The Members of
Jetking Infotrain Limited
1. We have audited the accompanying standalone financial statements of JetkingInfotrain Limited (the Company) which comprise the balance sheet as at March31 2020 and the statement of profit and loss (including other comprehensive income) thestatement of changes in equity and the statement of cash flows for the year then endedand notes to the financial statements including a summary of significant accountingpolicies and other explanatory information (hereinafter referred to as standalonefinancial statements).
2. 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 Companies Act 2013 (the Act) in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended (Ind AS) and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at March 31 2020 and loss (including othercomprehensive income) changes in equity and its cash flows for the year ended on thatdate.
Basis for Opinion
3. We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibilities for the Audit of the Standalone Financial Statements section of ourreport. We are independent of the Company in accordance with the Code of Ethics issued bythe Institute of Chartered Accountants of India (ICAI) together with the ethicalrequirements that are relevant to our audit of the standalone financial statements underthe provisions of the Act and the Rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the ICAI's Code ofEthics. We believe that the audit evidence obtained by us is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.
Emphasis of Matter
4. Attention is invited to note 40 of the standalone financial statements regarding theuncertainties arising out of the outbreak of COVID-19 pandemic and the impact assessmentthereof made by the management on its business and financial statements including theestimates for lifetime expected credit loss for trade receivables impairment ofinventory intangibles and fixed assets as at March 31 2020 and solvency of the Companyfor atleast one year from March 31 2020. This assessment including the impact and/oroutcome of the COVID 19 pandemic is made by the management and is highly dependent on thecircumstances as they evolve in the subsequent periods. Our opinion is not modified inrespect of this matter.
Key Audit Matters
5. Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide aseparate opinion on these matters.
Description of Key Audit Matter
|Key audit matter ||How the matter was addressed in our audit |
|Revenue Recognition || |
|Ind AS 115 on Revenue from Contracts with Customers provides a comprehensive framework for determining whether how much and when revenue is recognised. This involves certain key judgments relating to identi cation of distinct performance obligations if any determination of transaction price of identi ed performance obligations the appropriateness of the basis used to measure revenue recognised over a period or at a point in time. Additionally Ind AS 115 requires comprehensive disclosures. ||We have performed walkthrough and understood the process and tested key controls associated with revenue recognition and accounts receivables. |
|The application to Ind AS is complex and more particularly when an entity derives its revenue from providing services. The Company provides services to its customers under varied arrangements which are to be evaluated for recognition of revenue. Also establishing an appropriate year-end position requires significant judgement and estimation by management. Considering all these aspects revenue recognition is considered to be a key audit matter. ||We made enquiries of management and analyzed contracts to evaluate whether revenue was recognized in accordance with their terms. |
|[Refer note no. 2.14 and 18 to the standalone financial statements] ||We have: |
| ||? assessed the Company's accounting policies relating to revenue recognition |
| ||? checked revenue recognition by reading the supporting documents including inspection of contracts on test check basis |
| ||? reviewed pre and post year end sample of revenue recognized and agreed with the supporting documents |
| ||? circulated the confirmations for outstanding debtors on sample basis at year end and performed alternate procedures for the confirmations not received |
| ||tested the journal ? entries impacting revenue using data extracted from the accounting system as well as other adjustments made in the preparation of the standalone Ind AS financial statements |
| ||? performed detailed analysis of revenue at a disaggregated level i.e. own-center revenue franchisee-wise revenue dropouts etc. and |
| ||? standalone Ind AS financial statement disclosures in this regard |
|Deferred tax asset/ liabilities || |
|The Company has recognized deferred tax assets on various components including carry forward business losses statutory payments fair valuation of investments provisions etc. in lieu of timing difference between accounting and allowability of the same under income tax laws. ||Our audit procedures included among others the following: |
|[Refer note no. 2.20 and 14 to the standalone financial statements] ||? Reviewed the components of deferred tax assets and liabilities. |
| ||? Performed audit procedures to check appropriateness of the amount of deferred tax assets recognized on various components including carry forward business losses statutory payments fair valuation of investments provisions etc. |
| ||? Ensured that recognition of deferred tax asset on carry forward business losses is restricted to the extent of outstanding deferred tax liabilities as at March 31 2020. |
|Impairment of Investments || |
|Annually the management assesses the existence of impairment indicators for each non-current investment and in case of occurrence such investments are subjected to an impairment test. As at the reporting date the Company has non-current investments in certain real estate and private equity funds of which the management has identified impairment indicators such as diminution in the value of net asset of the underlying funds and capital market conditions. ||Our audit procedures included among others the following: |
|Accordingly these investments have been tested for impairment as at year end in accordance with Indian Accounting Standard (Ind AS') 36 Impairment of Assets. Based on the management's assessment an impairment provision of Rs. 51.57 lakhs has been recorded in the books as at the year-end. ||? Assessed the Company's accounting policies relating to impairment of non-current investments |
|[Refer note no. 2.10 and 6(a) to the standalone financial statements] ||? Reviewed the valuation reports net asset value of underlying funds made available to us by the management of the Company |
| ||? We made enquiries of management ? Evaluated the standalone financial statement disclosures in this regard. |
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
5. The Company's Board of Directors is responsible for the other information. The otherinformation comprises the information included in the Annual report but does not includethe standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurance or conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained in the audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is a material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.
