Subex Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Subex Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2026, 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, 2026, 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, 2026. 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.
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Sr. No
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Key Audit Matters
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How the Key Audit Matters was addressed in our audit
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1
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Impairment assessment of investment in subsidiary:
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Our audit procedures in respect of this area included:
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As at March 31, 2026, the carrying value of Company’s investments in its subsidiaries is ' 13,795 lakhs.
The Company accounts for investments in subsidiaries at
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1) We assessed whether the Company’s accounting policy with respect to impairment is in accordance with Ind AS 36 “Impairment of assets”;
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cost less any provision for impairment loss. Annually, the impairment assessment for such investments have been carried out by the management in accordance with Ind AS 36.
Where an indication of impairment exists, the carrying value of investment is assessed for impairment and where applicable an impairment provision is recognised.
Impairment testing of Investments in subsidiaries is Key Audit
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2) We obtained and critically evaluated management’s forecasts of future cash flows underpinning the impairment assessment. We assessed the reasonableness of the key assumptions embedded in the forecasts — including revenue growth rates, operating margins, capital expenditure projections and terminal growth rates — by benchmarking them against externally available industry data, macroeconomic indicators and comparable market information.
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Matter as the amount is material to the standalone financial statements and the determination of recoverable value for impairment assessment involves significant management judgement and estimates.
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3) Evaluated the competence, capabilities and objectivity of the independent external specialists engaged by management and assessed whether the scope and methodology of the specialist’s work were appropriate and sufficient for the purposes of the impairment assessment.
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4)
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We engaged our internal valuation specialists to independently assess the valuation methodology adopted by management and to evaluate the appropriateness of the key assumptions used in the discounted cash flow model, including the discount rate applied and the basis for terminal value determination.
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5)
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Performed a retrospective review of estimates by comparing the actual financial performance the business for the year ended 31 March 2026 with the budgeted financial performance considered by management during the previous year and assessed if the estimation process is reasonable;
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6)
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We held discussions with senior management to understand and challenge the justification for the key assumptions underlying the cash flow projections, including the commercial rationale for growth expectations and the basis for long-term margin assumptions. We supplemented these discussions with further sensitivity testing to assess the reasonableness of management’s position
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7)
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We tested the arithmetical accuracy of the financial projection model; and
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8)
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We assessed and validated the Company’s disclosures concerning this in Note 2(b) on significant accounting estimates and judgements and Note 5 pertaining to the disclosures of investments as per the requirements of Ind AS 36: "Impairment of Assets” ("Ind AS 36”) in the Standalone Financial Statements.
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2
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Revenue Recognition:
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Our audit procedures in respect of this area included:
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The Company derives its revenue primarily from sale,
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1)
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We assessed the revenue recognition accounting policies by
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implementation and customization of its proprietary license
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comparing with applicable accounting standards;
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and related managed/support services.
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2)
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We tested key controls (both design and operating
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In accordance with Ind AS 115, the Company classifies its
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effectiveness) with respect to revenue recognition and related
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various contracts with customers and determines whether
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cost estimations;
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revenue should be recognized at "point in time” or "over the time” basis.
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3)
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We carried out analytical procedures on revenue recognized during the year ended to identify unusual variances;
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There are various areas involving complexities, judgements and estimates involved in accounting for revenue recognized on "over the time” basis, including
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4)
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We performed substantive testing by selecting samples of revenue transactions, recorded during the year ended by testing the underlying documents using statistical sampling;
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a) Estimation of total costs/ efforts at inception and remaining costs/ efforts to completion, which is a critical factor in measuring progress of a contract and amounts of revenue to be recognized; and
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5)
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We evaluated management’s estimates (Total contract costs/ efforts and remaining costs/ efforts to completion) by performing analytical procedures on such estimates;
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b) Assessment of various risks emanating from operational delays, contract terms, changes in estimations and scope, accounting for onerous obligations, technical, legal, external environment etc. This requires the
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6)
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We performed a retrospective review for contracts completed during the current year by comparing the final outcome of the contracts with previous estimates made for those contracts to assess the reliability of the management’s estimation process ;
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Company to estimate various costs to capture such
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7)
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We performed tests for completeness and appropriateness
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risks.
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of actual cost booked in the correct period, by testing the
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In view of the above and because the Company and its external stakeholders focus on revenue as a key performance
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underlying documents for samples selected using statistical sampling; and
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indicator, we determined this area to be an area involving
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8)
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We assessed the Company’s disclosures concerning this in Note
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significant risk, an area of audit focus, and accordingly a key
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2(b) on significant accounting estimates and judgements and
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audit matter.
