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Cambridge Technology Enterprises Ltd.

BSE: 532801 Sector: IT
NSE: CTE ISIN Code: INE627H01017
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OPEN 59.50
PREVIOUS CLOSE 58.35
VOLUME 13494
52-Week high 97.70
52-Week low 22.90
P/E 41.11
Mkt Cap.(Rs cr) 109
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 59.50
CLOSE 58.35
VOLUME 13494
52-Week high 97.70
52-Week low 22.90
P/E 41.11
Mkt Cap.(Rs cr) 109
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Cambridge Technology Enterprises Ltd. (CTE) - Auditors Report

Company auditors report

To the Members of Cambridge Technology Enterprises Report on the Auditof the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of CambridgeTechnology Enterprises Limited ("the Company") which comprise the Balance Sheetas at 31st March 2020 and the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Cash Flow Statement forthe year then ended and notes to the standalone financial statements including a summaryof significant accounting policies and other explanatory information (hereinafter referredto as "the standalone financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid standalone financial statements give theinformation required by the Companies Act 2013 ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2020and its profit (including other comprehensive income) changes in equity and its cashflows 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 thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone 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 standalone financial statements under the provisions of the Act and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics issued by the Institute of Chartered Accountantsof India. We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professionaljudgement were of most significance in our audit of the standalone financial statementsof the current period. These matters were addressed in the context of our audit of thestandalone financial statements as a whole and in forming our opinion thereon and we donot provide a separate opinion on these matters. We have determined the matters describedbelow to be the key audit matters to be communicated in our report.

Sr. Key Audit Matter No. Auditor's Response
1. Transactions with related parties - Revenue Recognition Principal Audit Procedures
A significant part of the revenue generated during the year arose out of transactions with the wholly owned subsidiary of the Company (Refer Note 39 to the Standalone Financial Statements). Due to the materiality involved the revenue requires to Our audit procedures include-
• Testing controls over sales process to related parties including application of margin based on the agreement.
• Testing the supporting documentation for sales transactions including transfer pricing documentation
be recognized at arms-length. prepared by the Company. We involved tax specialists to assess the key assumptions made by the management.
• Assessing the application of the Company's transfer pricing documentation in executing business transactions.
2. Evaluation of uncertain tax positions Principal Audit Procedures
The Company has material uncertain tax positions including matters under dispute which involves significant management judgment to determine the possible outcome of these disputes. (Refer Note No 37 to the Standalone Financial Statements ) Obtained details of completed tax assessments and demands for the year ended March 31 2020 from management. We involved our internal experts to challenge the management's underlying assumptions in estimating the tax provision and the possible outcome of the disputes. Our internal experts also considered legal precedence and other rulings in evaluating management's position on these uncertain tax positions. Additionally we considered the effect of new information in respect of uncertain tax positions as at April 1 2019 to evaluate whether any change was required to management's position on these uncertainties.
3. Impairment for investments in subsidiaries Principal Audit Procedures
The Company has significant investments in subsidiaries recorded at cost. Our audit procedures include:
Impairment of investment in subsidiaries is considered as a key audit matter due to the materiality of investments. Management applies judgement in evaluating whether indicators of impairment are present. • Testing of controls over the review of the impairment analysis for investments.
• Assessed management's assessment of indicators of impairment for reasonableness.
• Evaluated the adequacy of the disclosures in accordance with the requirements of Ind AS.

Other Information

The Company's Board of Directors is responsible for the otherinformation. The other information comprises the information included in the Annual Reportbut does not include the standalone financial statements consolidated financialstatements and our auditor's report thereon.

Our opinion on the standalone financial statements does not cover theother information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statementsour responsibility is to read the other information identified above when it becomesavailable and in doing so consider whether the other information is materiallyinconsistent with the standalone financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Emphasis of Matter

The management of the Company is of the opinion that the investments insubsidiaries have a realizable value not lesser than the book value. Further whereapplicable the downstream investments of the respective subsidiaries are expected tocarry valuations that will not lead to any diminution in value of the Company'sinvestments. (Refer Note 5.1 of the standalone financial statements). We have relied onthe same and our opinion is not modified in respect of this matter.

Responsibilities of Management and Those Charged with Governance forthe Standalone Financial Statements

The Company's Board of Directors is responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these standalone financialstatements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the accounting standardsspecified under section 133 of the Act. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.

In preparing the standalone financial statements the Board ofDirectors is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless the Board of Directors either intends to liquidate theCompany or to cease operations or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the Standalone FinancialStatements

Our objectives are to obtain reasonable assurance about whether thestandalone financial statements as a whole are free from material misstatement whetherdue 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 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 financial statements.

