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AXISCADES Technologies Ltd.

BSE: 532395 Sector: IT
NSE: AXISCADES ISIN Code: INE555B01013
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OPEN 94.70
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VOLUME 41212
52-Week high 105.00
52-Week low 31.10
P/E
Mkt Cap.(Rs cr) 338
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 94.70
CLOSE 92.95
VOLUME 41212
52-Week high 105.00
52-Week low 31.10
P/E
Mkt Cap.(Rs cr) 338
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

AXISCADES Technologies Ltd. (AXISCADES) - Auditors Report

Company auditors report

To the Members of

AXISCADES Engineering Technologies Limited

REPORT ON THE AUDIT OF THE STANDALONE IND AS FINANCIAL STATEMENTS

OPINION

We have audited the accompanying standalone Ind AS financial statementsof AXISCADES Engineering Technologies Limited ("the Company") which comprisethe Balance sheet as at March 31 2020 the Statement of Profit and Loss including thestatement of Other Comprehensive Income the Cash Flow Statement and the Statement ofChanges in Equity for the year then ended and notes to the standalone Ind AS financialstatements including a summary of significant accounting policies and other explanatoryinformation

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone Ind AS financial statements give theinformation required by the Companies

Act 2013 as amended ("the Act") in the manner so requiredand give a true and fair view in conformity with the accounting principles generallyaccepted in India of the state of affairs of the Company as at March 31 2020 its lossincluding other comprehensive income its cash flows and the changes in equity for theyear ended on that date.

BASIS FOR OPINION

We conducted our audit of the standalone Ind AS financial statements inaccordance with the Standards on Auditing (SAs) as specified under Section 143(10) of theAct. Our Standards are further described in the Auditors Responsibilities the Audit of theStandalone Ind AS Financial Statements Section of our report. We are independent of theCompany in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India together with the ethical requirements that are relevant to our auditof the financial statements under the provisions of the Act and the Rules thereunder andwe have fulfilled our other ethical responsibilities in accordance with of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our audit the standalone Ind AS financial

EMPHASIS OF MATTER

We draw attention to Note 43 of the accompanying standalone Ind ASfinancial statements which describes Managements assessment of the impact ofuncertainties caused by COVID-19 pandemic and its consequential impact it may have on theoperations of the Company. Our opinion is not modified in respect of this .

KEY AUDIT MATTERS

Key audit matters are those judgment were of most significance in ouraudit of the standalone Ind AS financial statements for the financial year ended March 31

2020. These matters the standalone Ind AS financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters. For each matter below our description of how our audit addressed thematter is provided in that context.

We have determined the matters described below to be the key auditmatters to be communicated in our report. We have the responsibilities described in theAuditors responsibilities audit of the standalone Ind AS financial statements Sectionofour report including in relation to these matters. Accordingly our auditresponsibilities under those included the performance of procedures designed to respond toour for assessment of the risks of material misstatement of the standalone Ind ASfinancial statements. The results of our audit procedures including the proceduresperformed to address the matters below provide the basis for our audit opinion on theaccompanying standalone Ind AS financial

