To the Members of Matrimony.com Limited
Report on the Audit of the Standalone Ind-AS Financial Statements
We have audited the accompanying Standalone Ind-AS financial statements ofMatrimony.com Limited (the Company) which comprise the Balance sheet as atMarch 31 2020 the Statement of Profit and Loss including the statement of OtherComprehensive Income the Cash Flow Statement and the Statement of Changes in Equity forthe year then ended and notes to the Standalone Ind-AS financial statements including asummary of significant accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid Standalone Ind-AS 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 of the state of affairs ofthe Company as at March 31 2020 its profit including other comprehensive income itscash flows and the changes in equity for the year ended on that date.
Basis for Opinion
We conducted our audit of the Standalone Ind-AS financial statements in accordance withthe Standards on Auditing (SAs) as specified under section 143(10) of the Act. Ourresponsibilities under those Standards are further described in the Responsibilities forthe Audit of the Standalone Ind-AS Financial Statements' section of our report. Weare independent of the Company in accordance with the Code of Ethics' issuedby the Institute of Chartered Accountants of India together with the ethical requirementsthat are relevant to our audit of the financial statements under the provisions of the Actand the 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 Standalone Ind-AS financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the Standalone Ind-AS financial statements for the financialyear ended March 31 2020. These matters were addressed in the context of our audit of theStandalone Ind-AS financial statements as a whole and in forming our opinion thereon andwe do not provide a separate opinion on these matters. For each matter below ourdescription of how our audit addressed matter is provided in that context.
We have determined the matters described below to be the key audit matters to becommunicated in our report. We have fulfilled the responsibilities described in theAuditor's responsibilities for the audit of the Standalone Ind-AS financial statementssection of our report including in relation to these matters. Accordingly our auditincluded the performance of procedures designed to respond to our assessment of the risksof material misstatement of the Standalone Ind-AS financial statements. The results of ouraudit procedures including the procedures performed to address the matters below providethe basis for our audit opinion on the accompanying Standalone Ind-AS financialstatements.
|Key audit matters ||How our audit addressed the key audit matter |
|(a) Accuracy and completeness of Matchmaking Revenue(as described in Note 2.2 (h) of the Standalone Ind-AS statements) || |
|Matchmaking services revenues of the Company for the year ended March 31 2020 constitutes a significant percentage of the total revenue and majority of such revenues are generated through online services. The Company has processes and controls many of them automated to ensure that transactions are processed and recorded appropriately. ||As an audit response to address this matter we performed a walkthrough to gain an understanding of the revenue process(includingthecompliancewithrevenuerecognition requirements of Ind-AS 115) to develop an appropriate audit strategy and performed following procedures: |
|Improper configuration of the IT systems or system generated reports could lead to material misstatement of revenues accordingly we identified theaboveasa significant risk in our audit. || Involved IT specialists to test relevant IT general controls application controls and appropriateness of system generated reports; |
|Therefore we considered this risk to be a key audit matter in our audit of the financial statements for the year ended March 31 2020. ||Tested relevant manual and IT dependent controls relating to revenue process including the controls relating to data migration between the operational system and financial accounting system; |
| || Tested the completeness and accuracy of the data extracted from the aforesaid systems and performed re-calculation to verify the appropriateness of revenue procedures) on a test basis; recognized (including cut off |
| || Tests of details for the sample revenue transactions; |
| || Assessed the reconciliation of unearned revenue and collections performed by the management and performed sample tests on the same; |
| || Read the accounting policies for revenue recognition in the financial statements; |
| || Performed analytical procedures over disaggregated data of revenue transactions during the audit period to identify any unusual trends / patterns warranting additional audit procedures; and |
| || Read the disclosures made by the management in the financial statements. |
(b) Impact of adopting Ind-AS 116 - Leases (as described in Note 2.3 (a) of theStandalone Ind-AS financial statements)
|Ind-AS 116 has replaced the current guidance in Ind-AS 17 Leases'. Ind-AS 116 defines a lease as a contract or part of a contract that conveys the right to use an asset (the underlying asset) for a period of time in exchange for consideration. The Company has adopted Ind-AS 116 Leases from 1st April 2019 which introduces a new lease accounting model where lessees are required to recognise a right-of-use (ROU) asset and a lease liability arising from a lease on its balance sheet. ||Our audit procedures in this regard included the following: |
