To the Members of
CKP Leisure Limited
Report on the Audit of the Financial Statements Opinion
We have audited the accompanying financial statements of CKP Leisure Limited("the Company") which comprise the balance sheet as at March 31 2019 thestatement of profit and loss and the statement of cash flows for the year then ended andnotes to the financial statements including a summary of significant accounting policiesand other explanatory information. In our opinion and to the best of our information andaccording to the explanations given to us the financial statements give the informationrequired by the Companies Act 2013 as amended ("the Act") in the manner sorequired and give a true and fair view in conformity with the accounting principlesgenerally accepted in India of the state of affairs of the Company as at March 31 2019;and its profit / (loss) and cash flows for the year ended on that date.
Emphasis of Matter
We draw attention to the fact that the company has sold club "SIRKUS" whichwas a major undertaking of the company on slump sale basis vide agreement dated October31 2018. The company has incurred a loss of Rs. 348.78 lakhs on account of this slumpsale which has been disclosed separately as extraordinary items in statement of profit& loss. The club was a major revenue generating unit of the company. In our opinionadequate disclosure has been made in the notes to accounts to the financial statementsw.r.t. the slump sale. As per the management; the sale of the club neither hampers thecompany's ability to continue as a going concern nor does the management intend toliquidate the company in the near future.
Basis for opinion
We have conducted our audit of the financial statements in accordance with theStandards on Auditing ("SAs") as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Financial Statements' section of our report. We areindependent of the Company in accordance with the Code of Ethics' issued by theInstitute of Chartered Accountants of India together with the ethical requirements thatare relevant to our audit of the financial statements under the provisions of the Act andthe Rules thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the Code of Ethics. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the financial statements.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance and cash flows ofthe Company in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards specified under Section 133 of the Act read with theCompanies (Accounts) Rules 2014.
This responsibility also includes the maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding of the assets of the Company andfor preventing and detecting the 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 control 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 themanagement is responsible for assessing the Company's ability to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the Company orto cease operations or has no realistic alternative but to do so. Those Board ofDirectors are also responsible for overseeing the Company's financial reporting 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 weexercise professional judgment and maintain professional skepticism throughout the audit.We also:
Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal control relevant to the audit in order to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theAct we are also responsible for expressing our opinion on whether the Company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.
Evaluate the appropriateness of accounting policies used and the reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of management's use of the going concern basis ofaccounting 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 financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions and events in a manner that achieves fair presentation. We communicate withthose charged with governance regarding among other matters the planned scope and timingof the audit and significant audit findings including any significant deficiencies ininternal control that we identify during our audit. We also provide those charged withgovernance with a statement that we have complied with relevant ethical requirementsregarding independence and to communicate with them all relationships and other mattersthat may reasonably be thought to bear on our independence and where applicable relatedsafeguards.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors 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 theparagraph 3 and 4 of the order.
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 purpose of our audit; b) in our opinion proper books ofaccount as required by law have been kept by the Company so far as appears from ourexamination of those books. c) the balance sheet the statement of profit and loss and thestatement of cash flows dealt with by this report are in agreement with the books ofaccount. 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 written representations received from thedirectors as on 31 March 2019 taken on record by the Board of Directors none of thedirectors is disqualified as on 31 March 2019 from being appointed as a director interms of Section 164(2) of the Act; f) With respect to the adequacy of the internalfinancial controls over financial reporting of the company and the operating effectivenessof such controls refer to our separate report in "Annexure B". g) In ouropinion the managerial remuneration for the year ended 31st March 2019 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofSection 197 read with Schedule V of the Act; h) with respect to the other matters to beincluded in Auditors Report in accordance with Rule 11 of the Companies (Audit andAuditors) Rules 2014 in our opinion and to the best of our information and according toexplanations given to us: i. The Company does not have any pending litigations which wouldimpact its financial position; ii. The Company did not have any long term contractsincluding derivative contracts for which there were any material foreseeable losses; iii.There were no amounts which were required to be transferred to the Investor Education andProtection Fund by the Company.
| ||For R T Jain & Co. LLP |
| ||Chartered Accountants |
| ||FRN: 103961W / W100182 |
| ||(CA Bankim Jain) |
| ||Partner |
|Mumbai July 2 2019 ||Mem No.: 139447 |
Annexure A to the Independent Auditors' Report
Referred to in paragraph 1 under the heading "Report on Other Legal and RegulatoryRequirements" of our report of even date on the accounts of the company for the yearended 31st March 2019
On the basis of such checks as we considered appropriate and according to theinformation and explanation given to us during the course of our audit we report that:
i. (a) The company has maintained proper records showing full particulars includingquantitative details and situation of its fixed assets.
(b) As explained to us fixed assets have been physically verified by the management ina phased manner. To the extent of physical verification details have been compared withthe book records discrepancies noticed were not material and have been properly dealtwith in the books of accounts. The company does not own any fixed asset at year end as allthe fixed assets have been transferred through slump sales.
