To the Members of Genesys International Corporation Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Genesys International Corporation Limited ("the Company"), which comprise the Balance Sheet as at March 31, 2023, and the Statement of Profit and Loss (Including Other Comprehensive Income), Statement of Changes in Equity2 and Statement of Cash Flows for the year then ended, and notes to the standalone financial statements, including a summary of significant accounting policies and other explanatory information
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 Companies Act, 2013 ("the Act) in the manner so required and give a true and fair view in conformity with the Indian Accounting Standards prescribed under section 133 of the Act read with Companies (Indian Accounting Standards) Rules, 2015, as amended ("Ind AS") and other accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2023, and profit other comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India (ICAI) together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements for the year ended March 31, 2023. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
Sr. No | Key Audit Matter |
How the Key Audit Matter was addressed in our audit |
1 | Revenue Recognition |
Our audit procedures in respect of this area, among others, included the following: |
Refer Note 23 of standalone financial statements. | ||
The Company engages in fixed price development contracts, some of which include multiple performance obligations. Revenue recognition in such contracts involves judgments relating to identification of distinct performance obligations, determination of transaction price for such performance obligations and the appropriateness of the basis of allocation of the transaction price to the respective performance obligations and also the basis of revenue recognition over a period. | 1. Evaluated the Companys accounting policies pertaining to revenue recognition and assessed compliance of the same in accordance with the requirements of Ind AS 115 | |
In case of fixed price development contracts where performance obligations are satisfied over a period of time, revenue is recognised using the percentage of completion ("POC") method based on Managements estimate of contract efforts. The POC method involves computation of actual cost incurred till date and estimation of total future cost to be incurred towards remaining performance obligations, which involves following factors: | Revenue from contracts with customers. | |
i. existence of inherent uncertainty around the estimation of total cost to complete the contract given the customized nature of the contracts. | 2. Obtained an understanding of the systems, processes and controls implemented by the Company for evaluation of projects with fixed price development contracts to identify distinct performance obligations and basis of recognition of revenue. | |
. | ii. the estimation of total cost to complete the contract involves significant throughout the period of contract and is subject to revision as the contract progresses based on latest available information and also involves critical estimates to make provision for onerous contract, if any; | 3. Evaluated the design and tested the operating effectiveness of internal controls relating to recording of the contract value, determining the transaction price, allocation of consideration to performance obligations, measurement of efforts incurred and process around estimation of efforts required to complete the remaining performance obligations and the most appropriate method to recognise revenue. |
iii. At year end a significant assets (unbilled revenue) and contract liabilities (unearned revenue) related to each contract is to be identified and disclosed as per the relevant requirements of the standards. | 4. Verified the samples on a test check basis and ensured that the revenue recognised is in accordance with Ind AS 115 by performing the following:- | |
- By reviewing the contractual terms to identify the performance obligation and assessing the basis of revenue recognition; | ||
- Considering the terms of the contracts to determine the transaction price, including adjustments for any sums payable to the customer; | ||
- Determined if the Companys evaluation of the method used for recognition of revenue is appropriate and consistent; | ||
- Verified the accuracy of the Companys calculation of efforts incurred and estimation of contract efforts including estimation of onerous obligation through a retrospective review of efforts incurred with estimated efforts; | ||
5. Assessed the valuation and accuracy of contract assets and contract liabilities on balance sheet date recognised by evaluating underlying documentation. | ||
6. Assessed the adequacy and appropriateness of the disclosures made in the financial statements is in accordance with Ind AS 115 and applicable financial reporting framework. |
2 | Assessment of Impairment of Carrying value of Investment in foreign subsidiary |
Our audit procedures in respect of this area, among others, included the following: |
Refer Note 7a to the standalone financial statements. | 1) Assessed the Companys accounting policies with respect to impairment of investments in foreign subsidiary are in compliance with the requirements of Ind AS 36 Impairment of Assets. | |
The carrying amount of investments in foreign subsidiary amounting to 13,334.79 lakhs (PY- 5,935.39 lakhs) constitute 24.62 % of the total assets of the Standalone Financial statements as at 31 March 2023. The Company has carried out impairment testing of such investment and have recognized impairment provision of 8,569.79 lakhs (PY 8,569.79 lakhs ). | 2) Obtained an understanding of the assumption used by the Management, including design and implementation of controls over the valuation and impairment of investments in foreign subsidiary and also validation of Management review controls; | |
These investments in foreign subsidiary are carrying at cost less accumulated impairment. In accordance with Ind AS 36 - Impairment of assets, at each reporting period end, Management assesses the existence of impairment indicators of investments in foreign subsidiary. For investments where impairment indicators exist, management estimates the value in use in the subsidiary. The value in use is determined based on Companys assessment of impairment which involve significant and estimates around revenue growth, cashflow forecasting, appropriate discount rate and other recent financing transactions. Changes in these assumptions could lead to an impact over fair value of investment and impairment provision thereon. | 3). Tested the operating effectiveness of the controls over the valuation and impairment of investments in foreign subsidiary. | |
