1) We have audited the accompanying financial
statements of Tracxn Technologies Limited ("the
Company"), which comprise the Balance Sheet as at
March 31,2025, and the Statement of Profit and Loss
(including Other Comprehensive Income), the
Statement of Changes in Equity and the Statement of
Cash Flows for the year then ended, and notes to the
financial statements, including material accounting
policy information and other explanatory information.
2) 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 ("the Act") in the
manner so required and give a true and fair view in
conformity with the accounting principles generally
accepted in India, of the state of affairs of the
Company as at March 31, 2025, and total
comprehensive income (comprising of loss and other
comprehensive income), changes in equity and its
cash flows for the year then ended.
Basis for Opinion
3) 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 together with the ethical
requirements that are relevant to our audit of the
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 we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Key audit matters
4) Key audit matters are those matters that, in our
professional judgement, were of most significance in
our audit of the financial statements of the current
period. These matters were addressed in the context
of our audit of the financial statements as a whole and
in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
Appropriateness of revenue recognition on sale of
services
Note 15 (Revenue from operations) of the financial
statements.
The Company's revenue principally comprises sale of
services from Subscription revenue. Revenue from the
sale of services is recognised over time wherein the
customer simultaneously receives and consumes the
benefits provided by the Company. The progress is
measured using the output method which measures
revenue by comparing 'time elapsed' to the 'total
subscription period'.
We have identified the recognition of revenue as a key
audit matter specifically in terms of the risk of error in
the timing and amount of revenue recognised. The
subscriptions sold are generally non-cancellable. The
Company issues proforma invoice prior to issuing the
final invoice. Final invoice is issued once confirmation
for issue of final invoice is received or payment is
received from the customers. As at period end,
proforma invoices for which confirmations are yet to
be received are analysed by the Company and revenue
is recognised based on such analysis. Revenue
recognition is determined to be an area involving
significant risk in line with the requirements of
Standards of Auditing and requires significant auditor
attention.
Considering the above-mentioned factors,
appropriateness of revenue recognition has been
considered as a key audit matter.
How our audit addressed the key audit matter
Our key audit procedures around revenue recognition
included, and not limited to, the following:
• Understood and evaluated the design and
tested the operating effectiveness of key
manual controls relating to revenue
recognition;
• Read the Company's revenue recognition
accounting policy and evaluated the
appropriateness of the Company's revenue
recognition accounting policy with respect to
principles of Ind AS 115 'Revenue from
Contracts with Customers';
• Tested reconciling items between sales
register and general ledger;
• Tested sales transactions on a sample basis
by examining the underlying documents which
inter- alia included sales invoices and related
terms and conditions to assess whether
revenue was recognised appropriately;
• Evaluated the contract terms for selected
samples of customer contract and
recalculated the revenue including amount
disclosed as deferred revenue to determine
appropriateness of the revenue recognised;
• Tested the timing of recognition of revenue
including performing cut-off procedures to
determine whether revenue is recognised
appropriately over a period of time based on
satisfaction of performance obligation;
• Tested proforma invoices on a sample basis
for timing of revenue recognition.
• Tested reconciliation of deferred revenue to
determine whether revenue has been
recognised in the appropriate financial period;
• Tested unusual journal entries, if any, posted
under revenue general ledgers; and
• Evaluated the appropriateness and adequacy
of disclosures made in the financial
statements in respect of revenue recognition
with the applicable accounting standards.
Appropriateness of Assessment of recoverability of
Deferred Tax Assets ("DTA") on tax losses
(Note 8 to the financial statements.)
As at the year end the Company is carrying DTA of INR
600.21 lakhs on business losses carried forward from
the earlier years in the income tax return to the extent
it is recoverable based on the Company's projected
probable taxable profits in the forthcoming years.
DTA as at March 31,2025 has been recognised on the
basis of the Company's assessment of availability of
future probably taxable profit to be able to utilise such
tax losses. The recoverability of the DTA depends
upon factors such as the projected probable taxable
profits of business, the period considered for such
projections, the rate at which those profits will be
taxed, the period over which the tax losses will be
available for recovery and the likely outcome of
disputes pending with the tax authorities, if any. The
carrying amount of deferred tax assets is reviewed at
the end of each reporting period. Based on such an
assessment during the year the Company has
reversed DTA of INR 1,448.67 lakhs on the carried
forward business losses.
The assessment of recoverability of DTA is
considered a key audit matter as significant estimates
and judgement is required by the Company's
Management in the preparation of forecasts of future
probable taxable profits based on the underlying
business plans.
How our audit addressed the key audit matter
Our audit procedures, which involved applying
materiality and sampling techniques, included the
following:
• Evaluating the design and testing of the
operating effectiveness of Company's controls
relating to taxation and the assessment of
carrying amount of DTA relating to unabsorbed
tax losses.
• Evaluating whether the unabsorbed losses, on
which deferred tax asset is recognised, has
been assessed by the tax authorities and is
available for utilisation in accordance with the
provisions of Income- tax Act, 1961.
• Assessing the appropriateness of tax rate
applied to the taxable profit forecasts.
• Reviewing the Company's accounting policy in
respect of recognizing deferred tax asset on
tax losses
• Assessing the reasonableness of the period of
projections used in the deferred tax asset
recoverability assessment.
