You are here » Home » Companies » Company Overview » Zen Technologies Ltd

Zen Technologies Ltd.

BSE: 533339 Sector: IT
NSE: ZENTEC ISIN Code: INE251B01027
BSE 00:00 | 23 Sep 195.05 8.60
(4.61%)
OPEN

195.75

HIGH

195.75

LOW

190.00

NSE 00:00 | 23 Sep 195.15 8.80
(4.72%)
OPEN

195.65

HIGH

195.65

LOW

190.25

OPEN 195.75
PREVIOUS CLOSE 186.45
VOLUME 490001
52-Week high 237.35
52-Week low 65.00
P/E 348.30
Mkt Cap.(Rs cr) 1,551
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 195.75
CLOSE 186.45
VOLUME 490001
52-Week high 237.35
52-Week low 65.00
P/E 348.30
Mkt Cap.(Rs cr) 1,551
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Zen Technologies Ltd. (ZENTEC) - Auditors Report

Company auditors report

To

The members of Zen Technologies Limited

Report on the Audit of the Standalone Financial Statements

OPINION

We have audited the accompanying standalone financial statements of ZEN TECHNOLOGIESLIMITED (the "Company") which comprise the Balance Sheet as at March 312021 the Statement of Profit and Loss (including Other Comprehensive Income) theStatement of Changes in Equity and the Statement of Cash Flows for the year ended on thatdate and notes to the financial statements including a summary of significant accountingpolicies and other explanatory information (collectively referred 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 2021 and its profit totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

BASIS FOR OPINION

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing ("SA"s) specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India ("ICAI") together with theethical requirements that are relevant to our audit of the standalone financial statementsunder the provisions of the Act and the Rules made thereunder and we have fulfilled ourother ethical responsibilities in accordance with these requirements and the ICAI's Codeof Ethics. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the standalone financialstatements.

KEY AUDIT MATTERS

Key audit matters are those matters that in our professional judgement 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 Auditor's Response
1 Non-Current Investments: Investment in Zen Technologies USA Inc.
During the FY 2019-20 the company has invested Rs 1434.66 lakhs in Zen Technologies USA Inc of which Rs 665.98 lakhs the shares were allotted in FY 2019-20 and for balance Rs 768.68 lakhs shares were allotted in FY 2020-21. Our audit procedures amongst others included the following:
• Obtained the details of transaction.
• Reviewed the documents submitted to regulatory authorities.
• Verified the accounting treatment and disclosures under Ind AS 109 Financial Instruments.
• Reviewed the financial statements of Zen Technologies USA Inc.

2 Foreign Operation:

The company has registered a Foreign Branch on 09-09- 2020 in the country of United Arab Emirates. Our audit procedures amongst others included the following:
• Obtained the details of transaction.
• Reviewed the documents submitted to regulatory authorities.
• Verified the accounting treatment and disclosures under Ind AS 21 The Effects of Changes in Foreign Exchange Rates.
• Reviewed the financial statements of Foreign Branch.

3 Disputed statutory dues:

There were disputed statutory dues pending disposal before CESTAT Hyderabad. Total disputed statutory dues were Rs 823.42 Lakhs as on 31.03.2021. Our audit procedures amongst others included the following:
• Obtained the case details and reviewed the status of case at various forums and had discussion with management.
• Company has disclosed the disputed liabilities as contingent liabilities in the financial statements as per Ind AS 37 Provisions Contingent Liabilities and Contingent Assets.

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 Annual Report but does not includethe 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 RESPONSIBILITIES FOR THE STANDALONE FINANCIAL STATEMENTS

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these standalone 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 Ind AS and other accounting principles generally accepted in India. 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 judgements 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 judgement 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 control 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 the 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 standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified 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.

REPOR 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 Flows 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.

e) On the basis of the written representations received from the directors as on March31 2021 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2021 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 opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the 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 were any material foreseeable losses.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.

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 to the extent applicable.

For Ramasamy Koteswara Rao and CO LLP
Chartered accountants
(Firm's registration no.010396S/S200084)
Place: Hyderabad Murali Krishna Reddy Telluri
Date: May 1 2021 Partner
(Membership No.223022 )
UDIN: 21223022AAAALT3384

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 ZEN TECHNOLOGIES LIMITED of evendate)

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 ZENTECHNOLOGIES LIMITED (the "Company") as of March 31 2021 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 (the"ICAI"). These responsibilities include the design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the orderly and efficient conduct of its business including adherence torespective company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial information as required under theCompanies Act 2013.

AUDITOR'S RESPONSIBILITY

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the ICAI and the Standardson Auditing prescribed under Section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively 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 judgement 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 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.

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.

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 2021 based on the internal financialcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the ICAI.