Key audit matters How our audit addressed the key audit matter
for business acquisition Valuation of (as described in Note 2(i)(b) and 6(a)(i) of the standalone Ind AS financial statements)
The Company entered into a Share Purchase Agreement (SPA)effective December 1 2017 to acquire 100% of the paid-up share capital of Mistral Solutions Private Limited (MSPL) in a phased manner over a period specified in the SPA. Our audit procedures included the following:
As at March 31 2020 the Company has contingent consideration payable of 5069.50 lakhs. The said consideration is remeasured at fair value at each Balance Sheet date and is affected by changes Companys weal so evaluated the objectivity experts ("MSPL Group"). acquisition • We understood evaluated and tested Managements controls over the determination of the contingent consideration payable;
Any resulting gain or loss is recognized in the statement of profit and loss. The determination of value of contingent consideration payable made by the Management involved judgment in relation to the post-acquisition performance of the MSPL Group impact of COVID-19 and discount rates applied in determining the fair value of contingent consideration payable. • We assessed the Companys valuation methodology applied in determining the value of contingent consideration payable. In making this assessment in the estimation of post- and independence of involved in the process;
Accordingly we have determined this a reatoeal accuracy of the underlying computation of mathematic key audit matter in our statements as per and • We evaluated performance forecasts used in the computation contingent of consideration payable and we engaged expert to assess the assumptions adopted by the Management with reference to MSPL Groups business plan and historical results to assess the quality of MSPL Groups financial projection including assumptions related to discount rates impact of COVID-19 and growth rates;
• We tested audit of the Standalone Ind AS financial statements. contingent consideration payable and
• We have assessed the disclosures in the Ind AS financial the relevant accounting standards.
Assessment of impairment of investments in MSPL (as described in Note 2(i)(l) and Note 6(a)(i) of the standalone Ind AS financial Our audit procedures included the following:
During the current year impairment indicators were identified by the Management on the carrying value of investment in Mistral Solutions Private Limited (MSPL). The carrying value of the investment in MSPL aggregated 24213.97 lakhs. As a result an impairment assessment was required to be performed by the Company by comparing the carrying value of the investment to their recoverable amount to determine whether an impairment was required to be recognised. • We understood evaluated and tested Managements key controls over the impairment assessment process;
For the purpose of the above impairment testing recoverable amount has been determined by forecasting and discounting future cash flows. • We assessed the Companys valuation methodology applied in determining the recoverable amount. In making this assessment we also evaluated the objectivity and independence of Companys experts involved in the
Furthermore the recoverable amount is based on Managements assumptions of variables and market conditions such as volume growth rates impact of COVID- 19 future operating expenditure discount rates and• long-term growth rates. • We engaged experts to assess the assumptions around the key drivers of the cash flow forecasts including discount rates expected growth rates impact of COVID-19 and terminal growth rates and methodologies used by the Management to determine the recoverable amount; We tested the arithmetical accuracy of the impairment testing models; and
Determination of the recoverable amount of the investment in MSPL involved judgment due to inherent uncertainty in the assumptions supporting the recoverable amount of the investment and accordingly the impairment of investment in MSPL was determined to be a key audit matter in our audit of the standalone Ind AS financial statements. • We have assessed the disclosures in the Ind AS financial statements as per the relevant accounting standards.

We have determined that there are no other key audit matters tocommunicate in our report.

OTHER INFORMATION

The Companys Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Annualreport but does not include the standalone Ind AS financial

Our opinion on the standalone Ind AS financial statements does notcover the other information and we do not express any form of assurance conclusionthereon.

In connection with our audit of the standalone Ind AS financialstatements our responsibility is to read the other information and in doing so considerwhether such other information is materially inconsistent with the financial statements orour knowledge obtained in the audit or otherwise appears to be materially misstated. Ifbased on the work we have performed we conclude that there is a material misstatement ofthis other information we are required to report that fact. We have nothing to report inthis regard.

RESPONSIBILITIES OF MANAGEMENT FOR THE STANDALONE IND AS FINANCIALSTATEMENTS

The Companys Board of Directors is responsible for the matters statedin Section134(5) of the Act with respect to the preparation of these standalone Ind ASfinancial statements that give a true and fair view of the financial position financialperformance including other comprehensive income cash flows and changes in equity of theCompany in accordance with the accounting generally accepted in India including theIndian Accounting Standards (Ind AS) specified under Section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoand our auditors report thereon. includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone Ind AS financial statements that give a true and fair view and are freefrom material misstatement whether due to fraud or error.

In preparing the standalone Ind AS financial statements Management isresponsible for assessing the Companys ability to continue as a going concern disclosingas applicable matters related to going concern and using the going concern basis ofaccounting unless Management either intends to liquidate the Company or to ceaseoperations or has no

Those Board of Directors are also responsible for overseeing the\Companys financial reporting process.

