To the Members of City Online Services Limited
Report on the Financial Statements
We have audited the accompanying financial statements of City Online Services Limited("the Company") which comprise the Balance Sheet as at March 31 2015 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of the significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the Act") with respect to the preparation ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.
Our responsibility is to express an opinion on these financial statements based on ouraudit. We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder. We conducted our audit in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.
An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the financial statements. The procedures selected depend on theauditors judgment including the assessment of the risks of material misstatement ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Companyspreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances but not for the purpose ofexpressing an opinion on whether the Company has in place an adequate internal financialcontrols system over financial reporting and the effectiveness of such controls. An auditalso includes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by the Actin the manner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India;
a) in the case of the Balance Sheet of the state of affairs of the Company as at March31 2015;
b) in the case of the Statement of Profit and Loss of the loss for the year ended onthat date; and
c) in the case of the Cash Flow Statement of the cash flows for the year ended on thatdate. Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2015 ("theorder") issued by the Central Government of India in terms of sub-section (11) ofSection 143 of the Act we give in the Annexure a statement on the matters specified inparagraphs 3 and 4 of the Order.
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 bestof our knowledge and belief were necessary for the purposes of our audit.
(b) In our opinion proper books of account as required by the law have been kept bythe Company so far as it appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this Report are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.
(e) On the basis of the written representations received from the directors as on March31 2015 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2015 from being appointed as a director in terms of Section 164 (2) of theAct.
(f) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule
11 of the Companies (Audit and Auditors) Rules 2014 in our opinion and to the best ofour information and according to the explanations given to us:
i. The Company does not have any pending litigations which would impact its financialposition;
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;
iii. There are no amounts which are required to be transferred to the InvestorEducation and Protection Fund by the Company.
Annexure referred to in paragraph 1 of our report of even date Re: City Online ServicesLimited (the Company')
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) Fixed assets have been physically verified by the management during the year and nomaterial discrepancies were identified on such verification.
(ii) In respect of its inventory:
(a) As explained to us the inventories were physically verified during the year by theManagement at reasonable intervals.
(b) In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventory followed by the Management werereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.
(c) In our opinion and according to the information and explanations given to us theCompany has maintained proper records of its inventories and no material discrepancieswere noticed on physical verification.
(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms or other parties covered inthe register maintained under section 189 of the Companies Act 2013. Accordingly theprovisions of the clause 3(iii)(a) and (b) of the Companies (Auditor's Report) Order 2015are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to usthere are adequate internal control systems commensurate with the size of the Company andthe nature of its business for the purchase of inventory and fixed assets and for the saleof goods and services. During the course of our audit we have not observed any majorweakness in such internal control system.
(v) The Company has not accepted any deposits from the public.
(vi) The maintenance of cost records is not specified by the Central Government.
(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed
statutory dues including provident fund employees state insurance income taxservice tax sales tax customs duty value added tax and other statutory dues applicableto it. Provisions of wealth tax excise duty and cess are not applicable to the Company.
(b) According to the information and explanations given to us no undisputed amounts inrespect of provident fund employees' state insurance income tax service tax and othermaterial statutory dues which were outstanding at the year end for a period of more thansix months from the date they became payable except as given below:
|Statute ||Nature of Dues ||Period to which the amount relates ||Amount |
|Income Tax Act 1961 ||Income Tax ||2013-14 ||267217 |
|Finance Act 1994 ||Service Tax ||2011-12 ||1609013 |
(c) There are no amounts which are required to be transferred to the Investor Educationand Protection Fund by the Company.
(viii) The Company has accumulated losses at the end of the financial year and it hasnot incurred cash losses in the current and immediately preceding financial year.
(ix) The Company has not defaulted in repayment of loans taken from banks.
(x) According to the information and explanations given to us the company has notgiven any guarantee for loans taken by others from bank or financial institutions;
(xi) The term loans were applied for the purpose for which the loans were obtained;
(xii) Based upon the audit procedures performed for the purpose of reporting the trueand fair view of the financial statements and as per the information and explanationsgiven by the management we report that no fraud on or by the Company has been noticed orreported during the year.
| ||For SESHACHALAM & CO |
| ||Chartered Accountants |
| ||Firm registration number: 003714S |
| ||T. Bharadwaj |
|Place: Hyderabad ||Partner |
|Date: May 29 2015 ||Membership No. 201042 |