TO THE MEMBERS OF EVERONN EDUCATION LIMITED
Report on the Financial Statements
We have audited the accompanying standalone financial statements of Everonn EducationLimited ("the Company") which comprise the Balance Sheet as at March 31 2016the Statement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.
We were engaged to audit the accompanying standalone financial statements of EveronnEducation Limited ("the Company") which comprise the Balance Sheet as at March31 2016 the Statement of Profit and Loss the Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Standalone 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 standalone financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules2014. This responsibility also 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 design implementation and maintenance of adequate internalfinancial controls and ensuring their operating effectiveness and the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe standalone financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions of the Act and the Rules made thereunder. We conducted our audit inaccordance with the Standards on Auditing specified under Section 143(10) of the Act.Those Standards require that we comply with ethical requirements and plan and perform theaudit to obtain reasonable assurance about whether the standalone financial statements arefree from material misstatement. An audit involves performing procedures to obtain auditevidence about the amounts and disclosures in the standalone financial statements. Theprocedures selected depend on the auditors' judgment including the assessment of therisks of material misstatement of the standalone financial statements whether due tofraud or error. In making those risk assessments the auditor considers internal financialcontrol relevant to the Company's preparation of the standalone financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone financialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion/qualified audit opinion/adverse audit opinion on thestandalone financial statements.
Basis for Qualified Opinion
1) Reference is invited to Note No 1.2 (c) regarding preparation of financialstatements without the underlying "Going Concern" assumption but on Realizationbasis. Though provisions have been made by charge to Profit and Loss account of Rs.6951664467 grouped under "Exceptional items" in this regard the company hasnot made provisions in connection with the following a) In respect of Guarantees ofRs.4646700000 given on behalf of group entities who have prepared their financialstatements on realization basis. However the company had provided for the underlying loansin the subsidiaries and has no impact on consolidation. Refer Note No 2.25 (c) b) Leaserental claims amounting to 546827315 against the company for which company iscontemplating counter claims. Refer Note No 2.30
2) We draw attention to Note No 2.29. The company has filed complaints with certainregulatory authorities with regard to various transactions done by erstwhile promoters andtheir associates with various third parties under which advances were paid by the companyand/or its associated affiliated entities/ subsidiaries. We are unable to comment on thepossible financial impact of the outcome of such legal proceedings.
3) We draw attention to Note No 2.34 regarding non ascertainment of completeparticulars of dues to Micro small and medium enterprises if any under MSMED Act2006and provision towards interest if anyis not ascertained at this stage which is not inconformity with para 14 of Accounting standard 29 'Provision contingent Liabilities andcontingent Assets'.
4) We draw attention to Note No 2.36of financial statements with regard to non receiptof confirmation of balances from debtors including dues from government companies loansand advances investments banks sundry creditors and other liabilities. Pending receiptof confirmation of these balances and consequential reconciliations / adjustments ifanythe resultant impact on the statement is not ascertainable. However the company hasmade provisions under exceptional items for all doubtful debts/liabilities as statedabove.
5) We draw attention to Note No 2.39 (b) towards non provision for leave encashment asspecified under accounting standard 15 issued by ICAI. In absence of Actuarial valuationwe are unable to ascertain the effect of such non provisioning.
In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects/possible effects of the matter described in the Basisfor Qualified Opinion paragraph the aforesaid standalone financial statements give theinformation required by theAct in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2016 its loss and its cash flows for the yearended on that date.
The financial statements of the Company for the year ended March 31 2015 were auditedby another auditor who expressed a modified opinion on those financial statements on May30 2015.
Our opinion is not modified in respect of this matter.
Report on Other Legal and Regulatory Requirements
(1) As required by the Companies (Auditors' Report) Order 2016 ("theOrder")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Actwe give in "Annexure 1" a statement on the matters specified inparagraphs 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 andobtained all the information and explanations which to the best of our knowledge andbelief were necessary for the purposes of our audit; b. In our opinion proper books ofaccount as required by law have been kept by the Company so far as it appears from ourexamination of those books; c. The Balance Sheet the Statement of Profit and Loss andthe Cash Flow Statement dealt with by this Report are in agreement with the books ofaccount d. Except for the possible effects of the matter described in the basis ofqualified opinion para above in our opinion the aforesaid financial statements complywith the Accounting standards specified under section 133 of the Act read with rule 7 ofthe Companies (Accounts) Rules 2014.