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

• Identify and assess the risks of material misstatement of thestandalone financial statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate 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 fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof internal control.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating

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 management's 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 significant doubt on theCompany's ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditor's report to therelated disclosures in the standalone financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thestandalone financial statements including the disclosures and whether the standalonefinancial statements represent the underlying transactions and events in a manner thatachieves fair presentation.

Materiality is the magnitude of misstatements in the standalonefinancial statements that individually or in aggregate makes it probable that theeconomic decisions of a reasonably knowledgeable user of the standalone financialstatements may be influenced. We consider quantitative materiality and qualitative factorsin (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 financialstatements.

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

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.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the standalonefinancial statements of the current period and are therefore the key audit matters. Wedescribe these matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act we report that:

a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

b) In our opinion proper books of account as required by law have beenkept by the Company so far as it appears from our examination of those books.

c) The Balance Sheet the Statement of Profit and Loss (including OtherComprehensive Income) Statement of Changes

in Equity and the Cash Flow Statement dealt with by this report are inagreement with the books of account.

d) In our opinion the aforesaid standalone financial statements complywith Accounting Standards specified under Section 133 of the Act.

e) On the basis of the written representations received from thedirectors as on 31st March 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2020 from being appointed as a director interms of Section 164 (2) of the Act.

f) With respect to the adequacy of the internal financial controls overfinancial reporting of the Company and the operating effectiveness of such controls referto our separate Report in "Annexure A".

g) In our opinion and to the best of our information and according tothe explanations given to us the remuneration paid by the Company to its directors duringthe year is in accordance with the provision of section 197 of the Act.

h) With respect to the other matters to be included in the Auditor'sReport in accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 asamended in our opinion and to the best of our information and according to theexplanations given to us:

i. The Company has disclosed the impact of pending litigations on itsfinancial position in its standalone financial statements (Refer Note 37 of the standalonefinancial statements);

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.

2. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of Section 143(11) of the Act we give in "Annexure B" a statement on the matters specified inparagraphs 3 and 4 of the Order.

For M. Anandam & Co.
Chartered accountants
(Firm Registration No.000125S)
M. V. Ranganath
Partner
Membership No. 028031
UDIN: 20028031AAAAFH8880
Place: Hyderabad
Date: 22.06.2020

Annexure "A" to the Independent Auditor's Report

(Referred to in paragraph 1(f) under 'Report on Other Legal andRegulatory Requirements' section of our report of even date)

Report on the Internal Financial Controls Over Financial Reportingunder Clause (i) of Sub-section 3 of Section 143 of the Companies Act 2013 ("theAct")

We have audited the internal financial controls over financialreporting of Cambridge Technology Enterprises Limited ("the Company") as of 31March 2020 in conjunction with our audit of the standalone financial statements of theCompany for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control over financialreporting criteria established by the Company considering the essential components ofinternal control stated in the Guidance Note on Audit of Internal Financial Controls overFinancial Reporting issued by the Institute of Chartered Accountants of India (''ICAI'').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internalfinancial controls over financial reporting based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls over FinancialReporting (the "Guidance Note") and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols both applicable to an audit of Internal Financial Controls. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls system over financial reporting and theiroperating effectiveness. Our audit of internal financial controls over financial reportingincluded obtaining an understanding of internal financial controls over financialreporting assessing the risk that a material weakness exists and testing and evaluatingthe design and operating effectiveness of internal control based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error.

We believe that the audit evidence we have obtained is sufficient andappropriate to provide a basis for our audit opinion on the Company's internal financialcontrols system over financial reporting.

Meaning of Internal Financial Controls over Financial Reporting

A company's internal financial control over financial reporting is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls over FinancialReporting

Because of the inherent limitations of internal financial controls overfinancial reporting including 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 to future periods are subject to the risk that the internal financialcontrol over financial reporting may become inadequate because of changes in conditionsor that the degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to theexplanations given to us the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31 March 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.

For M. Anandam & Co.
Chartered Accountants
(Firm's Registration No. 000125S)
M.V. Ranganath
Partner
Membership No. 028031
UDIN: 20028031AAAAFH8880
Place: Hyderabad
Date: 22.06.2020

Annexure - B to the Independent Auditors' Report

With reference to paragraph 2 under "Report on Other Legal andRegulatory Requirements" section of our report of even date to the Members of theCompany we report that:

(i) (a) The Company has maintained proper records showing fullparticulars including quantitative details

and situation of fixed assets.

