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City Online Services Ltd.

BSE: 538674 Sector: Others
NSE: N.A. ISIN Code: INE158C01014
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VOLUME 150
52-Week high 3.05
52-Week low 1.87
P/E
Mkt Cap.(Rs cr) 1
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

City Online Services Ltd. (CITYONLINESER) - Auditors Report

Company auditors report

TO THE MEMBERS OF CITY ONLINE SERVICES LIMITED

Report on the Audit of the Standalone Financial Statements

Qualified Opinion

We have audited the Standalone financial statements of City Online Services Limited("the Company") which comprise the balance sheet as at 31st March 2020 and thestatement of Profit and Loss statement of changes in equity and the statement of cashflows for the year then ended and notes to the financial statements including a summaryof the significant accounting policies and other explanatory information.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the "Basis forQualified Opinion" section of our report the aforesaid financial statements give theinformation required by the Companies Act 2013 in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at 31st March 2020 and its loss changes in equityand its cash flows for the year ended on that date.

Basis for Qualified Opinion

The Company's "Loans & Advances" are carried in the Balance Sheet at Rs.82.68 Lakhs. A party having a loan outstanding of 48.36 Lakhs carries negative net worthand recovery of the same is unascertainable. However no provision has been made in thebooks of accounts. Had the company created a provision of Rs.48.36 Lakhs the results ofthe operations of the company for the current financial year would have resulted in a lossof Rs.254.91 Lakhs and the amount under "Loans & Advances" under currentassets would have been reduced by Rs.48.36 Lakhs.

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia ("ICAI") together with ethical requirements that are relevant to our auditof the financial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our qualified opinion.

Other Information:

• The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Director's Report ManagementDiscussion & Analysis but does not include the standalone financial statements andour auditor's report thereon.

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

• In connection with our audit of the standalone financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained during the course of our audit or otherwise appears to be materiallymisstated.

• If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in this regard.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Inaddition to the matter described in the Basis for Qualified Opinion We have determinedthat there are no key audit matters to communicate in our report.

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 preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance changes in equity and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Indian Accounting Standards("IND AS") specified under section 133of the Act. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding 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 that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the company or to cease operations or has no realisticalternative but to do so.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal financial controls relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theCompany has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Emphasis of Matter

We draw attention to the following matters

a. Balances shown under "Trade receivables" & "Trade payables"represents Rs.313.68 Lakhs & Rs. 340.80 Lakhs respectively. The balance confirmationis not received and the reconciliation could not be performed. The impact that may resulton reconciliation cannot be ascertained if any.

b. The carrying value of the Inventory is Rs.110.86 Lakhs Management is ascertainingthe utility of the available inventory in order to upgrade the current technology by whichthe company may derive future economic benefits. After completing the aforementionedexercise management will reclassify the assets according to its usage.

Our Opinion is not modified in respect of all above matters.

Other Matters:

The Comparative financial information of the company for the year ended March 31 2019prepared in accordance with Ind AS included in this statement have been audited by thepredecessor auditor. The report of the predecessor auditor on this comparative financialinformation dated May 30 2019 expressed an unmodified opinion. Our opinion on thestatement is not modified in respect of these matters.

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 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 it appears from our examination of those books;

(c) The Balance Sheet the Statement of Profit and Loss (including other comprehensiveincome) and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account;

(d) In our opinion the aforesaid standalone financial statements comply with the INDAS specified under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended.

(e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164 (2) of the Act;

(f) With respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate Report in "Annexure B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the company's internal financial controls overfinancial reporting.

(g) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

(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 contractsfor which there were any material foreseeable losses;

(iii) There has been no delay in transferring amounts required to be transferred tothe Investor 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 subsection (11) of section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable

For Laxminiwas & Co.

