To the Members of Khoday India Limited.
1. Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Khoday IndiaLimited ("the Company") which comprise the Balance Sheet as at 31stMarch 2017 the Statement of Profit and Loss and Cash Flow Statement for the year thenended and a summary of significant accounting policies and other explanatory information.
2. Management's Responsibility for Standalone Financial Statements
The Company's Board of Directors is responsible for the matters in section 134(5) ofthe Companies Act 2013 ("the Act") with respect to the preparation of thesestandalone financial statements on a going concern basis that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provision of the Act for safeguardingof the assets of the Company and for preventing & detecting the frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design and implementation ofadequate Internal Financial Controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
3. Auditor's Responsibility
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 accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act Those Standards require that we comply with ethicalrequirements and pian and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgment including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit procedures thatare appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Company's Directors as well as evaluating the overall presentation ofthe financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India:
a) in the case of the Balance Sheet of the state of affairs of the Company as at 31stMarch 2017;
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.
5. Emphasis of Matter
We draw attention to Note no. 28 regarding Reduction of Capital under Section 100 ofthe Companies Act 1956 confirmed by the Hon'ble High Court of Karnataka and appeal filedby SEBI.
Our opinion is not qualified in respect of this matter.
6. Report on Other Legal and Regulatory Requirements
I) As required by the Companies(Auditor's Report) Order 2016("the Order")issued by the Central Government of India in terms of sub-section(11) of section 143 ofthe Act we give in the Annexure - A a statement on the matters specified in paragraphs 3and 4 of the Order.
II) 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 law have been kept by theCompany so far as appears from our examination of those books.
c) The Balance Sheet Statement of Profit and Loss and Cash Flow Statement dealt withby this Report are in agreement with the books of account.
d) In our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies(Accounts) Rules 2014.
e) On the basis of written representations received from the directors as on 31stMarch 2017 and taken on record by the Board of Directors none of the directors aredisqualified as on 31st March 2017 from being appointed as a director underSection 164(2) of the Act.
f) With respect to the adequacy of Internal Financial Control over Financial Reportingof the Company and operating effectiveness of such controls refer to our separate reportin "Annexure - B"
g) With respect to the other matters included in the Auditor's Report in accordancewith Rule 11 of the Companies(Audit and Auditors) Rules 2014 in our opinion and to thebest of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigation on its financial positionin its financial statements vide Note no. 27 Note No. 28 and Note no. 41 to the FinancialStatements.
ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii. There were no amounts that were required to be transferred to the InvestorEducation and Protection Fund by the Company.
iv. The company had provided requisite disclosures in its financial statements as toholdings as well as dealings in Specified Bank Notes during the period from 8th November2016 to 30th December 2016 and the same were in accordance with the books of accountsmaintained by the Company.
for RANGARAJU AND ASSOCIATES CHARTERED ACCOUNTANTS
(KRISHNAN RANGARA$^ PARTNER
Membership No. 018fj5v Firm No. 00691251
Place : Bangalore
Date : 07.06.2017
ANNEXURE - A TO THE AUDITOR'S REPORT
(Referred to in Para 6 of our report of even date)
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) We have been informed that the fixed assets of the Company are physically verifiedby the Management according to a phased program designed to cover all the items over aperiod of three years which in our opinion is reasonable having regard to the size ofthe Company and the nature of its assets. Pursuant to the program physical verificationwas carried out during the year and to the best of our knowledge no material discrepancieswere noticed.
(c) The title deeds of immovable properties are held in the name of the Company.
ii. As explained to us Inventories have been physically verified by the management atreasonable intervals during the year and no material discrepancies were noticed.
iii. The Company has not granted any Loans secured or unsecured to Companies firmsLimited Liability Partnerships or other parties covered in the Register maintained underSection 189 of the Companies Act 2013. As the Company has not granted any loans toCompanies firms Limited Liability Partnerships or other parties covered in the Registermaintained under Section 189 of the Companies Act 2013 reporting under Clauses (iii)(a) (iii) (b) and (iii) (c) of the Companies (Auditors Report) order 2016 does notarise.
iv. There are no loans guarantees or security extended by the Company under theprovisions of Section 185 and 186 of the Companies Act 2013. In respect of Investmentsmade the Company has complied with the provisions of Section 186 of the Companies Act2013.
