To the Members of SOUTHERN INFOSYS LIMITED
Report on the Audit of the Financial Statements
We have audited the accompanyingfinancial statements of SOUTHERNINFOSYS LIMITED("the Company") which comprise the Balance Sheet as at 31stMarch2020and the Statement of Profit and Loss Statement of Changes in Equity and the Cash FlowStatement for the year then ended and notes to the financial statements including asummary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to theexplanations given to
usexceptforthepossibleeffectsofthematterdescribedintheBasisforQualifiedOpinionparagraph the aforesaid financial statements give the information required by theCompanies Act 2013 in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in Indiaof the state of affairs of theCompany as at March 31 2020 and its profit changes in equity and its cash flows for theyear ended on that date.
(a) In the case of the Balance Sheet of the State of Affairs of theCompany as at March 31 2020; and
(b) In the case of Statement of Profit and Loss account of the lossfor the year ended on date March 31 2020.
(c) In the case of Cash Flow Statement for the year ended on date March31 2020.
(d) In the case of Statement of changes in equity for the year ended ondate March 31 2020.
Basis for Qualified Opinion
The company is required to make provision for Gratuity in respect ofits employees as required under Payment of Gratuity Act 1965 by following accrual basisand conducting the valuation by following independent actuarial valuations as at thebalance sheet date by using the project unit cost method as mandated by Indian AccountingStandard-19 on Employee Benefits prescribed in the Companies (Accounting Standards) Rules2006 and Companies (Accounting Standards) Rules 2016. The company has not made anyprovision for Gratuity and the said non-provision is contravention. We are unable toascertain the financial implication of the same. The net profit for the year currentassets cumulative net profits are overstated to that extent.
Emphasis of Matter
a) We draw your attention to the responsibility of the Company toarrange balance confirmations in respect of Accounts Receivable Accounts Payable andother receivables/payables. The letters of confirmation have been sent by the managementto parties of Accounts receivables Accounts payables Advances
other payables/receivables to confirm their balances as on 31st March2020. Balance confirmations have not been received from parties up to the date of signingof financials. The balances of such parties have been incorporated in the financialstatements at the value as per the books of account. The company to the extent statedhas considered them as good and no provisions have been made in respect ofdebtors/advances. Accordingly Accounts Receivables and Payables balances and otherreceivables/payables are subject to confirmation and reconciliation. To that extent weare unable to ascertain financial implication of same in the financial statements.
b) We draw attention to Note 33 to the financial statements regardingmanagement's assessment of Covid-19 impact on the future performance of the company. Ourreport is not modified in respect of the matter.
Key Audit Matters
Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. We have determined the matters described below to be the key audit mattersto be communicated in our report.
Information Other than the Financial Statements and Auditor's ReportThereon
The Company's Board of Directors is responsible for the preparation ofthe other information. The other information comprises the information included in theManagement Discussion and Analysis Director's Report Report on Corporate Governance andGeneral Shareholders Information but does not include the financial statements and ourauditor's report thereon.
Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated.
If based on the work we have performed we conclude that there is amaterial misstatement of this other information we are required to report that fact. Wehave nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance forthe Financial Statements
The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of thesefinancial statements that give a true and fair view of the financialposition financial performance changes in equity and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theaccounting Standards specified under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguardingof the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and designimplementation and
maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
In preparing the financial statements the Board of Directors isresponsible 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 the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.
Auditor's Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether thefinancial 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 financial statements.
As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of thefinancial 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 relevantto the audit in order to design audit procedures that are appropriate in thecircumstances. Under section 143(3)(i) of the Act we are also responsible for expressingour opinion on whether the Company has adequate internal financial controls system inplace and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the 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 Company to cease tocontinue as a going concern.
Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.
Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the financial statements may beinfluenced. We consider quantitative materiality and qualitative factors in (i) planningthe scope of our audit work and in evaluating the results of our work; and (ii) toevaluate the effect of any identified misstatements in the financial statements.
We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.
We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.
From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
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 of the Companies Act 2013 we give in the Annexure 'A'statement onthe matters specified in paragraphs 3 and 4 of the Order to the extent applicable.