The matter described in sub-paragraphs under the Basis for Qualified Opinion paragraphabove in our opinion may have an adverse effect on the functioning of the Company; Onthe basis of written representations received from the directors as on March 31 2016 andtaken on record by the Board of Directors none of the directors is disqualified as onMarch 31 2016from being appointed as a director in terms of Section 164 (2) of the Act;With respect to the adequacy of the internal financial controls over financial reportingof the Company and the operating effectiveness of such controls we give our separateReport in "Annexure 2". With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules2014 in our opinion and to the best of our information and according to the explanationsgiven to us:
(i) The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements - Refer Note 2.25 on ContingentLiabilities; (ii) The Company did not have any long-term contracts including derivativecontracts. Hence the question of any material foreseeable losses does not arise; (Hi)There were no amounts which were required to be transferred to the Investor Education andProtection Fund by the Company.
For Haribhakti & Co. LLP
ICAI Firm Registration No.103523W
G.N. Ramaswami Partner
Place : Chennai
Date : May 29 2016
ANNEXURE 1 TO THE INDEPENDENT AUDITOR'S REPORT
[Referred to in paragraph 1 under 'Report on Other Legal and Regulatory Requirements'in the Independent Auditor's Report of even date to the members of Everonn EducationLimited on the standalone financial statements for the year ended 31st March 2016]
Based on the audit procedures performed for the purpose of reporting true and fairview of the financial statements of the company and taking into consideration theinformations and explanations given to us and the books of accounts and other recordsexamined by us in the normal course of audit we report that; i. (a) The Company hasmaintained proper records showing full particulars including quantitative details andsituation of fixed assets.
(b) During the year the fixed assets of the Company have been physically verified bythe management and as informed material discrepancies identified on such verificationhave been properly dealt with in the books of account. In our opinion the frequency ofverification is reasonable having regard to the size of the Company and the nature of itsassets.
(c) The immovable property of the company is hypothecated with the lenders and hence wecould not verify whether the title deeds of immovable properties recorded as fixed assetsin the books of account of the Company are held in the name of the Company. ii. Thecompany did not hold any inventory during the year accordingly matters specified inparagraph 3 (ii) of the order is not applicable to the company. iii. The Company hasgranted unsecured loans to companies firms Limited Liability Partnerships or otherparties covered in the register maintained under Section 189 of the Act.
(a) According to the information and explanations given to us and based on the auditprocedures conducted by us we are of the opinion that in the absence of stipulationsabout principal and interest and other terms and conditions these loans are prejudicialto the interest of the company which have been provided for.
(b) In view of (a) above we are unable to comment on Para 3 (iii) (b) (c) & (d) ofthe Order. iv. Based on information and explanation given to us the company has not givenany loans guarantees and securities during the year attracting the provisions of Section185 and 186 of the Act. v. In our opinion and according to the information andexplanations given to us the Company has not accepted any deposits from the public withinthe provisions of Sections 73 to 76 of the Act and the rules framed there under. vi. TheCentral Government has not prescribed the maintenance of cost records for any of theproducts of the Company under sub-section (1) of Section 148 of the Act and the rulesframed there under. vii. (a) The Company is generally regular in depositing withappropriate authorities undisputed statutory dues including provident fund employees'state insurance income tax sales tax service tax value added tax customs duty exciseduty cess and any other material statutory dues applicable to it however there havebeen slight delay in few cases / delays in deposit have not been serious.
(b) According to the information and explanations given to us undisputed dues inrespect of provident fund employees' state insurance income tax sales tax service taxvalue added tax customs duty excise duty cess and any other material statutory duesapplicable to it which were outstanding at the year end for a period of more than sixmonths from the date they became payable are as follows:
|Name of the Statute ||Nature of Dues ||Amount Rs. ||Period to which the amount relates ||Date of Payment || |
|Tamil Nadu Panchayats Act 1994 ||Professional tax ||1962005 ||Upto 2014-2015 ||March 31 2015 ||Outstanding as on Date of audit report |
|Tamil Nadu Panchayats Act 1994 ||Professional tax ||103869 ||FY 15-16 ||March 31 2016 ||Outstanding as on Date of audit report |
| || ||2065874 || || || |
(b) According to the information and explanation given to us there are no dues withrespect to income tax sales tax service taxvalue added tax customs duty excise dutywhich have not been deposited on account of any dispute.