Chartered Accountants

Firm's Registration Number: 011168S

Guha Roy Ashish Kumar

Partner

Membership Number: 018659

UDIN : 20018659AAAAAM7202

Hyderabad

31st July 2020

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under "Report on Other Legal and RegulatoryRequirements" section of our report to the Members of City Online Services Limited ofeven date)

(i). In respect of the company's fixed assets:

a. The Company is maintaining proper records showing full particulars includingquantitative details and situation of fixed assets.

b. All the assets are physically verified by the Management during the year.

No material discrepancies have been noticed on such verification.

c. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the company has no immovable propertyaccordingly the provisions of clause 3 (i) (c) of the Order are not applicable

(ii). In respect of its inventories:

a. The inventories have been physically verified during the year by the management. Inour opinion the frequency of verification is reasonable.

b. In our opinion and according to the information and explanations given to us theprocedures of physical verification of inventories followed by the management arereasonable and adequate in relation to the size of the Company and the nature of itsbusiness.

c. The Company has maintained proper records of inventories.

Management is ascertaining the utility of the available inventory in order to upgradethe current technology by which the company may derive future economic benefits. Aftercompleting the aforementioned exercise management will reclassify the assets according toits usage

(iii). According to the information and explanations given to us the Company hasgranted unsecured loans to companies covered in the register maintained under Section 189of the Companies Act 2013 in respect of which

a. The terms and conditions of the grant of such loans is in our opinion prejudicialto the Company's interest as no interest charged against such loan.

b. The schedule of repayment of principal and payment of interest has not beenstipulated c. The total amount remaining outstanding as at the year-end is Rs.82.68

Lakhs

(iv). In our opinion and according to the information and explanations given to us theCompany has not complied with the provisions of section 185 and 186 of the Act withrespect to the loans given to the companies as mentioned in point (iii) above

(v). The company has not accepted any deposits during the year and does not have anyunclaimed deposits as at 31st March 2020 and therefore the provisions of the clause 3 (v)of the order are not applicable to the company.

(vi). The maintenance of cost records has not been specified by the Central

Government under section 148(1) of the Companies Act 2013 for the business activitiescarried out by the Company. Thus reporting under clause 3(vi) of the order is notapplicable to the Company.

(vii).According to the information and explanations given to us in respect ofstatutory dues:

a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income tax Customs duty Goods andService Tax Cess and other material statutory dues applicable to it with the appropriateauthorities

b) There were undisputed amounts payable in respect of Income Tax Service taxProfessional Tax dues in arrears as at 31st March 2020 for a period of more than sixmonths from the date they became payable. Details are given below:

Sl. No. Pending from the period Name of the Statute Details of Section Amount in Rupees
1 2016-17 Income Tax Act 1961 TDS U/S 195 369392
2 2016-17 Service Tax KKC Tax Payable-Hyd 179740
3 2016-17 Service Tax SBC Tax Payable-Hyd 938328
4 2016-17 Service Tax Service Tax Payable-Hyderabad 2389210
5 2016-17 Professional Tax Professional Tax Payable (Bangaloru) 38900
Total 4015601

(viii). According to the information and explanation given to us the company has notdefaulted in repayment of dues to bank and financial institutions as at balance sheetdate.

(ix). The Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments) or term loans and hence reporting under clause 3(ix) of the Order is not applicable the company

(x). To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company or no fraud on the Company by its officers oremployees has been noticed or reported during the year.

(xi). In our opinion and according to the information and explanations given to us theCompany has paid/provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the Act.

(xii). The Company is not a Nidhi company and hence reporting under clause 3(xii) ofthe Order is not applicable to the Company.

(xiii). In our opinion and according to the information and explanations given to usthe Company is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(xiv). During the year the company has not made any preferential allotment or privateplacement of shares or fully or partly paid convertible debentures and hence reportingunder clause 3 (xiv) of the order is not applicable to the company.

(xv). In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsDirectors or persons connected to its directors and hence provisions of section 192 of theCompanies Act 2013 are not applicable to the Company

(xvi). The Company is not required to be registered under section 45-IA of the

Reserve Bank of India Act 1934.

