We have audited the accompanying standalone financial
statements of M/s SPECTRUM TALENT MANAGEMENT
LIMITED ('the Company'), which comprises the Standalone
Balance Sheet as at 31 March 2025, the Standalone Statement of
Profit and Loss, the Standalone Cash Flow Statement for the year
then ended, and notes to the 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 financial statements
give the information required by the Companies Act, 2013 ('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 (financial position) of the Company as at March 31,
2025, its profit 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
Auditor's Responsibilities for the Audit of the 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 Companies Act,
2013 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 we have
obtained is sufficient and appropriate to provide a basis for our
opinion on the financial statements.
EMPHASIS OF MATTER
We draw attention to the following matter in the Notes to the
financial statements:
a) Note No. 34 of the financial statements, which discloses that
during the year, the Company received an order from the
CGST Commissionerate imposing a GST penalty of '288.26
million in connection with manpower services provided
to M/s HDFC Ergo General Insurance Company Ltd. for the
period from July 2017 to March 2023. The Company has
contested the demand and filed an appeal with the Appellate
Authority. Based on legal advice obtained and pending final
adjudication, the management believes that the resolution
of the matter will not have a material impact on the financial
statements.
Our Opinion is not modified in respect of the above matter.
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 of the 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. For
each matter below, our description of how our audit addressed
the matter is provided in that context. We have determined
the matters described below to be the key audit matters to be
communicated in our report:
REVENUE RECOGNITION (REFER NOTE 18 & 24 TO THE
STANDALONE FINANCIAL STATEMENTS)
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Key Audit Matter
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How the matter was
addressed in our audit
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Revenue recognition:
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Principal audit procedures
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Revenue from Manpower
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performed:
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supply and related services
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Our audit approach was a
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is recognized over the time
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combination of test of controls
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as the related services are
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and substantive procedures
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performed in accordance
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which included amongst
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with contractual terms. The
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others the following:
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Company's invoicing cycle is
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• Tested the effectiveness
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on contractual pre-determined
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of controls relating to
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dates and recognized as
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accuracy and occurrence
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receivables based on customer
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of unbilled revenues.
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acceptances for delivery of
work/ attendance of resource.
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• For a sample of contract:
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Revenue for the post billing
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i) Tested revenue
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period is recognized as unbilled
revenues. Unbilled revenues
are invoiced subsequent to the
year-end based on customer
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recognition by
agreeing key terms
used for recording
revenue with terms in
the signed contracts
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acceptances.
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and confirmation
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We considered recording of
unbilled revenues relating
to staffing services as a key
audit matter as there is a
significant judgement applied
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received from
customers for efforts
incurred / resources
deployed.
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by the Company to ensure that
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ii) Tested unbilled
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revenue is recorded based on
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revenues with
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(1) contractual terms and (2)
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subsequent
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attendance estimated for the
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invoicing based
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period from the last billing
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on customer
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date to the year-end based
on prior months attendance
records.
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acceptances.
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DEFERRED TAX ASSETS (REFER NOTE 15 TO THE
STANDALONE FINANCIAL STATEMENTS)
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Key Audit Matter
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How the matter was
addressed in our audit
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The carrying amount of the
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Our audit procedures
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deferred tax assets represents
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included:
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3.22% of the Company's total
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• Through discussions
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assets.
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with management,
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Recognition and
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we understood the
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measurement of deferred tax
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Company's process for
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assets
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recording deferred tax
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The Company has recognized
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assets;
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substantial deferred tax assets
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• We have obtained the
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relating to tax deductions under
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approved business
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Section 80JJAA of the Income
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plans, projected
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Tax Act, 1961, along with other
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profitability statements
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temporary differences, as
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for the existing projects
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detailed in Note 15.
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and the future projects
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The recognition of deferred
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which are confirmed
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tax assets involves judgment
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through definitive
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regarding the likelihood of
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agreements;
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the reasonable certainty of
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• We have performed
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realisation of these assets, in
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sensitivity analysis
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particular whether there will be
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and inquired into the
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taxable profits in future periods
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basis of the projections
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that support recognition of these
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for the reasonable
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assets.
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certainty of utilisation
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Management records deferred
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of the un-utilized
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tax assets in respect of tax
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benefit of 80JJAA and
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deduction u/s 80JJAA in
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therefore recognition of
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cases where it is reasonably
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deferred tax assets; and
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certain based on the projected
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• We tested the
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profitability determined on the
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underlying data for the
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basis of approved business plans
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key deferred tax and tax
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that sufficient taxable income
will be available to utilize benefit
of 80JJAA.
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provision calculations.
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INFORMATION OTHER THAN THE STANDALONE
FINANCIAL STATEMENTS AND AUDITOR'S REPORT
THEREON
The Company's Management and Board of Directors are
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. These are expected to be made
available to us after the date of the Auditor's report.