• Obtaining the future taxable income
projections prepared by the management and
evaluating the judgements and assumptions
made by the management in determining the
projected future taxable income for
reasonableness and performing sensitivity
analysis on the key assumptions.
• Assessing the adequacy of disclosures made
in the financial statements with regard to
deferred taxes.
Other Information
5) The Company's Board of Directors is responsible for
the other information. The other information
comprises the information included in the Annual
report but does not include the financial statements
and our auditor's report thereon. The Annual report is
expected to be made available to us after the date of
this auditor's report.
Our opinion on the 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 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.
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 and take appropriate action as
applicable under the relevant laws and regulations.
Responsibilities of management and those
charged with governance for the financial
statements
6) 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 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 Indian 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 financial
statements that give a true and fair view and are free
from material misstatement, whether due to fraud or
error.
7) In preparing the financial statements, Board of
Directors 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 Board
of Directors either intends to liquidate the Company or
to cease operations, or has no realistic alternative but
to do so.
8) Those Board of Directors are also responsible for
overseeing the Company's financial reporting
process.
Auditor's responsibilities for the audit of the
financial statements
9) Our objectives are to obtain reasonable assurance
about whether the 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 financial statements.
10) As part of an audit in accordance with SAs, we
exercise professional judgement and maintain
professional scepticism throughout the audit. We
also:
• Identify and assess the risks of material
misstatement of the 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(3)(i) of the
Act, we are also responsible for expressing our
opinion on whether the Company has
adequate internal financial controls with
reference to financial statements 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 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 financial statements,
including the disclosures, and whether the
financial statements represent the underlying
transactions and events in a manner that
achieves fair presentation.
11) 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.
12) 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.
13) From the matters communicated with those charged
with governance, we determine those matters that
were of most significance in the audit of the financial
statements of the current period and are therefore the
key audit matters. We describe these matters in our
auditor's 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.
Report on other legal and regulatory
requirements
14) 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 B" a
statement on the matters specified in paragraphs 3
and 4 of the Order, to the extent applicable.
15) 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 back-up of certain
books of account and other books and papers
maintained in electronic mode has not been
maintained on a daily basis on servers physically
located in India and the matters stated in
paragraph 15(h)(vi) below on reporting under
Rule 11(g) of the Companies (Audit and
Auditors) Rules, 2014 (as amended) .
(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 Flows dealt with by this
Report are in agreement with the books of
account.
(d) In our opinion, the aforesaid financial statements
comply with the Indian Accounting Standards
specified under Section 133 of the Act.
(e) On the basis of the written representations
received from the directors as on April 1, 2025,
taken on record by the Board of Directors, none
of the directors is 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 maintenance of accounts
and other matters connected therewith,
reference is made to our remarks in paragraph
15(b) above on reporting under Section
143(3)(b) and paragraph 15(h)(vi) below on
reporting under Rule 11(g) of the Companies
(Audit and Auditors) Rules, 2014 (as amended).
(g) With respect to the adequacy of the internal
financial controls with reference to financial
statements of the Company and the operating
effectiveness of such controls, refer to our
separate Report in "Annexure A"
(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 (as amended), in our opinion and to the
best of our information and according to the
explanations given to us:
i. The Company has disclosed the impact of
pending litigations on its financial position in
its financial statements - Refer Note 27 to
the financial statements;
ii. The Company was not required to recognise
a provision as at March 31, 2025 under the
applicable law or Indian Accounting
Standards, as it does not have any material
foreseeable losses on long-term contract.
The Company did not have any derivative
contracts as at March 31, 2025.
iii. There were no amounts which were required
to be transferred to the Investor Education
and Protection Fund by the Company during
the year ended March 31, 2025.
iv. (a) 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 or entities, including foreign entities
("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 (Refer Note 34(xi)(A) to the
financial statements);
(b) The management has represented that,
to the best of its knowledge and belief, no
funds have been received by the Company
from any person or entities, including foreign
entities ("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 (Refer
Note 34(xi)(B) to the financial statements ;
and
(c) Based on such audit procedures that we
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)
contain any material misstatement.
v. The Company has not declared or paid any
dividend during the year
vi. Based on our examination, which included
test checks, the Company has used
accounting software for maintaining its
books of account that have a feature of
recording audit trail (edit log) facility and that
has operated throughout the year for all
relevant transactions recorded in the
software. Further, the Company has used
another accounting software hosted by third
party service providers for maintaining its
ancillary books of account for certain
processes and in the absence of specific
information pertaining to audit trail at the
database level in the independent service
auditor's report, we are unable to comment
whether the audit trail (edit log) feature in
that accounting software was enabled and
operated throughout the year. For accounting
software other than the aforesaid accounting
software hosted by third party service
provider where the question of our
commenting does not arise, based on our
procedures performed, we did not notice any
instance of the audit trail feature being
tampered with, or not preserved by the
Company as per the statutory requirements
for record retention.
16) The Company has paid/ provided for managerial
remuneration in accordance with the requisite
approvals mandated by the provisions of Section
197 read with Schedule V to the Act.
For Price Waterhouse Chartered Accountants LLP
Firm Registration Number: 012754N/N500016
Mohan Danivas S A
Partner
Membership Number: 209136
UDIN: 25209136BMRJRH1552
Place : Bengaluru
Date: May 26, 2025
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