2. As required by Section 143 (3) of the Companies Act 2013 we reportthat:
a. Except for the matter described in the basis for qualified opinionand Emphasis of Matter Paragraph we have obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.
b. Except for the matter described in the basis for qualified opinionand Emphasis of Matter Paragraph in our opinion proper books of account as required bylaw have been kept by the Company so far as it appears from our examination of thosebooks;
c. Except for the matter described in the basis for qualified opinionand Emphasis of Matter Paragraph the Balance Sheet the Statement of Profit
and Loss the Statement of Changes in Equity and the Cash FlowStatement dealt with by this Report are in agreement with the books of account.;
d. Except forthepossible effects ofthematter describedintheBasisforQualified Opinion paragraphabove in our opinion the aforesaid financialstatements comply with the Indian Accounting Standards prescribed under Section 133 of theAct read with rule 7of the Companies (Accounts)Rules2014;
e. On the basis of the written representations received from thedirectors as on 31st March 2020 taken on record by the Board of Directors noneof the directors is disqualified as on 31 March 2020 from being appointed as a director interms of Section 164 (2) of the Act;
f. Except for the matter described in the basis for qualified opinionand Emphasis of Matter Paragraph with respect to the adequacy of the internal financialcontrols over financial reporting of the Company and the operating effectiveness of suchcontrols refer to our separate Report in Annexure 'B'; and
g. With respect to the other matters to be included in the Auditor'sReport in accordance with the requirements of section 197(16) of the Act as amended:
In our opinion and to the best of our information and according to theexplanations given to us the remuneration paid by the Company to its directors during theyear is in accordance with the provisions of section 197 of the Act.
h. With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 inour opinion and to the best of our information and according to the explanations given tous:
i. The Company does not have any pending litigation as on 31st March2020;
ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;
iii. There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company.
ForV Sahai Tripathi& Co.
Firms Registration No. 000262N
Membership No. 086897
Place: New Delhi
Date:- 30th June 2020
Annexure A' to Independent Auditors' Report
Referred to in Paragraph 1 under the heading of "report on otherlegal and
regulatory requirements" of our report of even date
1. (a) The company has not maintained proper records showing fullparticulars
including quantitative details and situation of fixed assets.
(b) As per the information and explanation provided to us Fixed Assetshave been physically verified by the management during the year at reasonable intervalsbut no physical verification report has been provided to us and we are unable to commenton the discrepancies in recording of Fixed Assets in books of accounts.
(c) There are no immovable properties in Southern Infosys Limited.Accordingly this sub-clause is not applicable on the Company for the year ended 31stMarch 2020.
2. The company does not hold any inventory as on 31st March2020.
3. The Company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Companies Act 2013.Consequentlysub- clauses 3 (a)(b) & (c) of this clause are not applicable.
4. The Company has not made any transaction in respect of loans coveredunder section 185 of the Companies Act 2013. In respect of loans investments guaranteesand security covered under section 186 of the Companies Act 2013 the provisions of thesaid section 186 have been duly compliedwith.
5. The Company has not accepted any deposits from the public andconsequently the directives issued by Reserve Bank of India the provisions of sections73 to 76 of the Companies Act 2013 and rules framed there under are not applicable.Accordingly rest of clause is not applicable on the Company.
6. In accordance with the information given by the management themaintenance of cost records has not been prescribed by the Central Government undersection 148 (1) of the Companies Act 2013.
7. (a) According to the information and explanations given to us and onthe basis of
our examination of the books of account the company is regular indepositing the undisputed statutory dues including provident fund employees' stateinsurance income tax GST duty of customs cess and any other statutory dues asapplicable with the appropriate authorities.
(b) According to the information and explanations given to us therewas no undisputed amounts payable in respect of the above dues which were outstanding asat 31st March 2020 for a period of more than six months from the date of their becomingpayable.
(c) According to the information and explanations given to us andthe records of the company produced before us there were no disputed Statutory Duespending before appropriate authorities.
8. As the company does not have any loans or borrowings from anyfinancial institution or bank or government nor has it issued any debentures as at thebalance sheet date the provisions of this clause of the Order are not applicable to thecompany.