|The Company has applied Ind-AS 116 in the preparation of the accompanying financial statements using the full retrospective approach. Therefore the cumulative effect of adopting Ind-AS 116 is recognised as an adjustment to the opening balance of equity at 1st April 2018 with restatement of comparative information as more fully described in Note 2.3 (a) to the financial statements. || We understood the Company's processes to identify lease contracts from our discussions with management and reading of internally prepared memoranda; |
|Significant judgement is required in the assumptions and estimates made in order to determine the ROU asset and lease liability. The assumptions and estimates include assessment of lease term (including the possibility of exercise of renewal options) and the application of appropriate discount rates during the relevant periods. ||We assessed the design implementation and operating effectiveness of management's key internal controls over accounting of leases as per the requirements of Ind-AS 116; |
|The impact on adoption of Ind-AS 116 is material to the balance sheet of the Company and accordingly is an area of key focus for our audit. || We read a sample of contracts to assess management's identification of leases and their critical contractual terms; |
| || We obtained the Company's calculation of right-of- use assets and lease liabilities. For a sample of leases we tested the inputs used in the quantification to the lease agreements including renewal / cancellation terms discount rate applied and performed re-computations as required; |
| || We verified the completeness of the lease database used by comparing it with the list of operating leases identified under the previously applicable standard and reviewing the residual lease expenses (if any); |
| || We assessed the compliance of the accounting treatment with the requirements of accounting principles generally accepted in India; and |
| || We read the associated disclosures in the accompanying Standalone Ind-AS financial statements. |
Information Other than the Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the other information. The otherinformation comprises information included in the Annual report but does not include theStandalone Ind-AS financial statements and our auditor's report thereon.
Our opinion on the Standalone Ind-AS 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 Ind-AS financial statements ourresponsibility is to read the other information and in doing so consider whether suchother information is materially inconsistent withthefinancial 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.
Responsibilities of Management for the Standalone Ind-AS 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 Standalone Ind-AS financialstatements that give a true and fair view of the financial position financial performanceincluding other comprehensive income cash flows and changes in equity of the Company inaccordance with the accounting principles generally accepted in India including theIndian Accounting Standards (Ind-AS) specified under section 133 of the Act read with theCompanies (Indian Accounting Standards) Rules 2015 as amended. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding of the assets of the Company and for preventing and detectingfrauds and other irregularities; selection and application of appropriate accountingpolicies; making judgments and estimates that are reasonable and prudent; and the designimplementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring accuracy and completeness of the accounting recordsrelevant to the preparation and presentation of the Standalone Ind-AS financial statementsthat give a true and fair view and are free from material misstatement whether due tofraud or error
In preparing the Standalone Ind-AS financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease operations or has norealistic 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 Standalone Ind-AS Financial Statements
Our objectives are to obtain reasonable assurance about whether the Standalone Ind-ASfinancial statements free from material misstatement whether due to fraud or error andto issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken on the basis of these Standalone Ind-AS financialstatements.
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 Ind-ASfinancial 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 misstatement 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 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 with reference to financial statements in place andthe operating effectiveness of such 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 Standalone Ind-ASfinancial statements including the disclosures and whether the Standalone Ind-ASfinancial statements represent the underlying transactions and events in a manner thatachieves 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 weidentify 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 Standalone Ind-AS financialstatements for the financial year ended March 31 2020 and are therefore the key auditmatters. We describe these matters in our auditor's report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 (the Order)issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure 1 a statement on the matters specified inparagraphs 3 and 4 of the Order.