Management's Responsibility for the Standalone Financial Statements
6. 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 standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the standalone financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.
7. In preparing the standalone financial statements Management and Board of Directorsare responsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
Auditor's Responsibility for the Audit of the Standalone Financial Statements
8. Our objectives are to obtain reasonable assurance about whether the standalonefinancial 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 standalone financial statements.
9. 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 standalone 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 control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act 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 thereasonableness of accounting estimate and related disclosures made by the 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern. ? Evaluate the overall presentation structure and contentof the standalone financial statements including the disclosures and whether thestandalone financial statements represent the underlying transactions and events in amanner that achieves fair presentation.
10. Materiality is the magnitude of misstatements in the standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeable user of the standalone financial statements may bein uenced. We consider quantitative materiality and qualitative factors in
(i) planning the scope of our audit work and in evaluating the results of our work; and
(ii) to evaluate the effect of any identified misstatements in the standalone financialstatements.
11. We communicate with those charged with governance regarding among other mattersthe planned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
12. We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence 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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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.
Due to the COVID-19 pandemic and the ensuing lockdown and other restrictions imposed bythe Government and local administration the audit procedures were performed based on aremote access and to the extent possible of the available/ feasible records made availableby the management through digital medium. Our opinion is not modified in respect of thismatter.
Report on Other Legal and Regulatory Requirements
13. As required by the Companies (Auditor's Report) Order 2016 (the Order)issued by the Central Government in terms of Section 143(11) of the Act we give inAnnexure A a statement on the matters specified in paragraphs 3 and 4 of theOrder.
14. As required by Section 143(3) of the Act based on our audit 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 statement of changes in equity and the statement of cash flows dealt with by thisreport agree with the relevant books of account.
d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act read with rule 7 of the Companies (Accounts) Rules 2014.
e) On the basis of the written re presentations received from the directors except forone director as on March 31 2020 taken on record by the Board of Directors none of thedirectors is disqualified as on March 31 2020 from being appointed as a director in termsof Section 164(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.
g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended: Based on thelegal counsel opinion obtained by the management in our opinion and to the best of ourinformation and according to the explanations given to us the remuneration paid by theCompany to its directors during the year is in accordance with the provisions of section197 of the Act.
h) 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 has disclosed the impact of pending litigations on its financialposition in its standalone financial statements
ii. The Company 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 tothe Investor Education and Protection Fund by the Company.
Annexure A to the Independent Auditor's Report
(Referred to in paragraph 13 under Report on Other Legal and RegulatoryRequirements' section of our report of even date)
i. In respect of its fixed assets:
a) To the best of our knowledge and according to the information and explanations givento us the Company has maintained proper records of fixed assets showing full particularsincluding quantitative details and location of fixed assets.
b) The Company has a program of verification to cover all the items of fixed assets ina phased manner which in our opinion is reasonable having regards to the size of theCompany and the nature of its assets. Pursuant to the program certain fixed assets weredue for physical verification by the management during the year. However due to the Covid19 pandemic the management was not able to verify such assets physically and hence wecannot ascertain if there were any material discrepancies that could have been noticed onsuch verification and required any adjustments to the standalone financial statements.
c) To the best of our knowledge and according to the information and explanations givento us and on the basis of our examination of the records of the Company the title deedsof immovable properties are held in the name of the Company.
ii. The management has conducted the physical verification of inventory at reasonableintervals during the year and no material discrepancies were noticed on such physicalverification.
iii. To the best of our knowledge and according to the information and explanationsgiven to us the Company has not granted any loans secured or unsecured to companiesrms or other parties covered in the register maintained under Section 189 of the Act.Accordingly the provisions of clause 3 (iii) of the Order is not applicable to theCompany.
