Report on the Standalone Financial Statements
1. We have audited the accompanying standalone financial statements of Majesco Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2017 the Statement of Profit and Loss and the cash flow statement for the year then ended, and a summary of significant accounting policies and other explanatory information.
Management''''s Responsibility for the Financial Statements
2. The Company''''s Board of Directors is responsible for the matters stated in section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these standalone financial statements that give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
This responsibility also includes the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting the frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
3. Our responsibility is to express an opinion on these standalone financial statements based on our audit. While conducting the audit we have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made there under.
4. We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.
5. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor''''s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial controls relevant to the Company''''s preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by Company''''s Directors, as well as evaluating the overall presentation of the financial statements.
6. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.
7. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017 and its profit and its cash flows for the year ended on that date;
Report on Other Legal and Regulatory Requirements
8. As required by the Companies (Auditor''''s Report) Order, 2016 ("Order") issued by the Central Government of India in terms of subsection (11) of section 143 of the Companies Act, 2013, and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure A, a statement on the matters specified in Paragraphs 3and4of the said Order.
9. 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 best of 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 the Company so far as it appears from our examination of those books.
c) The Balance Sheet, the Statement of Profit and Loss and the Cash Flow Statement dealt with by this report are in agreement with the books of account.
d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of written representations received from the directors as on March 31, 2017, taken on record by the Board of Directors, none ofthe directors is disqualified as on March 31, 2017 from being appointed as a director in terms of Section 164(2) ofthe Act.
f) With respect to the adequacy of the internal financial controls over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate report in "Annexure B" and
g) With respect to the other matters to be included in the Auditor''''s report in accordance with rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us :
i. The Company has disclosed the impact of pending litigations on its financial position in its financial statements.
ii. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses on long term contracts.
iii. There were no amounts which were required to be transferred, to the Investor Education and Protection Fund by the Company during the year ended March 31, 2017.
iv. The Company has provided requisite disclosures in its note 36 of standalone financial statements as to holdings as well as dealings in Specified Bank Notes during the period from 8 November, 2016 to 30 December, 2016 and these are in accordance with the books of account maintained by the Company.
The Annexure referred to in Independent Auditors'''' Report to the members of the Company on the standalone financial statements for the year ended March 31, 2017, we report that:
i. a. The Company is maintaining proper records showing full particulars, including quantitative details and situation of fixed assets;
b. The fixed assets of the company have been physically verified by the management during the year and no material discrepancies have been noticed on such verification. In our opinion frequency of verification is reasonable.
c. As mentioned in Note 10.2, the title deeds of immovable properties is yet to be transferred in the name of company till March 31, 2017. The details are as stated below:
Details of Property
Building:- Marisoft Software Park, S. N. 15, 3rd Floor, Marisoft-lll, E-Building East Wing, Kalyaninagar, Pune 411014
Plot No. 136 & P136/1 at TTC Industrial Area, Millennium Business Park, Mahape, Navi Mumbai 400710
ii. The Company is in the business of rendering software services and consequently does not hold any physical inventory. Therefore, the provisions of clause 3(ii) of the said Order are not applicable to the Company
iii. The Company has not granted any loans, secured or unsecured to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Therefore the provisions of clause 3(iii) (a) to 3(iii) (c) of the said Order are not applicable to the Company.
iv. The company has given a corporate guarantee in connection with loan facility of USD 10 Million (Drawn down-USD 6.8 Million) availed by a foreign subsidiary from a bank against Standby Documentary Credit (SBDC) issued by bank against pledge of fixed deposits for Rs. 6,700 Lakhs with the said bank. The transactions has complied with the provisions of section 185 and 186 of the Act.
v. The company has not accepted any deposits from the public within the meaning of sections 73 to 76 of the Act and the rules framed there under to the extent notified.
vi. Provisions of section 148 of the Act with regard maintenance of cost records are not applicable to the Company.
vii. a. According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the company is generally regular in depositing of undisputed statutory dues including provident fund, employees'''' state insurance, income-tax, sales tax, value added tax, service tax, cess as applicable, with the appropriate authorities.
b. According to the information and explanations given to us and the records of the company examined by us, there are no statutory dues of income tax, service tax which have not been deposited on account of any dispute, except for below mentioned share in stamp duty demand on Mastek Ltd arising from demerger of the Company which have not been deposited on account of a dispute as mentioned below:
Name of the Statue
Name of Dues
Amount in Rs. Lakhs
Period to which the amount relates
Forum where the dispute is pending
The Gujarat Stamp Act, 1958
Demand of Stamp Duty on Demerger
Chief Controlling Revenue Authority, Gujarat
viii. The company does not have any loans or borrowings from any financial institution or bank or Government, nor has it issued any debentures as at the balance sheet date. Hence, the provisions of Clause 3(viii) of the Order are not applicable to the company.
ix. The Company has not raised any moneys by way of initial public offer or further public offer (including debt instruments). According to the information and explanations given to us and the records of the company examined by us, the term loans availed by the company during the year are seen used for the purpose for which they were obtained except that a medium term loan of Rs. 2,400 Lakhs raised for maintenance of Capex was not utilized and the unused amount was kept in Fixed Deposit of Rs. 2,340 Lakhs. The entire loan was repaid in full during the year.
x. According to the information and explanations given to us, no material fraud by the Company or on the Company by its officers or employees, was noticed or reported during the year.
xi. According to the information and explanations given to us and based on our examination of the records ofthe Company, the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Act.
xii. As the company is not a Nidhi company and Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the company.
xiii. The company has entered into transactions with related parties in compliance with the provisions of Sections 177 and 188 of the Act. The details of such related party transactions have been disclosed in the standalone financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
xiv. The company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures (excluding shares offered under Employees Stock Option Scheme) during the year under review. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.
xv. The Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, paragraph 3(xv) of the Order are not applicable to the Company.
xvi. According to the information and explanations given to us, the company is not required to be registered under section 45-IA of the Reserve Bank of India Act 1934. Accordingly, the provisions of clause 3(xvi) of the order are not applicable to the company.
For VARMA & VARMA
Cherian K Baby
Place: Mumbai Partner
Date: May 9, 2017 M No. 16043