AUDITORS RESPONSIBILITIES FOR THE AUDIT OF THE STANDALONE IND ASFINANCIAL STATEMENTS objective are to obtain reasonable assurance about whether Ourthe standalone Ind AS financial statements as a whole are free from material misstatementwhether 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 auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these standalone Ind AS financialstatements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism audit. We also:

• Identify and assess the risks of material misstatement of thestandalone Ind AS financial statements whether due to fraud or error design and performaudit procedures responsive to those risks and obtain audit evidence that is sufficientand appropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudintentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. UnderSection are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls with reference to financial statements in place andthe operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by Management.

• Conclude on the appropriateness of Managements use of the goingconcern basis of accounting and based on the audit evidence obtained whether a materialuncertainty exists related to events or conditions that may cast on the Companys abilityto continue as a going concern. If we conclude that a material uncertainty exists we arerequired to draw attention in our auditors report to the related disclosures in thefinancial statements or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditorsreport. However future events or conditions cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone Ind AS financial statements including the disclosures and whether thestandalone Ind AS financial statements represent the underlying transactions and events ina manner that achieves fair presentation.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant internal control that we identify during our audit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards. throughout the

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of for the financialyear ended March 31 2020 and are therefore the key audit matters. We describe thesematters in our auditors report unless law or regulation precludes public disclosure aboutthe matter or when in extremely rare circumstances we determine may involve collusionforgery that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication

REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS

1. As required by the Companies (Auditors Report) Order 2016 143(3)(i)of the Act we ("the Order") issued by the Central Government of India in termsof sub-section (11) of Section 143 in the "Annexure 1" a statement on theparagraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act we report that: (a) Wehave sought and obtained all the information and explanations which to the best of ourknowledge and belief were necessary for the purposes of our audit;

(b) In our opinion proper books of account as required by doubt lawhave 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 includingthe Statement of Other Comprehensive Income the Cash Flow Statement and Statement ofChanges in

Equity dealt with by this Report are in agreement with the books ofaccount;

(d) In our opinion the aforesaid standalone Ind AS financialstatements comply with the Accounting Standards specified under Section133 of the Actread with Companies (Indian Accounting Standards) Rules 2015 as amended;

(e) On the basis of the written the directors as on March 31 2020taken on record by the Board of Directors none of the directors is disqualified as onMarch 31 2020 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 controlsover financial reporting of the Company with reference to these standalone Ind ASfinancial statements and the operating effectiveness of such controls refer to ourseparate Report in "Annexure 2" to this report;

(g) In our opinion the managerial remuneration year ended March 312020 has been paid/ provided by the Company to its directors in accordance with theprovisions of Section 197 read with Schedule V to the Act;

(h) With respect to the other matters to be included in the AuditorsReport in accordance with Rule 11 of the

Companies (Audit and Auditors) Rules 2014 as amended in our opinionand to the best of our information according to the explanations given to us: i. TheCompany has disclosed the impact of pending litigations on its financial position Ind ASfinancial statements Refer Note 46 to the standalone Ind AS financial

ii. The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses;

iii. There were no amounts which were required to be transferred to theInvestor Education and Protection Fund by the Company.

Annexure - A to the Auditors Report

Annexure 1 referred to paragraph 1 under the heading "Report onOther Legal and Regulatory Requirements" of our report of even date

Re: AXISCADES Engineering Technologies Limited (the Company)

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation property plant and equipment.

(b) All property plant and equipment have not been physicallyverifiedby the Management during the year whichbut there is a regular programme ofverification in our opinion is reasonable having regard to the size of the Company andthe nature of its assets. No material discrepancies were noticed on such verification.

(c) According to the information and explanations given by theManagement the title deeds of immovable properties included in property plant andequipment are held in the name of the Company.

(ii) The Companys business does not involve inventories andaccordingly the requirements under clause 3(ii) of the Order are not applicable to theCompany.

