iii) (a) to (C) of the Order are notapplicable.

4. In our opinion and according to the information and explanations given to us thecompany has not given any loans guarantees and provided any security during the yearunder audit. In respect of investments made the company has complied with the provisionsof section 186 of companies Act 2013.

5. The Company has not accepted any deposits from the public and hence the directivesissued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any otherrelevant provisions of the Act and the Companies (Acceptance of Deposit) Rules 2015 withregard to the deposits accepted from the public are not applicable.

6. According to the information and explanations furnished to us the centralgovernment has not prescribed maintenance of cost records U/s.148(1)(d) of the CompaniesAct2013 to this company.

7. (a) According to the information and explanations given to us and the records of thecompany examined

by us the company is regular in depositing undisputed statutory dues includingProvident fund Employee State Insurance Income tax sales tax customs duty goods andservice tax and any other statutory dues as applicable with appropriate authorities. Therewere no arrears of outstanding statutory dues as on last day of the financial yearconcerned for a period of more than six months from the date on when they become payable.

(b) According to the information and explanation given to us there are no materialdues of Income Tax Goods and service Tax Duty of customs which have not been depositedon account of any dispute.

However according to the information and explanations given to us the followingservice tax amounts have not been deposited on account of disputes:

Sl. No Name of statute Nature of dues Period to which the amount relates Total amount of disputed dues (Rs.) Forum where dispute is pending Amount deposited (Rs.)
i) Finance Act 1994 (Service tax Provisions ) Service tax 2007-08 to 2011-12 618962/- CESTAT Bangalore 223544/-

8. In our opinion and according to the information and explanations given to us thecompany has not defaulted in repayment of loans or borrowing to financial institutionbank and Government. The company has not issued debentures.

9. According to the information and explanations given by the management the companyhas not raised moneys by way of initial public offer or further public offer includingdebt instruments and term Loans. Accordingly paragraph 3 (ix) of the Order are notapplicable.

10. According to the information and explanations given by the management to us nomaterial fraud by the Company or on the company by its officers or employees has beennoticed or reported during the course of audit.

11. According to the information and explanations to us and based on our examination ofthe records of the company the company has paid / provided for managerial remuneration inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Companies Act;

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

13. According to the information and explanations to us and based on our examination ofthe records of the company transactions with the related parties are in compliance withsection 177 and 188 of Companies Act2013 where applicable and the details of suchtransactions have been disclosed in the Financial Statements as required by the applicableaccounting standards.

14. According to the information and explanations to us and based on our examination ofthe records of the company the company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year.Accordingly paragraph 3 (xiv) of the Order are not applicable.

15. According to the information and explanations to us and based on our examination ofthe records of the company the company has not entered into any non-cash transactionswith directors or persons connected with him. Accordingly paragraph 3 (xv) of the Orderare not applicable.

16. In our opinion the company is not required to be registered under section 45-IA ofthe Reserve Bank of India Act 1934 and accordingly paragraph 3 (xvi) of the Order arenot applicable.

For PAVULURI&Co.

Chartered Accountants

Firm Reg. No: 012194S

Place: Hyderabad

Date: 30/05/2019

(CA PA RAMAIAH)

PARTNER

M.No: F-203300