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
identified above when it becomes available and, in doing so,
consider whether the other information is materially inconsistent
with the 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 in other information, we are required
to communicate the matter to those charged with governance
as required under SA 720 'The Auditor's responsibilities Relating to
Other Information.
MANAGEMENT'S RESPONSILBILITY FOR THE
STANDALONE FINANCIAL STATEMENTS
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 of these Standalone financial
statements that give a true and fair view of the state of affairs
(financial position), profit or loss (financial performance) and
Cash flows of the Company in accordance with the accounting
principles generally accepted in India. 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
implementation and maintenance of 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
statements 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, management is
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 is also responsible for overseeing the
company's financial reporting process.
AUDITOR'S RESPONSIBILITIES FOR THE AUDIT OF
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 Standards on Auditing
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 financial statements.
As part of an audit in accordance with Standards on Auditing,
we exercise professional judgment and maintain professional
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the
Standalone financial statements, whether due to fraud or
error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and
appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations,
or the override of internal control.
• Obtain an understanding of internal control relevant to the
audit in order to design audit procedures that are appropriate
in the circumstances. Under section 143(3X0 of the Companies
Act, 2013, we are also responsible for expressing our opinion
on whether the company has adequate internal financial
control system in place and the operating effectiveness of
such controls.
• Evaluate the appropriateness of accounting policies used
and the reasonableness of accounting estimates and related
disclosures made by management.
• Conclude on the appropriateness of management's use of
the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant
doubt on the Company's ability to continue as a going
concern. If we conclude that a material uncertainty exists,
we are required to draw attention in our auditor's report to
the related disclosures in the Standalone financial statements
or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained
up to the date of our auditor's report. However, future events
or conditions may cause the Company to cease to continue
as a going concern.
• Evaluate the overall presentation, structure and content
of the Standalone financial statements, including the
disclosures, and whether the financial statements represent
the underlying transactions and events in a manner that
achieves fair presentation.
Materiality is the magnitude of misstatements in the Standalone
financial statements that, individually or in aggregate, makes
it probable that the economic decisions of a reasonably
knowledgeable user of the financial statements may be influenced.
We consider quantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the
results of our work; and (ii) to evaluate the effect of any identified
misstatements in the Standalone financial statements.
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.
REPORT ON OTHER LEGAL AND REGULATORY
REQUIREMENTS
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 the "Annexure
A", a statement on the matters specified in the paragraph 3 and 4
of the said order, to the extent applicable.
(A) 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 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 Standalone Financial Statements 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 Standard
specified under section 133 of the Act.
(e) On the basis of the written representations received
from the directors as on 31st March 2025 and taken on
record by the Board of Directors, none of the directors is
disqualified as on 31st March 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 over financial reporting of the Company and
the operating effectiveness of such controls, refer to our
separate report in "Annexure B". Our report expresses
an unmodified opinion on the adequacy and operating
effectiveness of the Company's internal financial controls
over financial reporting.
(B) 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, as amended, in our opinion
and to the best of our information and according to the
explanations given to us:
i. The Company has, to the extent ascertainable, disclosed
the impact of pending litigations on its financial position
in its financial statements - Refer Note 34 to the financial
statements;
ii. The Company does not have any material foreseeable
losses on long term contracts including derivative
contracts which would impact its financial position;
iii. There were no amounts which were required to be
transferred to the Investor Education and Protection
Fund by the Company.
iv. (a) The management has represented that, to the
best of its knowledge and belief, as disclosed in
Note 47(c) to the financial statements, 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 or entity, including foreign
entity ("Intermediaries"), with the understanding,
whether recorded in writing or otherwise, that the
Intermediary shall, whether, 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;
(b) the management has represented, that, to the
best of its knowledge and belief, as disclosed in
Note 47(c) to the financial statements, no funds
have been received by the Company from any
person or entity, including foreign entity ("Funding
Parties"), with the understanding, whether recorded
in writing or otherwise, that the Company shall,
whether, 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;
(c) Based on the audit procedures that have been
considered reasonable and appropriate in the
circumstances, nothing has come to our notice that
has caused us to believe that the representations
under sub-clause (a) and (b) above, contain any
material misstatement.
v. The Company has not declared or paid any dividend
during the year and has not proposed final dividend for
the year.
vi. Based on our examination which included test checks,
the company has used an accounting software for
maintaining its books of account which has a feature
of recording audit trail (edit log) facility and the same
has enabled and 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 has been preserved by the
company as per the statutory requirements for record
retention.
(C) With respect to the matter to be included in the Auditors'
Report 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 the explanations given to us, the remuneration
paid by the Company to its directors during the year is in
accordance with the provisions of section 197 of the Act.
For B. CHHAWCHHARIA & CO.
Chartered Accountants
Firm Registration No. 305123E
Abhishek Gupta
Partner
Membership No. 529082
Date: 27th May, 2025
Place: New Delhi
UDIN: 25529082BMIZYW9904
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