v. In our opinion and according to the information and explanations given to us theCompany has not accepted any deposits from the public within the meaning of Section 73 to76 of the Companies Act 2013 and the rules framed there under. Therefore reporting underclause (v) of the Companies (Auditor's Report) Order 2016 does not arise.
vi. According to the information and explanations given to us the Central Governmenthas not prescribed maintenance of cost records under Section 148(1) of the Companies Act2013
vii. (a) According to the information and explanations given to us and as per ourverification of the records of the Company in our opinion the company is generallyregular in depositing undisputed statutory dues including Income Tax Service TaxEmployees Provident Fund Employees State Insurance Customs Duty Excise Duty and otherstatutory dues applicable to it and there are no statutory dues outstanding for a periodof more than six months from the date they become payable as on the last day of thefinancial year.
(b) According to the information and explanations given to us and as per records of theCompany the following are the particulars of dues on account of Employees Provident FundIncome Tax and Entry Tax which have not been deposited/partially deposited under proteston account of dispute before the forum mentioned there against.
|Name of the Statute ||Nature of Dues & Related Period ||Amount of Demand (Rs. In Thousands) ||Amount Deposited under Dispute (Rs. In Thousands) ||Forum where dispute is pending |
|Income Tax Act 1961 ||Income Tax for the AY 2014-15 ||549 || ||Commissioner of Income Tax (Appeals) |
|Employees Provident Fund ||FY 2006-07 and 2007-08 ||10716 ||8100 ||EPF Tribunal New Delhi |
|Employees Provident Fund Damages ||FY 2001 to FY 2013 ||4002 ||1002 ||EPF Appellate Tribunal Bangalore |
viii. According to information and explanations given to us the company has notdefaulted in repayment of principal and interest dues to the bank or any financialinstitutions.
ix. The Company has not raised moneys by way of Initial Public Offer or Further PublicOffer. In our opinion and according to information and explanations given to us termloans have been applied for the purposes for which they were raised.
x. According to the information and explanations given to us no fraud on or by thecompany has been noticed or reported during the course of our audit.
xi. According to the information and explanations given to us no managerialremuneration has been paid to the Directors. However sitting fees has been paid tocertain Directors in accordance with the requisite approvals mandated by the provisions ofSection 197(5) of Companies Act 2013 read with the Rules made thereunder.
xii. In our opinion the Company is not a Nidhi Company. Hence reporting under Clause(xii) of the Companies(Auditor's Report) Order 2016 does not arise.
xiii. According to the information and explanations given to us and in our opinion thetransactions with related parties are in compliance with Section 177 and 188 of theCompanies Act 2013 and the details have been disclosed in the Financial Statements etc.as required by the applicable Accounting Standard.
xiv. According to the information and explanation given to us the Company has not madeany preferential allotment or private placement of shares. Hence reporting under Clause(xiv) of the Companies(Auditor's Report) Order 2016 does not arise.
xv. According to the information and explanations given to us the Company has notentered into any non-cash transactions with the directors or persons connected with them.Hence reporting under Clause (xv) of the Companies (Auditor's Report) Order 2016 doesnot arise.
xvi. According to the information and explanation given to us and in our opinion theCompany is not required to be registered under Section 45-IA of the Reserve Bank of IndiaAct 1934.
for RANGARAJU AND ASSOCIATES CHARTERED ACCOUNTANTS
(KRISHNAN RANGARAftft/ PARTNER )
Membership No. 018^91 Firm No. 006912S
Place : Bangalore
Date : 07.06.2017
ANNEXURE - B TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONEFINANCIAL STATEMENTS OF KHODAY INDIA LIMITED
Report on the Internal Financial Controls under Section 143 (3) (i) of the Companies
Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of KhodayIndia Limited ("the Company") as of March 31 2017 in conjunction with our auditof the standalone financial statements of the Company for the year ended on that 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. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013.
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 issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness.
Our audit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgement including the assessment of the risks of materialmisstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
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 company's internal financial control over financialreporting includes those policies and procedures that
(1) Pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion 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 March 31 2017 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 RANGARAJU AND ASSOCIATES CHARTERED ACCOUNTANTS
(KRISHNAN RANGARAJA PARTNER)
Membership No. 0184S& Firm No. 006912S
Place: Bangalore Date: 07.06.2017