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Note 21 pertaining to the disclosures of revenue from operations to the accompanying standalone financial statements.
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3
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Evaluation of key tax matters:
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Our audit procedures in respect of this area included:
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The Company operates in multiple jurisdictions and is subject
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1)
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We obtained an understanding of the Company’s process
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to periodic challenges by local tax authorities on a range of
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for identifying, recognising and measuring provisions for tax
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tax matters during the normal course of business including
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disputes and for determining the appropriate classification of
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transfer pricing and indirect tax matters.
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matters as provisions or contingent liabilities. We tested the
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These involve significant judgment by the Company to determine the possible outcome of the uncertain tax
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design and operating effectiveness of relevant internal controls over these processes.
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positions, consequently having an impact on related
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2)
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We obtained and reviewed the opinion of management’s
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accounting and disclosures in the standalone financial
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external tax expert on the status and likely outcome of ongoing
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statements, which have been a matter of significance during
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litigations. In doing so, we assessed the independence,
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the audit and hence considered as a key audit matter.
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objectivity and professional competence of the expert, and evaluated whether the scope of the expert’s work was adequate for our purposes
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3)
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We obtained and examined details of tax assessments, demands raised by tax authorities, and orders and notices received in respect of ongoing disputes and litigation. We critically evaluated the basis on which management has assessed the likelihood of outflow and the quantum of exposure recognised or disclosed in each case;
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4)
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We evaluated appropriateness of assumptions made by the Company in estimating the current and deferred tax balances;
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5)
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We engaged our internal tax specialists to independently review the status of tax assessments and to evaluate management’s position on the likelihood of an adverse outcome in each ongoing dispute. Our specialists assessed whether management’s conclusions were consistent with applicable tax law, judicial precedent, and the specific facts and circumstances of each matter
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6)
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We assessed the Company’s disclosures concerning this in Note 2(b) on significant accounting estimates and judgements and Note 33 pertaining to the disclosures of contingent liability to the accompanying standalone financial statements.
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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 Director’s report but does not include the standalone financial statements and our auditor’s report thereon. The Director’s report is expected to be made available to us after the date of this auditor’s report.
Our opinion on the standalone financial statements does not cover the other information and we will 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 standalone financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the Director’s 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’
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company’s Management and Board of Directors are 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, 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 is 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.
Other Matter:
The standalone financial statements of the Company for the year ended March 31, 2025, were audited by another auditor whose report dated May 02, 2025 expressed an unmodified opinion on those 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, except for the matters stated in the paragraph 2(f) below on reporting under Rule 11(g).
Further as explained in Note 43 to the financial statements, for one of the accounting applications, in the absence of sufficient appropriate audit evidence, including the SOC report, we are unable to comment on whether the back-up of books of account and other books and papers maintained in electronic mode have been kept on a daily basis, as required under Rule 11(g)
(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, 2026 taken on record by the Board of Directors, none of the directors are disqualified as on March 31, 2026 from being appointed as a director in terms of Section 164 (2) of the Act.
(f) The reservation relating to the maintenance of accounts and other matters connected therewith are as stated in paragraph 2(b) above on reporting under Section 143(3)(b) and paragraph 2(h)(vi) below on reporting under Rule 11(g).
(g) 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”.
(h) 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 33 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 were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
iv) 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 as explained in Note 44(vi) to the financial statements.
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 as explained in Note 44(vii) to the financial statements.
v) The Company has neither declared nor paid any dividend during the year.
vi) Based on examination which included test checks, the Company has used two accounting softwares for maintaining its books of account
(managed and maintained by a third-party software service provider) which has a feature of recording audit trail (edit log) facility and the same has been operated throughout the year for all relevant transactions recorded in the software except that in respect of one of the accounting softwares we are unable to comment on audit trail at database level due to absence of adequate coverage in the Independent service auditors report (SOC II report), as explained in Note 42 to the financial statements.
Further, except for above, audit trail feature has operated throughout the year for all relevant transactions recorded in all the aforesaid accounting softwares. Also, 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 years has been preserved by the Company as per the statutory requirements for record retention to the extent it was enabled and recorded in respective years.
3. In our opinion, according to information, explanations given to us, the remuneration paid by the Company to its directors is within the limits prescribed under Section 197 read with Schedule V of the Act and the rules thereunder.
For M S K C & Associates LLP
Chartered Accountants
ICAI Firm Registration Number - 001595S/S000168
Geetha Jeyakumar
Partner
Membership No. 029409
UDIN: 26029409BNSEMZ8752
Place: Bengaluru
Date: May 12, 2026
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