(c) Based on our audit procedures and the information and explanation received by uswe report that the company does not own any immovable properties held as fixed assets.Thus no opinion on the validity of the title of the company on immovable properties isgiven.
ii. (a) As explained to us inventories have been physically verified during the yearby the management at reasonable intervals.
(b) In our opinion and on the basis of our examination of the records no materialdiscrepancy was noticed on physical verification of stocks by the management as comparedto book records.
iii. According to the information and explanations given to us and on the basis of ourexamination of the books of account the Company has given security deposit of Rs.2690000/- to associate concern covered in the register maintained under Section 189 ofthe Companies Act 2013. iv. The company has not given any loans made any investments orprovided any guarantee and security under section 185 and section 186 of Companies Act2013. v. In our opinion the company has not accepted any deposits within the meaning ofRule 2 (b) of Companies (Acceptances of Deposits) Rules 2014. vi. According to theinformation and explanations provided by the management no cost records have beenprescribed under section 148(1) of the Companies Act 2013 in respect of products of theCompany.
(a) According to the records of the company undisputed statutory dues includingProvident Fund Investor Education and Protection Fund Employees' State InsuranceIncome-tax Sales-tax Service Tax Goods and Service Tax Custom Duty Excise Duty cessto the extent applicable and any other statutory dues have generally been regularlydeposited with the appropriate authorities. According to the information and explanationsgiven to us there are following outstanding statutory dues as on 31st of March2019 for a period of more than six months from the date they became payable.
|Particulars ||Amount |
|VAT ||7751501 |
|Service Tax ||261514 |
|TDS ||61764 |
|ESIC ||34525 |
|Income Tax ||3681143 |
|Total ||12063614 |
Note : The Company has transferred all the above mentioned liabilities vide Slump SaleAgreement dated October 31 2018. In the absence of information regarding payment of theseliabilities by the buyer as on March 31 2019 liabilities which were outstanding for morethan six months as on the date of slump have been disclosed here. (b) According to theinformation and explanations given to us there is no amounts payable in respect of incometax service tax goods and service tax sales tax customs duty and excise duty whichhave not been deposited on account of any disputes. vii. Based on our audit procedures andthe information and explanations given by the management we are of the opinion thatthere are no dues to any financial institution bank or debenture holders. viii. Based onrecords of the company the company has neither raised any moneys by way of Initial PublicOffer or Further Public Offer or term loan during the year. ix. Based on the auditprocedures performed and the information and explanations given to us we report that nofraud on or by the Company has been noticed or reported during the year. x. According toinformation and explanations given to us in our opinion the company has paid managerialremuneration in accordance with the requisite approvals mandated by the provisions ofSection 197 read with Schedule V to the Companies Act 2013. xi. The Company is not anidhi company. Therefore the provision of this clause of the Companies (Auditor's Report)Order 2016 is not applicable to the Company. xii. Based on our audit procedures and onthe information given by the management the company has complied with the sections 177and 188 of the Companies Act 2013 for all the transactions with the related parties andthe details of such transactions have been properly disclosed in the financial statementsas required by the applicable accounting standards. xiii. The Company has not made anypreferential allotment of shares during the year to parties covered in register maintainedunder section 189 of the Companies Act 2013. xiv. The company has not entered into anynon-cash transactions with directors of the company or its subsidiary or persons connectedwith them. xv. The Company is not required to be registered under Section 45-IA of ReserveBank of India Act 1934.
| ||For R T Jain & Co LLP |
| ||Chartered Accountants |
| ||FRN : 103961W / W100182 |
| ||(CA Bankim Jain) |
| ||Partner |
|Mumbai July 2 2019 ||Mem No. : 139447 |
Annexure - B to the Independent Auditors' Report
Referred to in paragraph 2(f) under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date on the accounts of the companyfor the year ended 31st March 2019
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of CKPLeisure Limited ("the Company") as of March 31 2019 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'). 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 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 andprescribed under section 143(10) of the Companies Act 2013 to the extent applicable toan audit of internal financial controls both applicable to an audit of Internal FinancialControls and both issued by the Institute of Chartered Accountants of India. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols operated effectively in all material respects. Our audit involves performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial 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 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.
Inherent Limitations of Internal Financial Controls over Financial ReportingBecause 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. However the Company does not haveappropriate system manuals or predefined standard operation procedure to maintain theefficacy and effectiveness of the internal financial controls throughout the year. Thusthe company does not have formal internal financial controls over financial reportingbased on our verification.
| ||For R T Jain & Co LLP |
| ||Chartered Accountants |
| ||FRN : 103961W/W100182 |
| ||(CA Bankim Jain) |
| ||Partner |
| ||Mem No. : 139447 |
|Mumbai July 2 2019 || |