For Ramasamy Koteswara Rao and CO LLP
Chartered accountants
(Firm's registration no.010396S/S200084)
Place: Hyderabad Murali Krishna Reddy Telluri
Date: May 1 2021 Partner
(Membership No.223022 )
UDIN: 21223022AAAALT3384

Annexure "B" to the Independent Auditor's Report

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements' section of our report to the Members of ZEN TECHNOLOGIES LIMITED of evendate) 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) The Company has a program of verification to cover all the items of fixed assets ina phased manner which in our opinion is reasonable having regard to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets werephysically verified by the management during the year. According to the information andexplanations given to us no material discrepancies were noticed on such verification.

(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds / registered sale deed provided tous we report that the title deeds comprising all the immovable properties of land andbuildings which are freehold are held in the name of the Company as at the balance sheetdate. In respect of immovable properties of land and building that have been taken onlease and disclosed as fixed assets in the standalone financial statements the leaseagreements are in the name of the Company.

ii. The inventory has been physically verified during the year by the management. Inour opinion the frequency of the verification is reasonable. No material discrepancieswere noticed on such verification between the physical stock and the book records.

iii. 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 Companies Act 2013. Accordingly the provisions of paragraph 3 clauseiii (a) to (c) of the Order are not applicable to Company and hence not commented upon.

iv. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Act in respect ofgrant of loans making investments and providing guarantees and securities as applicable.

v. 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 rules framed there under with regard to thedeposits accepted from the public are not applicable.

vi. We have broadly reviewed the books of account relating to materials labour andother items of cost maintained by the company pursuant as specified by the CentralGovernment for the maintenance of cost records under Section 148(1) of the Act and we areof the opinion that primafacie the prescribed accounts and records have been madeand maintained. We have not however made a detailed examination of the records with aview to determine whether they are accurate or complete.

vii. According to the information and explanations given to us in respect of statutorydues:

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Goods and Service TaxCustoms Duty Cess and any other statutory dues applicable to it with the appropriateauthorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income Tax Goods and Service Tax Customs Duty Cess and any otherstatutory dues in arrears as at March 31 2021 for a period of more than six months fromthe date they became payable.

(c) Details of dues of Income Tax and Excise Duty which have not been deposited as atMarch 31 2021 on account of dispute are given below:

Nature of the statute Nature of dues Forum where Dispute is Pending Period to which the Amount Relates Amount _
Central Excise Act 1944 Excise Duty CESTAT Hyderabad. 2006-07 24475909
Central Excise Act 1944 Excise Duty CESTAT Hyderabad. 2007-08 18672446
Central Excise Act 1944 Excise Duty CESTAT Hyderabad. 2008-09 10792000
Central Excise Act 1944 Excise Duty CESTAT Hyderabad. 2009-10 15089488
Central Excise Act 1944 Excise Duty CESTAT Hyderabad. 2010-11 5912527
Central Excise Act 1944 Penalty on Excise Duty CESTAT Hyderabad. 2006-07 2500000
Central Excise Act 1944 Penalty on Excise Duty CESTAT Hyderabad. 2007-08 1800000
Central Excise Act 1944 Penalty on Excise Duty CESTAT Hyderabad. 2008-09 1000000
Central Excise Act 1944 Penalty on Excise Duty CESTAT Hyderabad. 2009-10 1500000
Central Excise Act 1944 Penalty on Excise Duty CESTAT Hyderabad. 2010-11 600000

viii. Based on our audit procedures and according to information and explanations givento us the company has not defaulted in repayment of loans or borrowings to financialinstitutions banks Government and there were no dues to debenture holders.

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. Accordingly theprovisions stated in paragraph 3 (ix) of the Order are not applicable to the company.

x. During the course of our audit examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across aninstance of material fraud by the company nor on the Company by its officers or employees.

xi. In our opinion and according to the information and explanations given to us theCompany has paid or provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

xii. In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Accordingly the provisions stated in paragraph 3(xii) ofthe order are not applicable to 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 Section 177 and 188 of the Companies Act 2013 where applicable and thedetails of such transactions have been disclosed in the standalone financial statements asrequired by the applicable accounting standards.

xiv. According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has converted share warrants issuedon preferential basis to fully paid-up equity shares during the year and the requirementsof Section 42 of the Act have been complied with. The amount raised has been used for thepurposes for which they were raised.

xv. In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable to the Company.

xvi. In our opinion the company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934 and accordingly the provisions of clause xvi ofthe order are not applicable to the company and hence not commented upon.

For Ramasamy Koteswara Rao and CO LLP
Chartered accountants
(Firm's registration no.010396S/S200084)
Place: Hyderabad Murali Krishna Reddy Telluri
Date: May 1 2021 Partner
(Membership No.223022 )
UDIN: 21223022AAAALT3384

.