For Laxminiwas & Co.

Chartered Accountants

Firm's Registration Number: 011168S

Guha Roy Ashish Kumar

Partner

Membership Number: 018659

UDIN : 20018659AAAAAM7202

Hyderabad 31st July 2020

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 (f) under "Report on other Legal and RegulatoryRequirements section of our report to the members of City Online Services Limited of evendate).

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act").

We have audited the internal financial controls over financial reporting of City OnlineServices Limited ("the Company") as of 31st March 2020 in conjunction with ouraudit of the 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 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 (‘ICAI').

• These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding 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 Companies Act 2013.

Auditor's Responsibility

• 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 Institute of Chartered accountantsof India. 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 theadequacy 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 judgement including the assessment of therisks of material misstatement 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 internal financial controls system overfinancial reporting of the Company.

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 authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized 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.

Opinion

In our opinion according to the information and explanations given to us the Companyhas maintained in all material respects an adequate internal financial controls overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at 31st March 2020 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.

For Laxminiwas & Co.

Chartered Accountants

Firm's Registration Number: 011168S

Guha Roy Ashish Kumar

Partner

Membership Number: 018659

UDIN : 20018659AAAAAM7202

Hyderabad 31st July 2020

INDEPENDENT AUDITOR'S REPORT

TO THE MEMBERS OF CITY ONLINE SERVICES LIMITED

Report on the Audit of the Consolidated Financial Statements.

Opinion

We have audited the accompanying consolidated financial statements of City OnlineServices Limited (hereinafter referred to as the "Holding Company") and itssubsidiaries (Holding Company and its subsidiaries together referred to as "theGroup") which comprise the consolidated balance sheet as at March 31 2020 theconsolidated statement of Profit and Loss the consolidated statement of changes inequity the consolidated cash flows statement for the year then ended and notes to theconsolidated financial statements including a summary of significant accounting policies(hereinafter referred to as "the consolidated financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid consolidated financial statements give the information requiredby the Companies Act 2013 in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the consolidatedstate of affairs of the company as at March 31 2020 of consolidated loss includingother comprehensive income consolidated changes in equity and its consolidated cash flowsfor the year then ended.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theConsolidated Financial Statements section of our report. We are independent of the Groupwith the Code of Ethics issued by the Institute of Chartered Accountants of India("ICAI") together with ethical requirements that are relevant to our audit ofthe financial statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

We have determined that there are no Key Audit matters to communicate in our report.

Management's Responsibility for the Consolidated Financial Statements.

The Holding Company's Board of Directors of is responsible for the matters stated insection 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation and presentation of these consolidated financial statements that give a trueand fair view of the consolidated financial position consolidated financial performanceand consolidated cash flows of the Group in accordance with the accounting principlesgenerally accepted in India including the Indian Accounting Standards ("INDAS") specified under section 133 of the Act. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding the assets of the Company and for preventing and detecting frauds andother irregularities; 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 financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error which have beenused for the purpose of preparation of the consolidated financial statements by theDirectors of the Holding Company as aforesaid.

In preparing the consolidated financial statements the management of the group areresponsible for assessing the ability of the Group to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the s management either intends to liquidate the Group or tocease operations or has no realistic alternative but to do so.

Those Board of Directors are responsible for overseeing the Company's financialreporting process of the Group.

Auditor's Responsibilities for the Audit of the Consolidated Financial Statements.

Our objectives are to obtain reasonable assurance about whether the consolidatedfinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these consolidated financial statements.

As part of an audit in accordance with SAs we exercise professional judgement andmaintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the ConsolidatedFinancial Statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether theGroup has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Group'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe Consolidated Financial Statements or if such disclosures are inadequate to modifyour opinion. Our conclusions are based on the audit evidence obtained up to the date ofour auditor's report. However future events or conditions may cause the Group to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the ConsolidatedFinancial Statements including the disclosures and whether the Consolidated FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation.