(viii) According to the information and explanations given to us the Company hasdefaulted in repayment of loans or borrowings to financial institutions or banks asmentioned below:
|Particulars ||Amount of default as at March 31 2016 (along with interest) (Rs.) ||Period of Default |
|) Name of the Lenders: i || || |
|I n case of: || || |
|Financial Institution || || |
|CISCO Finance Limited ||Rs. 6000000 || |
|HP Financial Services ||Rs. 190254733 || |
|Reliance Capital ||Rs. 321940830 || |
|Bank || || |
|Standard Chartered Bank || || |
|ICICI Bank ||Rs. 251178422* || |
|State Bank of India ||Rs. 7234408# || |
|Axis bank ||Rs. 37844292# || |
| ||Rs. 33351604# || |
* Includes Principal and interest
# Since principal repayment begins only in FY 2016-17 interest defaults have beendisclosed.
In our opinion and according to the information and explanations given to us theCompany has not reported any unutilized amount in respect of money raised by way ofinitial public offer and has not raised any money through initial public offer during theyear. There were no fresh term loans during the year.
(x) We draw reference to Note No.2.29 to the financial statements regarding complaintswith regulatory authorities with reference to certain transactions for the period upto2011. Other than the above during the course of our examination of the books and recordsof the Company carried out in accordance with the generally accepted auditing practicesin India and according to the information and explanations given to us we have neithercome across any instance of fraud by the Company or any fraud on the Company by itsofficers or employees noticed or reported during the year nor have we been informed ofany such instance by the management.
(xi) According to the information and explanations given to us managerial remunerationhas been paid / provided in accordance with the requisite approvals mandated by theprovisions of Section 197 read with Schedule V to the Act.
(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi Company. Therefore paragraph 3(xii) of the Order is not applicableto the Company.
(xiii) According to the information and explanation given to us all transactionsentered into by the Company with the related parties are in compliance with Sections 177and 188 ofAct where applicable and the details have been disclosed in the FinancialStatements etc. as required by the applicable accounting standards. (xiv) The Company hasnot made any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review. Therefore paragraph 3(xiv) of theOrder is not applicable to the Company.
(xv) According to the information and explanations given to us the Company has notentered into any non-cash transactions with directors or persons connected with him duringthe year.
(xvi) According to the information and explanation given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
For Haribhakti & Co. LLP
Chartered Accountants ICAI
Firm Registration No.103523W
Place : Chennai
Date : May 29 2016
ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT
[Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'in the Independent Auditor's Report of even date to the members of Everonn EducationLimited on the standalone financial statements for the year ended March 31 2016] Reporton the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act2013 ("the Act")
We were engaged to audit the internal financial controls over financial reporting ofEveronn Education Limited ("the Company") as of March 31 2016 in conjunctionwith our audit of the standalone financial statements of the Company for the year ended onthat date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls 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 ("ICAI"). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the"Guidance Note") and the Standards on Auditing to the extent applicable toan audit of internal financial controls both issued by the ICAI.
Because of the matter described in Disclaimer of Opinion paragraph below we were notable to obtain sufficient appropriate audit evidence to provide a basis for an auditopinion on internal financial controls system over financial
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A compact's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that 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 preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Disclaimer of Opinion
According to the information and explanation given to us the Company started theprocess of establishing its formal internal financial control over financial reporting oncriteria based on or considering the essential components of internal control stated inthe Guidance Note issued by ICAI and the same were not completed before the year end.
Because of this reason we are unable to obtain sufficient appropriate audit evidenceto provide a basis for our opinion whether the Company had adequate internal financialcontrols over financial reporting and whether such internal financial controls wereoperating effectively as at March 31 2016.
We have considered the disclaimer reported above and the existing compensatory controlsand procedures of the management in the internal financial control over financialreporting in determining the nature timing and extent of audit tests applied in ouraudit of the standalone financial statements of the Company and the disclaimer does notaffect our opinion on the standalone financial statements of the Company.
For Haribhakti & Co. LLP
ICAI Firm Registration No.103523W
Date : May 29 2016