iv. To the best of our knowledge and according to the information and explanationsgiven to us the Company has not granted any loans made investments or providedguarantees which are covered under section 185 or 186 of the Companies Act 2013 andhence reporting under clause 3 (iv) of the Order is not applicable to the Company.
v. To the best of our knowledge and according to the information and explanations givento us the Company has not accepted any deposit from the public during the period interms of the provisions of Sections 73 and 76 or any other relevant provisions of the Act.Accordingly the provisions of clause 3 (v) of the Oder are not applicable to the Company.
vi. To the best of our knowledge and according to the information and explanationsgiven to us the Central Government has not prescribed the maintenance of cost recordsunder Section 148(1) of the Act for any of the services rendered by the Company.
vii. To the best of our knowledge according to the information and explanations givento us and on the basis of examination of the records in respect of statutory dues:
(a) the Company has been generally regular in depositing undisputed statutory duesincluding provident fund employees' state insurance income-tax goods and service taxcess and other material statutory dues applicable to it with the appropriate authorities.As explained to us no undisputed amounts payable in respect of the aforesaid dues wereoutstanding as at March 31 2020 for the period of more than six months from the date ofthey became payable.
(b) There are no dues on account of income tax sales tax service tax duty ofcustoms duty of excise value added tax and cess which have not been deposited with theappropriate authorities on account of any dispute except the following dues of service taxand income tax:
|Name of the Statue ||Nature of dues ||Amount (in lakhs) ||Period to which the amount relates ||Forum where the dispute is pending |
|Finance Act 1994 ||Service Tax (Sale of courseware) ||300.59 ||April 16 2005 to June 30 2010 ||CESTAT Delhi |
|Finance Act 1994 ||Service Tax (Sale of courseware) ||67.46 ||FY 2012-13 FY 2013- 14 and 2014-15 ||Commissioner of Service Tax (Appeals) Mumbai |
|Income Tax Act 1961 ||Income Tax ||1.41 ||AY 2013-14 ||Commissioner of Income Tax |
| ||Total ||369.46 || || |
*excluding penalty and net of amount paid under protest.
viii. To the best of our knowledge and according to the information and explanationsgiven to us the Company has not taken any loans or borrowings from financialinstitutions banks and government or has not issued any debenture. Hence reporting underclause 3(viii) of the Order is not applicable to the Company.
ix. To the best of our knowledge and according to the information and explanationsgiven to us the Company has not raised any money by way of initial public offer orfurther public offer (including debt instruments) or term loans and hence reporting underclause 3 (ix) of the Order is not applicable to the Company.
x. To the best of our knowledge and according to the information and explanations givento us no fraud by the Company and no material fraud on the Company by its of cers oremployees has been noticed or reported during the year.
xi. To the best of our knowledge according to the information and explanations givento us and based on our examination of the records of the Company the Company has paid/provided for managerial remuneration in accordance with the requisite approvals mandatedby the provisions of section 197 read with Schedule V to the Companies Act 2013.
xii. To the best of our knowledge and according to the information and explanationsgiven to us the Company is not a Nidhi Company and hence reporting under clause 3(xii) ofthe Order is not applicable to the Company.
xiii. According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with Sections 177 and 188 of the Act where applicable and details of suchtransaction have been disclosed in the standalone financial statements as required by theapplicable accounting standards.
ix. According to the information and explanation given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year.
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 with him 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 ReserveBank of India Act 1934.
Annexure B to the Independent Auditor's Report
(Referred to in paragraph 14(f) under Report on Other Legal and RegulatoryRequirements' section of our report to the members of Jetking Infotrain 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 JetkingInfotrain Limited (the Company) as of March 31 2020 in conjunction with ouraudit of the standalone financial statements of the Company for the year ended on thatdate.
Management's responsibility for Internal Financial Controls
The Board of Directors of the Company 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 (the Guidance Note) issued by the Institute of Chartered Accountantsof India. 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 respective company'spolicies the safeguarding of its assets the prevention and detection of frauds anderrors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Act.
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 Reportingand the Standards on Auditing both issued by the ICAI and deemed to be prescribed underSection 143 (10) of the Act to the extent applicable to an audit of internal financialcontrols. 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 auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness.
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 thatthe audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion on the internal financial controls system over financial reporting withreference to these standalone financial statements.
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.
In our opinion the Company has in all material respects adequate internal financialcontrols with reference to standalone financial statements and such internal financialcontrols were operating effectively as at 31 March 2020 based on the internal financialcontrols with reference to standalone financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India.