We communicate with those charged with governance of the Holding Company and such otherentities included in the consolidated financial statements of which we are the independentauditors regarding among other matters the planned scope and timing of the audit andsignificant audit findings including any significant deficiencies in internal controlthat we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the consolidated financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.

Emphasis of Matter

We draw attention to the following matters

(a) Balances shown under "Trade receivables" & "Trade payables"represents Rs.345.61 Lakhs & Rs. 346.20 Lakhs respectively. The balance confirmationis not received and the reconciliation could not be performed. The impact that may resulton reconciliation cannot be ascertained if any.

(b) The carrying value of the Inventory is Rs.110.86 Lakhs Management is ascertainingthe utility of the available inventory in order to upgrade the current technology by whichthe company may derive future economic benefits. After completing the aforementionedexercise management will reclassify the assets according to its usage.

Our Opinion is not modified in respect of all above matters.

Other Matters:

• The Comparative financial information of the company for the year ended March31 2019 prepared in accordance with Ind AS included in this statement have been auditedby the predecessor auditor. The report of the predecessor auditor on this comparativefinancial information dated May 30 2019 expressed an unmodified opinion. Our opinion onthe statement is not modified in respect of these matters.

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 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 thegroup so far as it appears from our examination of those books;

(c) The Consolidated Balance Sheet the Consolidated Statement of Profit and Lossincluding the Statement of Other Comprehensive Income the Consolidated Cash FlowStatement and Consolidated Statement of Changes in Equity dealt with by this Report are inagreement with the books of account maintained;

(d) In our opinion the aforesaid Consolidated Financial Statements comply with the INDAS specified under Section 133 of the Act read with Companies (Indian AccountingStandards) Rules 2015 as amended;

(e) On the basis of the written representations received from the directors of theHolding Company as on March 31 2020 taken on record by the Board of Directors of theHolding Company and the reports of the statutory auditors of its subsidiary companiesnone of the directors of the Group companies incorporated in India 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 controls over financialreporting of the Group and the operating effectiveness of such controls refer to ourseparate Report in "Annexure A" to this report;

(g) 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 opinionand to the best of our information and according to the explanations given to us:

(i) The Group does not have any pending litigations which would impact its consolidatedfinancial position of the Group.

(ii) The Group did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses;

(iii) There has been no delay in transferring amounts required to be transferred to theInvestor Education and Protection Fund by the Holding Company and its subsidiarycompanies incorporated in India

For Laxminiwas & Co.
Chartered Accountants
Firm's Registration Number: 011168S
Guha Roy Ashish Kumar
Partner
Membership Number: 018659
UDIN : 20018659AAAAAN8020

Hyderabad 31st July 2020

ANNEXURE – "A" TO THE CONSOLIDATED AUDITOR'S REPORT

(Referred to in paragraph 1(f) under "Report on other Legal and RegulatoryRequirements section of our report to the members of City Online Services Limited of evendate).

Report on the Internal Financial Controls over financial reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act").

We have audited the internal financial controls over financial reporting of City OnlineServices Limited ("the Company") as of 31st March 2020 in conjunction with ouraudit of the 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 (‘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 Companies Act 2013.

Auditor's Responsibility

• 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 standards on auditing to the extent applicable to anaudit of internal financial controls both issued by 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 theadequacy 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 judgement including the assessment of therisks of material misstatement 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 internal financial controls system overfinancial reporting of the Company.

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 authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection ofunauthorized 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.

Opinion

In our opinion according to the information and explanations given to us the Companyhas maintained in all material respects an adequate internal financial controls overfinancial reporting and such internal financial controls over financial reporting wereoperating effectively as at 31st March 2020 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.

For Laxminiwas & Co.

Chartered Accountants

Firm's Registration Number: 011168S

Guha Roy Ashish Kumar

Partner

Membership Number: 018659

UDIN : 20018659AAAAAN8020

Hyderabad 31st July 2020