(b) The fixed assets have been physically verified by the management ina periodical manner which

in our opinion is reasonable having regard to the size of the Companyand the nature of its business. No material discrepancies were noticed on suchverification.

(c) The Company does not own any immovable properties. Accordinglyreporting under clause (i) (c)

of the Order is not applicable to the Company.

(ii) The Company does not have any inventories. Accordingly reportingunder clause 3 (ii) of the Order is not applicable to the company.

(iii) The company has not granted any loans secured or unsecured tocompanies firms Limited Liability Partnerships or other parties covered in the registermaintained under section 189 of the Act during the year. The loan which was granted to oneparty in earlier years was received during the year.

(iv) In our opinion and according to the information and explanationsgiven to us the Company has made investments and granted loans which is in compliancewith the provisions of Section 185 and 186 of the Act. The Company has not providedguarantees and securities.

(v) According to the information and explanations given to us theCompany has not accepted deposits within the meaning of Sections 73 to 76 of the Act andthe rules framed thereunder. Accordingly reporting under clause 3 (v) of the Order is notapplicable to the company.

(vi) Maintenance of cost records has not been specified by the CentralGovernment under sub-section (1) of Section 148 of the Act. Accordingly reporting underclause 3 (vi) of the Order is not applicable to the company.

(vii) (a) According to the information and explanations given to us andthe records of the Company

examined by us the Company is generally regular in depositingundisputed statutory dues including provident fund employees' state insuranceincome-tax goods and services tax customs duty cess and any other statutory dues asapplicable with the appropriate authorities and there were no arrears of outstandingstatutory dues as at the last day of the financial year concerned for a period of morethan six months from the date they became payable.

(b) According to the information and explanations given to us andrecords of the Company examined by us the particulars of income tax goods and servicestax customs duty or cess as at 31st March 2020 which have not been depositedon account of any dispute pending are as under:

Name of the statute Nature of the dues Amount (Rs. in '000) Period to which the amount relates Forum where the dispute is pending
Income-tax Act 1961 Income tax 1766.00 AY 2011-12 CIT (Appeals)
Income-tax Act 1961 Income tax 743.37 AY 2012-13 ITAT Hyderabad
Income-tax Act 1961 Income tax 70910.98 AY 2013-14 ITAT Hyderabad
Income-tax Act 1961 Income tax 7252.66 AY 2014-15 ITAT Hyderabad

(viii) In our opinion and according to the information and explanationsgiven to us the Company has not defaulted in repayment of loans or borrowings tofinancial institutions and banks. The Company has not taken any loans from the governmentand has not issued any debentures.

(ix) The Company has not raised moneys by way of initial public offeror further public offer (including debt instruments) during the year. In our opinion andaccording to the information and explanations given to us the term loans and moniesraised by way of preferential allotment of share warrants have been applied for thepurpose for which the loans/share warrants were obtained/issued.

(x) To the best of our knowledge and belief and according to theinformation and explanations given to us no fraud on or by the Company was noticed orreported during the year.

(xi) In our opinion and according to the information and explanationsgive to us the Company has paid / provided managerial remuneration in accordance with therequisite approvals mandated by the provisions of section 197 read with Schedule V to theAct.

(xii) The Company is not a Nidhi Company and hence reporting underclause 3(xii) of the Order is not applicable.

(xiii) In our opinion and according to the information and explanationsgiven to us and based on our examination of the records of the Company transactions withthe related parties are in compliance with section 177 and 188 of the Act where applicableand details of such transactions have been disclosed in the standalone financialstatements as required by the applicable Accounting Standards.

(xiv) According to the information and explanations given by themanagement the Company has complied with provisions of Section 42 of the Companies Act2013 in respect of preferential allotment of share warrants during the year. The Companyhas not made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year. The funds raised have been utilized for thepurpose for which it has been raised except for Rs 88.09 thousands which is in the form ofbank balance.

(xv) In our opinion and according to the information and explanationsgiven to us and based on our examination of the records of the Company the Company hasnot entered into any non-cash transactions with directors or persons connected with himand hence provisions of section 192 of the Act are not applicable.

(xvi) The Company is not required to be registered under section 45-IAof the Reserve Bank of India Act 1934.

For M. Anandam & Co.
Chartered accountants
(Firm Registration No.000125S)
M. V. Ranganath
Partner
Membership No. 028031
UDIN: 20028031AAAA FH8880
Place: Hyderabad
Date: 22.06.2020

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