Given the significant managements judgement and estimation involved, and considering the magnitude of the amount involved, we have identified this as a key audit matter. | 4) Obtained and reviewed the valuation report issued by the Companys independent valuation experts, and assessed the experts competence, capability and objectivity. | |
5) Verified completeness, arithmetical accuracy and validity of the data like revenue, profit and cash flow projections used in the calculations; | ||
6) Verified the reasonableness of key assumptions like terminal growth rates and the selection of discount rates. | ||
7) Assessed the Companys sensitivity analysis and evaluated whether any reasonably foreseeable change in assumptions could lead to impairment or material change in carrying value of Investment in foreign subsidiary. | ||
8) Assessed the adequacy and appropriateness of the disclosures made in the financial statements as prescribed in Indian Accouting Standards and applicable financial reporting framework. |
3. | Capitalization and impairment of Internally generated Intangible asset under development: (Refer Notes 6 to the Standalone financial Statements) |
Our audit approach includes but are not limited to the following : |
The Company has capitalised 4,426.89 lakhs of intangibles in the nature of GIS database during the year and has an amount of 5,724.41 lakhs under development as at March 31, 2023 for the same. | a) Assessed the appropriateness of the Companys accounting policies for compliance with IND AS 36 "Impairment of asset" and IND AS 38 "Intangible Asset" and on a sample basis tested available documentation to consider whether the criteria for capitalization and impairment of asset were met. | |
Intangible asset under development are deemed b)significant to our audit considering the significance of of the amount involved. The significant Intangible assets under development requires consideration of the determination of the timing c) of when the asset meets specific capitalisation criteria as per Ind 38 "Intangible Assets". This involves Management judgment, such as technical feasibility, intention and ability to complete the intangible asset, ability to use or sell the asset, d) generation of future economic benefits and the ability to measure the costs reliably. In addition, determining whether there are any indication of impairment of the carrying value of assets, that requires Management judgment and assumptions, which are affected by future market, technological and economic developments. Accordingly, we have determined this to be a Key Audit Matter. e) | b) Performed walkthroughs of Internally generated intangible assets under development process and assessed the design effectiveness and operating effectiveness for key controls. | |
c) Performed tests of details on a test check basis of capitalisation of project related costs during the year and obtained underlying evidence to verify whether the costs qualify for capitalization as per specific capitalisation criteria as per Ind 38 "Intangible Assets. | ||
d) Evaluated the methodology, source data and reasonableness of the key assumptions i.e the long-term growth rate used in forecasts, including consideration of the current and estimated industry and economic conditions for appropriate forecast of future revenue projections used by the Company to test the carrying value of Intangible asset under development for impairment. | ||
e) We a Assessed the adequacy and appropriateness of the disclosures made by the Company in accordance with Ind AS 36 and 38 in the accompanying financial statements. |
Information Other than the Standalone Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the other information. The other information comprises the information included in the Companys annual report but does not include the standalone financial statements and our auditors report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Companys Board of Directors is responsible for the matters stated in section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance, changes in equity 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. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting 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 standalone financial statement that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Board of Directors is responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
Those Board of Directors are also responsible for overseeing
the Companys financial reporting process.
Auditors Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
We give in "Annexure A" a detailed description of Auditors responsibilities for Audit of the Standalone Financial Statements.
Report on Other Legal and Regulatory Requirements
2020 ("the Order"), issued by the Central Government
of India in terms of sub-section (11) of section 143 of the Act, we give in "Annexure B" a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
For M S K A & Associates Chartered Accountants
ICAI Firm Registration No. 105047W
Amrish Vaidya Partner
Membership No. 101739
UDIN: 23101739BGXTVJ1390
Place: Mumbai Date: May 30, 2023
ANNEXURE A TO THE INDEPENDENT AUDITORS REPORT
ON EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF GENESYS INTERNATIONAL CORPORATION LIMITED
Auditors Responsibilities for the Audit of the Standalone Financial Statements
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the year ended March 31, 2023 and are therefore, the key audit matters. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
For M S K A & Associates Chartered Accountants
ICAI Firm Registration No. 105047W
Amrish Vaidya Partner
Membership No. 101739
UDIN: 23101739BGXTVJ1390
Place: Mumbai Date: May 30, 2023
ANNEXURE B TO INDEPENDENT AUDITORS REPORT
OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF GENESYS INTERNATIONAL CORPORATION LIMITED FOR THE YEAR ENDED MARCH 31, 2023
[Referred to in paragraph 1 under Report on Other Legal and Regulatory Requirements in the Independent Auditors Report]
i.