(iii) (a) The Company has granted a loan to a company covered in theregister maintained under Section Companies Act 2013. In our opinion and according to theinformation and explanations given to us the terms and conditions of the grant of suchloans are not prejudicial to the Companys interest.

(b) The Company has granted loan to a company covered in the registermaintained under Section Companies Act 2013. The schedule of repayment of principal andpayment of interest has been stipulated for the loan which are not due and thus therehas been no default on the principal and given to us there are no interest payments ofthe party to whom the money has been lent; and

(c) There are no amounts out of the loan granted to company listed inthe register maintained under Section189 of the Companies Act 2013 which are overdue formore than ninety days.

(iv) In our opinion and according to the information and explanationsgiven to us provisions of Section of the Companies Act 2013 in respect of loans todirectors including entities in which they are interested and in respect of loans andadvances given investments made and guarantees and securities given have been compliedwith by the Company.

(v) The Company has not accepted any deposits within the meaning ofSections 73 to 76 of the Act and the Companies (Acceptance of Deposits) Rules 2014 (asamended). Accordingly the provisions of Clause 3(v) of the Order are not applicable.

(vi) To the best of our knowledge and as explained the Central byGovernment has not specified the maintenance of cost records under Section148(1) of theCompanies Act 2013 for the services of the Company.

(vii) (a) Undisputed statutory dues including provident fund employeesstate insurance income-tax sales- tax service tax duty of custom duty of excise valueadded tax goods and service tax cess and other statutory dues have not been regularlydeposited with the appropriate authorities and there have number of cases. 189 of the

(b) According to the information and no undisputed amounts payable inrespect of provident fund employees state insurance income-tax service tax sales-taxduty of custom duty of excise value added tax goods and service tax cess and otherstatutory dues were outstanding at the year end for a period of more189 of the than sixmonths from the date they became payable.

(c) According to the records of the Company and the information andexplanations dues of sales-tax duty of custom duty of excise value added tax goods andservice tax and cess on account of any dispute except the disputed dues on account ofservice tax and income tax are as follows:

Name of the statute Nature of the dues Amount (Rs.) Amount paid under protest (Rs.) Period to which the amount relates Forum where the dispute is pending
The Finance Act 1994 Service Tax 95638624 8554596 April 2006 to September 2010 Customs Excise and Service Tax Appellate Tribunal Bangalore
The Income Tax Act 1961 Income Tax 19442731 4000000 Financial Year 2015-16 Commissioner of Income Tax (Appeals)

(viii) In our opinion and according to the information and explanationsgiven by the Management the Company has not defaulted in repayment of loans or borrowingto banks.

The Company did not have any loans or borrowing from the government ordues to debenture holders during the year.

(ix) According to the information and explanations 177 and 188 ofCompanies Act 2013 Management the Company has not raised any money way of initial publicoffer / further public offer/debt statements as required our opinion and according to theinformation given by the Management the Company has monies raised by way of term loansfor the purpose given to us for which it was obtained.

(x) Based upon the audit procedures performed for the purpose ofreporting the true and fair view of the Ind AS financial statements and according to theinformation and explanations given by the Management we report that no fraud by theCompany or no fraud on the Company by the officers employees of the Company has beennoticed or reported during the year.

(xi) According to the information and explanations given by theManagement the managerial remuneration has been paid / provided in accordance with therequisite approvals mandated by the provisions of Section Companies Act 2013.

(xii) In our opinion the Company is not a nidhi Company. Thereforethe provisions of clause 3(xii) of the Order are not applicable to the Company and hencenot commented upon.

(xiii) According to the information and explanations given by theManagement transactions with the related parties are in compliance with Sections whereapplicable and the details have been disclosed in the In notes to Standalone Ind AS theapplicable accounting explanations utilized the (xiv) According to the information andexplanations on an overall examination of the balance sheet the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year under review and hence reporting requirements under clause3(xiv) are not applicable to the Company and hence not commented upon.