9. The company has not raised any money by way of initial public offeror further public offer (including debt instruments) and term loans. Accordingly thisclause is not applicable on the Company during the year ended 31st March 2020.
10. According to the information and explanations given to us no fraudby the company or no fraud on the Company by its officers or employees has been noticed orreported during the year.
11. In our opinion and according to the information and explanationsgiven to us the company had paid/provided managerial remuneration in accordance withrequisite approvals mandated by the provisions of section 197 read with schedule V to theAct.
12. The company is not a Nidhi Company and hence clause 3 (xii) is notapplicable.
13. The transactions with the related parties made by the Company arein compliance with sections 177 and 188 of Companies Act 2013 where applicable and thedetails have been disclosed in theFinancial Statements as required by the applicableIndian Accounting Standards.
14. The company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures during the year and henceclause 3 (xiv) is not applicable.
15. During the year the company has not entered into any non- cashtransactions with directors or persons connected with him and hence provision of section192 of Companies Act 2013 is not applicable.
16. The company is not required to register under section 45- IA of theReserve Bank of India Act 1934.
For V Sahai Tripathi& Co.
Chartered Accountants Firms Registration No. 000262N
Membership No. 086897
Place: - New Delhi Date:- 30th June 2020
Annexure 'B' to Independent Auditors' Report
Referred to in Paragraph 2 (f) under the heading of "report onother legal and regulatory requirements" of our report of even date
Report on the Internal Financial Controls under Clause (i) ofSub-section 3 ofSection 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financialreporting of SOUTHERN INFOSYS LIMITED ("the Company") as of March 31 2020 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 andmaintaining internal financial controls based on internal policies & proceduresaccounting records and essential components on the internal control over financialreporting criteria established by the Company as per Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the ICAI. These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit.We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") and the Standards on Auditing issued by ICAIand prescribed under section 143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls. Those Standards and the Guidance Note requirethat we comply with ethical requirements and plan and perform the audit toobtainreasonable assurance about whether adequate internal financial controls overfinancialreporting was established and maintained and if such controls operatedeffectively in all materialrespects.
Our audit involves performing procedures to obtain audit evidence aboutthe adequacy ofthe internal financial controls system over financial reporting and theiroperating effectiveness.Our audit of internal financial controls over financial reportingincluded obtaining anunderstanding of internal financial controls over financialreporting assessing the risk that amaterial weakness exists and testing and evaluatingthe design and operating effectiveness ofinternal control based on the assessed risk. Theprocedures selected depend on the auditor'sjudgement including the assessment of therisks of material misstatement of the financialstatements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient andappropriate to providea basis for our audit opinion on the Company's internal financialcontrols system overfinancial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is aprocess designed to providereasonable assurance regarding the reliability of financialreporting and the preparation offinancial statements for external purposes in accordancewith generally accepted accountingprinciples. A company's internal financial control overfinancial reporting includes those policiesand procedures that:
a) Pertain to the maintenance of records that in reasonabledetailaccurately and fairly reflect the transactions and dispositions of the assets ofthe company;
b) Provide reasonable assurance that transactions are recorded asnecessary to permit preparationoffinancial statements in accordance with generallyaccepted accounting principles and thatreceipts and expenditures of the company are beingmade only in accordance withauthorisations of management and directors of the company; and
c) Provide reasonableassurance regarding prevention or timely detectionof unauthorised acquisition use ordisposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over FinancialReporting
Because of the inherent limitations of internal financial controls overfinancialreporting includingthe possibility of collusion or improper management overrideof controls material misstatementsdue to error or fraud may occur and not be detected.Also projections of any evaluation of theinternal financial controls over financialreporting to future periods are subject to the risk that theinternal financial controlover financial reporting may become inadequate because of changes inconditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequateinternal financialcontrols system over financial reporting and such internal financialcontrols over financialreporting were operating effectively as at March 31 2020 based onthe Company's internal policies & procedures and accounting records and implementationof essential components on the internal controls over financial reporting.
For V Sahai Tripathi& Co.
Chartered Accountants Firms Registration No. 000262N
Membership No. 086897
Place: - New Delhi Date: - 30th June 2020