B. The Company has maintained proper records showing full particulars of intangible assets.
have been physically verified by the management at
Loans |
|
Aggregate amount provided during the year | |
- Subsidiaries | 100 lakhs |
Balance Outstanding as at balance sheet date
in respect of above cases - Subsidiary |
75.32 lakhs |
reasonable intervals during the year and no material
discrepancies were identified on such verification.
ii.
are not prejudicial to the interest of the Company. However, the loan and interest has been provided for in the standalone financial statements with respect to subsidiary amounting to 1,469.05 lakhs.
Related Parties | |
Aggregate amount of loans/ advances in nature of
loans - Repayable on demand |
1,544.40 lakhs |
Total | 1,581.80 lakhs |
Percentage of loans/advances in nature of loans to the total loans | 97.64% |
iii.
According to the information and explanation given to us, no undisputed amounts payable in respect of Goods and Services tax, provident fund, employees state insurance, income-tax, sales-tax, service tax, duty of customs, duty of excise, cess, and other statutory dues in arrears as at March 31, 2023 for a period of more than six months from the date they became payable.
Name of the statute |
Nature of dues | Amount Demanded in lakhs. |
Amount Paid | Period to which the amount relates | Forum where dispute is pending | Remarks, if any |
Income Tax Act, 1961 | Income Tax | 593.73 | - | AY 2018-19 | National Faceless Appeal Centre | |
Income Tax Act, 1961 | Income Tax | 4.16 | - | AY 2012-13 | National Faceless Appeal Centre |
x.
xi.
on the Company has been noticed or reported during the course of our audit.
xii.
(a) The Company is not a Nidhi Company. Accordingly, the provisions stated in paragraph 3(xii) (a) to (c) of the Order are not applicable to the Company.
xiii. According to the information and explanations given to us and based on our examination of the records of the Company, transactions with the related parties are in compliance with Sections 177 and 188 of the Act, where applicable and details of such transactions have been disclosed in the standalone financial statements as required by the applicable accounting standards.
xiv.
xv. According to the information and explanations given to us, in our opinion, during the year the Company has not entered into non-cash transactions with directors or persons connected with its directors and hence, provisions of Section 192 of the Act are not applicable to Company.
xvi.
135 of the Act read with schedule VII. Accordingly, reporting under Clause 3(xx)(a) and Clause 3(xx)(b) of the Order is not applicable to the Company.
For M S K A & Associates Chartered Accountants
ICAI Firm Registration No. 105047W
Amrish Vaidya Partner
Membership No. 101739
UDIN: 23101739BGXTVJ1390
Place: Mumbai Date: May 30, 2023
ANNEXURE C TO THE INDEPENDENT AUDITORS REPORT
OF EVEN DATE ON THE STANDALONE FINANCIAL STATEMENTS OF GENESYS INTERNATIONAL CORPORATION LIMITED
Referred to in paragraph 2(f) under Report on Other Legal and Regulatory Requirements in the Independent Auditors Report of even date to the Members of Genesys International Corporation Limited on the Financial Statements for the year ended March 31, 2023
Report on the Internal Financial Controls under Clause
Opinion
We have audited the internal financial controls with reference to standalone financial statements of Genesys International Corporation Limited ("the Company") as of March 31, 2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.
In our opinion, the Company has, in all material respects, an adequate internal financial controls with reference to standalone financial statements and such internal financial controls with reference to standalone financial statements were operating effectively as at March 31, 2023, based on the internal control with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India (ICAI) (the "Guidance Note").
Managements Responsibility for Internal Financial Controls
The Companys Management is responsible for establishing and maintaining internal financial controls based on the internal control with reference to standalone financial statements criteria established by the Company considering the essential components of internal control stated in the Guidance Note. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to Companys policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Act.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial controls with reference to standalone financial statements based on our audit. We conducted our audit in accordance with the Guidance Note and the Standards on Auditing, issued by ICAI and deemed to be
prescribed under section 143(10) of the Act, to the extent applicable to an audit of internal financial controls. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls with reference to standalone financial statements was established and maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls with reference to standalone financial statements and their operating effectiveness. Our audit of internal financial controls with reference to standalone financial statements included obtaining an understanding of internal financial controls with reference to standalone financial statements, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditors judgement, including the assessment of the risks of material misstatement of the standalone financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Companys internal financial controls with reference to standalone financial statements.
Meaning of Internal Financial Controls With reference to Standalone Financial Statements
A Companys internal financial control with reference to standalone financial statements is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of standalone financial statements for external purposes in accordance with generally accepted accounting principles. A Companys internal financial control with reference to standalone financial statements includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;
(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of standalone financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls With reference to Standalone financial statements
Because of the inherent limitations of internal financial controls with reference to standalone financial statements, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls with reference to standalone financial statements to future periods are subject to the risk that the internal financial control with reference to standalone financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
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