(xv) According to the information and explanations given by the

Management the Company has not entered into any non-cash transactionswith directors or persons connected with him as referred to in Section 192 of CompaniesAct 2013.

(xvi) According to the information and explanations given to us theprovisions of Section 45-IA of the Reserve Bank of India Act 1934 are not applicable tothe Company.

Annexure - A to the Auditors Report

Annexure 2 to the Independent Auditors Report of even date on theStandalone Ind As Financial Statements of Axiscades Engineering Technologies Limited

REPORT ON THE INTERNAL FINANCIAL CONTROLS UNDER CLAUSE (I) OFSUB-SECTION 3 OF SECTION 143 OF THE COMPANIES ACT 2013 ("THE ACT")

We have audited the internal financial controls over financialreporting Company") as of March 31 2020 in conjunction with our audit of thestandalone Ind AS financial statements of the Company for the year ended on that date.

MANAGEMENTS RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS

The Companys Management is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting issued by the Institute of Chartered Accountants of India. Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientof its business including adherence to the Companys policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under the Companies Act 2013.

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on the Companys internalfinancial controls over financial reporting with reference to these standalone Ind ASfinancial statements based on our audit. We conducted our audit in accordance with theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting"Guidance Note") and the Standards on Auditing as specified under Section143(10)of the Companies Act 2013 to the extent applicable to an audit of internal financialcontrols and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting with reference to these standalone Ind ASfinancial statements was established and maintained and if such controls operatedeffectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls over financial reporting with reference tothese standalone Ind statements AS financial statements and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reporting withreference to these standalone Ind AS financial statements of assessing the risk that amaterial weakness exists and testing and AXISCADES Engineering Technologies Limited("the evaluating the design and operating effectiveness of internal control based onthe assessed risk. The procedures selected depend on the auditors judgment including theassessment of the risks of material misstatement of the standalone Ind AS financialwhether due to fraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the internal financial controlsover financial reporting with reference to these standalone Ind AS financial statements.

MEANINGOFINTERNALFINANCIALCONTROLSOVERFINANCIAL REPORTING WITHREFERENCE TO THESE STANDALONE IND AS FINANCIAL STATEMENTS

A Companys internal financial control over financial reporting withreference to these standalone Ind AS financial statements is a process designed to providereasonable assurance regarding the reliability of financial reporting and the preparationof standalone Ind AS financial statements for external purposes in accordance withgenerally accepted accounting principles. A Companys internal financial control overfinancial reporting with reference to these standalone Ind AS financial statementsincludes those policies and procedures that (1) pertain to the maintenance of recordsthat in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the Company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit (the preparation of standalone Ind ASfinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the Company are being made only in accordance withauthorisations of Management and directors of the Company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorised acquisition use ordisposition Companys assets that could have a material effect on the standalone Ind ASfinancial statements.

INHERENT LIMITATIONS OF INTERNAL FINANCIAL CONTROLS OVER FINANCIALREPORTING WITH REFERENCE TO THESE STANDALONE IND AS FINANCIAL STATEMENTS

Because of the inherent limitations of internal financial controls overfinancial reporting with financial the possibility of collusion or improper Managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls overfinancial reporting with reference to these standalone Ind AS financial statements tofuture periods are subject to the risk that the internal financial control over financialreporting with reference to these standalone Ind AS financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

OPINION

In our opinion the Company has in all material respects adequateinternal financial controls over financial reporting with reference to these standaloneInd AS financial statements and such internal financial controls over financial reportingwith reference to these standalone Ind AS financialstatements were operating effectivelyas at March 31 2020 based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India.

For S.R. Batliboi & Associates LLP
Chartered Accountants
ICAI Firm Registration Number:
Sd/-
per Sunil Gaggar
Partner
Place of Signature: Bengaluru Membership Number: 104315
Date: June 27 2020 UDIN: 20104315AAAABT8891