We have audited the accompanying standalone financial
statements of Genesys International Corporation
Limited (“the Company”), which comprise the Balance
Sheet as at March 31,2025, and the Statement of Profit and
Loss, including Other Comprehensive Income, Statement
of Changes in Equity and Statement of Cash Flows for
the year then ended, and notes to the standalone financial
statements, including material accounting policy information
and other explanatory information (hereinafter referred to as
the “ Standalone Financial Statements”).
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, 2025, and profit (including
other comprehensive income) changes in equity and its
cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit of the standalone financial
statements 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 'Auditor's 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, 2025 (current year). 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.
We have determined the matters described below to be the
key audit matters to be communicated in our report.
Key Audit Matters
|
Sr.
No
|
Key Audit Matter
|
How the Key Audit Matter was addressed in our audit
|
|
1
|
Revenue Recognition
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.
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 Management's 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:
|
Our audit procedures in respect of this area, among others,
included the following:
1. Evaluated the Company's accounting policies pertaining
to revenue recognition and assessed compliance of the
same in accordance with the requirements of Ind AS 115 -
Revenue from contracts with customers.
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.
3. Tested the design and operating effectiveness of
management's key internal financial controls around
revenue recognition
|
| |
i. existence of inherent uncertainty around
the estimation of total cost to complete the
contract given the customized nature of the
contracts.
ii. the estimation of total cost to complete the
contract involves significant judgement
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;
iii. At year end a significant amount of contract
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 Company's evaluation of the method
used for recognition of revenue is appropriate and
consistent;
- Verified the reasonableness of management's
estimation of cost projections by comparing actual cost
incurred with management initial/updated estimation
of total cost for that project.
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 - A.N. Virtual
World Tech Limited, Cyprus
Refer Note 7a to the standalone financial
statements.
The carrying amount of investments in foreign
subsidiary amounting to ' 13,334.79 lakhs (PY-
13,334.79 lakhs) constitute 15.88% of the total
assets of the Standalone Financial statements as
at 31 March 2025. 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).
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 Company's
assessment of impairment which involve significant
judgements 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.
Given the significant management's judgement
and estimation involved, and considering the
magnitude of the amount involved, we have
identified this as a key audit matter.
|
Our audit procedures in respect of this area, among others,
included the following:
1) Assessed the Company's accounting policies with respect
to impairment of investments in foreign subsidiary are in
compliance with the requirements of Ind AS 36 Impairment
of Assets.
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;
3) Tested the operating effectiveness of the controls over
the valuation and impairment of investments in foreign
subsidiary.
4) Obtained and reviewed the valuation report issued by the
Company's independent valuation experts, and assessed
the expert's 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 Company's 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 Accounting Standards and applicable financial
reporting framework.
|
|
3
|
Capitalization and impairment of Internally
|
Our audit approach includes but are not limited to the following :
|
| |
generated Intangible asset under development:
(Refer Note 6 to the Standalone financial
Statements)
The Company has capitalised ' 4,049 lakhs of
intangibles in the nature of GIS database during
the year and has an amount of ' 15,323 lakhs
|
a) Assessed the appropriateness of the Company's
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.
|
| |
under development as at March 31, 2025 for the
same.
Intangible asset under development are deemed
significant to our audit considering the significance
|
b) Performed walkthroughs of Internally generated intangible
assets under development process and assessed the
design effectiveness and operating effectiveness for key
controls.
|
| |
of the amount involved. The significant level of
Intangible assets under development requires
consideration of the determination of the timing
of when the asset meets specific capitalisation
criteria as per Ind 38 “Intangible Assets”. This
|
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.
|
| |
involves Management judgment, such as technical
feasibility, intention and ability to complete the
intangible asset, ability to use or sell the asset,
generation of future economic benefits and the
|
d) Evaluated the impairment indicator assessment performed
by the Group considering quantitative and qualitative
factors.
|
| |
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) We 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 Auditor's Report Thereon
The Company's Board of Directors is responsible for the
other information. The other information comprises the
information included in the Company's annual report but
does not include the standalone financial statements and
our auditor's 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.
When we read the Annual Report, if we conclude that
there is a material misstatement therein, we are required to
communicate the matter to those charged with governance
under SA 720 'The Auditor's responsibilities Relating to
Other Information' and take necessary actions under the
relevant laws and regulations.
Responsibilities of Management and Those Charged
with Governance for the Standalone Financial
Statements
The Company's 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
Management and Board of Directors are responsible for
assessing the Company's 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.
The Board of Directors are also responsible for overseeing
the Company's financial reporting process.
Auditor's 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 auditor's 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 Auditor's
responsibilities for Audit of the Standalone Financial
Statements.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order,
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.
2. 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 including other comprehensive income, the
Statement of Changes in Equity and the Statement
of Cash Flow dealt with by this Report are in
agreement with the books of account.
(d) In our opinion, the aforesaid standalone financial
statements comply with the Accounting Standards
specified under Section 133 of the Act.
(e) On the basis of the written representations
received from the directors as on March 31, 2025
taken on record by the Board of Directors, none
of the directors are disqualified as on March 31,
2025 from being appointed as a director in terms of
Section 164 (2) of the Act.
(f) With respect to the adequacy of the internal
financial controls with reference to standalone
financial statements of the Company and the
operating effectiveness of such controls, refer to
our separate Report in “Annexure C”.
(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
standalone financial statements - Refer Note
32 to the standalone financial statements;
ii. The Company did not have any long-term
contracts including derivative contracts for
which there were any material foreseeable
losses.
iii. There has been no delay in transferring
amounts, required to be transferred, to the
Investor Education and Protection Fund by the
Company.
iv. 1. The Management has represented that,
to the best of its knowledge and belief,
no funds have been advanced or loaned
or invested (either from borrowed funds
or share premium or any other sources or
kind of funds) by the Company to or in any
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.
2. The Management has represented, that,
to the best of its knowledge and belief, no
funds have been received by the Company
from any person(s) or entity(ies), including
foreign entities (Funding Parties), with
the understanding, whether recorded in
writing or otherwise, as on the date of
this audit report, that the Company shall,
directly or indirectly, lend or invest in
other persons or entities identified in any
manner whatsoever by or on behalf of the
Funding Party (“Ultimate Beneficiaries”) or
provide any guarantee, security or the like
on behalf of the Ultimate Beneficiaries.
3. Based on the audit procedures performed
that have been considered reasonable
and appropriate in the circumstances,
and according to the information and
explanations provided to us by the
Management in this regard nothing has
come to our notice that has caused us
to believe that the representations under
sub-clause (i) and (ii) of Rule 11(e) as
provided under (1) and (2) above, contain
any material mis-statement.
v. The Company has neither declared nor paid
any dividend during the year.
vi. Based on our examination, which included test
checks, the Company has used an accounting
software for maintaining its books of account
during the year ended March 31, 2025, which
has a feature of recording audit trail (edit log)
facility and the same has operated throughout
the year for all relevant transactions recorded
in the software.
Further, during the course of our audit, we did
not come across any instance of audit trail
feature being tampered with. Additionally, the
audit trail of prior year has been preserved by
the Company as per the statutory requirements
for record retention.
3. In our opinion, according to information, explanations
given to us, the remuneration paid by the Company to
its directors is within the limits laid prescribed under
Section 197 read with Schedule V of the Act and the
rules thereunder.
For M S K A & Associates
Chartered Accountants
ICAI Firm Registration No. 105047W
Amrish Vaidya
Partner
Membership No. 101739
UDIN: 25101739BMIKGV8737
Place: Mumbai
Date: May 30, 2025
|