2. 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 the Statement ofOther Comprehensive Income the Cash Flow Statement and Statement of Changes in Equitydealt with by this Report are in agreement with the books of account;
(d) In our opinion the aforesaid Standalone Ind-AS financial statements comply withthe Accounting Standards under Section 133 of the Act read with Companies (IndianAccounting Standards) Rules 2015 as amended;
(e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164 (2) of theAct;
(f) With respect to the adequacy of theinternal financial reporting controlsoverreference to these Standalone Ind-AS financial statements and the operating effectivenessof such controls to our separate Report in Annexure 2 to this report;
(g) In our opinion the managerial remuneration for the year ended March 31 2020 hasbeen paid / provided by the Company to its directors in accordance with the provisions ofSection 197 read with Schedule V to the
(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. Standalone Ind-AS III gationsonitsfinancial .TheCompanyhasdisclosedtheimpactofpending financial statements Refer Note 38 (c) to theStandalone Ind-AS 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 1 REFERRED TO UNDER PARAGRAPH 1 OF THE REPORT ON OTHER LEGAL AND REGULATORYREQUIREMENTS OF THE AUDITORS' REPORT
Re: Matrimony.com Limited (the Company')
(i) (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property plant and equipment.
(b) All fixed assets have not been physicallyverified by the management during the yearbut there is a regular programme of verification which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. such verification.Nomaterialdiscrepancieswere
(c) According to the information and explanations given by the management the titledeeds of immovable properties included in property plant and equipment are held in thename of the Company.
(ii) The Company's business does not involve inventories and accordingly therequirements under paragraph 3(ii) of the Order are not applicable to the Company.
(iii) (a) The Company has granted loans to one subsidiary covered in the registermaintained under Section 189 of the Companies Act 2013. In our opinion and according tothe information and explanations given to us the terms and conditions of the grant ofsuch loans are not prejudicial to the Company's interest.
(b) The Company has granted loans to one subsidiary covered in the register maintainedunder Section 189 of the Companies Act 2013. The schedule of repayment of principal andpayment of interest has been stipulated for the loans granted and the repayment/receiptsare regular.
(c) There are no amounts of loans granted to companies firms or other parties listedin the register maintained under Section 189 of the Companies Act 2013 which are overduefor more than ninety days.
(iv) In our opinion and according to the information and explanations given to usthere are no loans guarantees and securities granted in respect of which provisions ofSection 185 of the Companies Act 2013 are applicable and hence not commented upon. In ouropinion and according to the information and explanations Section 186 in respect ofinvestments made have been complied with by the Company.
(v) The Company has not accepted any deposits from the public.
(vi) To the best of our knowledge and as explained the Central Government has notspecified the maintenance of cost records under Section 148(1) of the Companies Act 2013for the services of the Company.
(vii) (a) Undisputed statutory dues including provident fund employees' stateinsurance income-tax sales-tax service tax duty of custom duty of excise value addedtax goods and service tax cess and other statutory dues have generally been regularlydeposited with the appropriate authorities though there has been slight delays in case ofremittance of professional tax and labour welfare fund dues.
(b) According to the information and explanations given to us no undisputed amountspayable in respect of provident fund employees' state insurance income-tax service taxsales-tax duty of custom duty of excise value added tax goods and service tax cessand other statutory dues were outstanding at the year end for a period of more than sixmonths from the date they became payable.
(c) According to the records of the Company the dues of income-tax sales-tax servicetax duty of custom duty of excise value added tax and cess on account of any disputeare as follows:
|Name of the statute ||Nature of the dues ||Amount* (in lakhs) ||Period to which the amount relates ||Forum where the dispute is pending |
|The Income Tax Act 1961 ||Income Tax ||319.18 ||FY 2007-08 & FY 2008-09 ||High Court |
|The Income Tax Act 1961 ||Income Tax ||387.88 ||FY 2011-12 to FY 2014-15 ||Income Tax Appellate Tribunal |
|The Income Tax Act 1961 ||Income Tax ||77.96 ||FY 2015-16 to FY 2017-18 ||Commissioner of Income tax (Appeals) |
* Does not include interest and penalty
(viii) In our opinionandaccordingtotheinformation and explanations given by themanagement the Company has not defaulted in repayment of dues to bank. The Company didnot have any outstanding dues in respect of a financial institution or debenture holdersor to Government during the year.
(ix) According to the information and explanations given by the management the Companyhas not raised any money by way of initial public offer / further public offer notapplicable to the Company and hence not commented upon.
(x) Based upon the audit procedures performed for the purpose of statements andaccording to the information and explanations given by the management we report that nofraud by the Company or no fraud on the Company by the officers and employees of theCompany has been noticed or reported during the year.
(xi) According to the information and explanations given by the / provided inaccordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Companies Act 2013.
(xii) In our opinion the Company is not a nidhi Company. Therefore the provisions ofclause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the managementtransactions with the related parties compliance with Sections 177 and 188 of CompaniesAct 2013 where applicable and the details have been disclosed in the notes to thefinancial statements as required by the applicable accounting
(xiv) According to the information and explanations given to us and on an overallexamination of the balance sheet the Company has not made any preferential allotment orprivate placement of shares or fully or partly convertible debentures during the yearunder review and hence reporting requirements under clause 3(xiv) are not applicable tothe Company and not commented upon.
(xv) According to the information and explanations given by the management the Companyhas not entered into any non-cash transactions with directors or persons connected withhim as referred to in Section 192 of Companies Act 2013.
(xvi) According to the information and explanations given to us the provisions ofSection 45-IA of the Reserve Bank of India Act 1934 are not applicable to the Company.
ANNEXURE 2 TO THE INDEPENDENT AUDITOR'S REPORT OF EVEN DATE ON THE STANDALONE IND ASFINANCIAL STATEMENTS OF MATRIMONY.COM LIMITED
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 ofMatrimony.com Limited (the Company) as March 31 2020 in conjunction with ouraudit of the Standalone Ind-AS financial statements of the Company for the year ended onthat date.
Management's Responsibility for Internal Financial Controls
The Company's Management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its includingadherence to the Company's policies the safeguarding of its assets the prevention anddetection of frauds and errors the accuracy and completeness of the accounting recordsand the timely preparation of reliable financial as required under the Companies Act2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to theseStandaloneInd-ASfinancialstatements based on our audit. We conducted our audit in accordance with the Guidance Noteon Audit of Internal Financial Controls Over Financial Reporting (the GuidanceNote) and the Standards on Auditing as specified under section 143(10) of theCompanies Act2013 to the extent applicable to an audit of internal financial controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting with reference to these Standalone Ind-AS financialstatements was established and maintained and if such controls operated effectively in allmaterial respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls over financial reporting with reference to theseStandalone Ind-AS financial statements and their operating Our audit of internal financialcontrols over financial reporting included obtaining an understanding of internal controlsover financial reporting with reference to these Standalone Ind-AS financial statementsassessing the risk that material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial 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 over financialreporting with reference to these Standalone Ind-AS financial statements.
Meaning of Internal Financial Controls Over Financial Reporting with reference to theseFinancial Statements
A company's internal financial control over financial reporting with reference to theseStandalone Ind-AS financial statements is a process designed to provide reasonableassurance regarding the reliability of financial reporting and the preparation offinancial statements for external purposes in accordance with generally acceptedaccounting principles. A company's internal financial control over financial reportingwith reference to these Standalone Ind-AS financial statements includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are beingmadeonlyinaccordancewithauthorisations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorisedacquisition use or disposition of the company's assets that could have a material effecton the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting withreference to these Standalone Ind-AS Financial Statements
Because of the inherent limitations of internal financial controls over financialreporting with reference to these Standalone Ind-AS financial statements including thepossibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting with referenceto these Standalone Ind-AS financial statements to future periods are subject to the riskthat the internal financial control over financial reporting with reference to theseStandalone Ind-AS financial statements may become inadequate because of changes inconditions or that the degree of compliance with the policies or procedures maydeteriorate.
In our opinion the Company has in all material respects adequate internal financialcontrols over financial reference to these Standalone Ind-AS financial statements and suchinternal financial controls over financial reporting with reference to these StandaloneInd-AS financial statements were operating effectively as at March 31 2020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.