To the Members of Khoday India Limited.
1. Report on the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Khoday India
Limited ("the Company"), which comprise the Balance Sheet as at 31st
March, 2017, the Statement of Profit and Loss and Cash Flow Statement for the year then
ended, and a summary of significant accounting policies and other explanatory information.
2. Managements Responsibility for Standalone Financial Statements
The Companys Board of Directors is responsible for the matters in section 134(5) of
the Companies Act, 2013 ("the Act") with respect to the preparation of these
standalone financial statements, on a going concern basis, that give a true and fair view
of the financial position, financial performance and cash flows of the Company in
accordance with the accounting principles generally accepted in India, including the
Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes maintenance of
adequate accounting records in accordance with the provision of the Act for safeguarding
of the assets of the Company and for preventing & detecting the frauds and other
irregularities; selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design and implementation of
adequate Internal Financial Controls that were operating effectively for ensuring the
accuracy and completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view and are free from
material misstatement, whether due to fraud or error.
3. Auditors Responsibility
Our responsibility is to express an opinion on these standalone financial statements
based on our audit.
We have taken into account the provisions of the Act, the accounting and auditing
standards and matters which are required to be included in the audit report under the
provisions of the Act and the Rules made there under.
We conducted our audit in accordance with the Standards on Auditing specified under
section 143(10) of the Act, Those Standards require that we comply with ethical
requirements and pian and perform the audit to obtain reasonable assurance about whether
the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the financial statements. The procedures selected depend on the auditors
judgment, including the assessment of the risks of material misstatement of the financial
statements, whether due to fraud or error. In making those risk assessments, the auditor
considers internal financial control relevant to the Companys preparation of the
financial statements that give true and fair view in order to design audit procedures that
are appropriate in the circumstances. An audit also includes evaluating the
appropriateness of accounting policies used and the reasonableness of the accounting
estimates made by Companys Directors, as well as evaluating the overall presentation of
the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the standalone financial statements.
4. Opinion
In our opinion and to the best of our information and according to the explanations
given to us, the aforesaid standalone financial statements give the information required
by the Act in the manner so required and give a true and fair view in conformity with the
accounting principles generally accepted in India:
a) in the case of the Balance Sheet, of the state of affairs of the Company as at 31st
March, 2017;
b) in the case of the Statement of Profit and Loss, of the loss for the year ended on
that date; and
c) in the case of the Cash Flow Statement, of the cash flows for the year ended on that
date.
5. Emphasis of Matter
We draw attention to Note no. 28 regarding Reduction of Capital under Section 100 of
the Companies Act, 1956 confirmed by the Honble High Court of Karnataka and appeal filed
by SEBI.
Our opinion is not qualified in respect of this matter.
6. Report on Other Legal and Regulatory Requirements
I) As required by the Companies(Auditors Report) Order, 2016("the Order")
issued by the Central Government of India in terms of sub-section(11) of section 143 of
the Act, we give in the Annexure - A, a statement on the matters specified in paragraphs 3
and 4 of the Order.
II) As required by section 143(3) of the Act, we report that:
a) We have sought and obtained all the information and explanations which to the best
of 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 the
Company so far as appears from our examination of those books.
c) The Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement dealt with
by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the
Accounting Standards 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 the directors as on 31st
March, 2017, and taken on record by the Board of Directors, none of the directors are
disqualified as on 31st March, 2017, from being appointed as a director under
Section 164(2) of the Act.
f) With respect to the adequacy of Internal Financial Control over Financial Reporting
of the Company and operating effectiveness of such controls, refer to our separate report
in "Annexure - B"
g) With respect to the other matters included in the Auditors Report in accordance
with Rule 11 of the Companies(Audit and Auditors) Rules, 2014, in our opinion and to the
best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigation on its financial position
in its financial statements vide Note no. 27, Note No. 28 and Note no. 41 to the Financial
Statements.
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There were no amounts that were required to be transferred to the Investor
Education and Protection Fund by the Company.
iv. The company had provided requisite disclosures in its financial statements as to
holdings as well as dealings in Specified Bank Notes during the period from 8th November,
2016 to 30th December, 2016 and the same were in accordance with the books of accounts
maintained by the Company.
for RANGARAJU AND ASSOCIATES CHARTERED ACCOUNTANTS
(KRISHNAN RANGARA$^ PARTNER
Membership No. 018fj5v Firm No. 00691251
Place : Bangalore
Date : 07.06.2017
ANNEXURE - A TO THE AUDITORS REPORT
(Referred to in Para 6 of our report of even date)
i. (a) The Company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets.
(b) We have been informed that the fixed assets of the Company are physically verified
by the Management according to a phased program designed to cover all the items over a
period of three years, which in our opinion, is reasonable having regard to the size of
the Company and the nature of its assets. Pursuant to the program, physical verification
was carried out during the year and to the best of our knowledge no material discrepancies
were noticed.
(c) The title deeds of immovable properties are held in the name of the Company.
ii. As explained to us, Inventories have been physically verified by the management at
reasonable intervals during the year and no material discrepancies were noticed.
iii. The Company has not granted any Loans, secured or unsecured to Companies, firms,
Limited Liability Partnerships or other parties covered in the Register maintained under
Section 189 of the Companies Act, 2013. As the Company has not granted any loans to
Companies, firms, Limited Liability Partnerships or other parties covered in the Register
maintained under Section 189 of the Companies Act, 2013, reporting under Clauses (iii)
(a), (iii) (b) and (iii) (c) of the Companies (Auditors Report) order, 2016 does notarise.
iv. There are no loans, guarantees or security extended by the Company under the
provisions of Section 185 and 186 of the Companies Act, 2013. In respect of Investments
made, the Company has complied with the provisions of Section 186 of the Companies Act,
2013.
v. In our opinion and according to the information and explanations given to us, the
Company has not accepted any deposits from the public within the meaning of Section 73 to
76 of the Companies Act, 2013 and the rules framed there under. Therefore, reporting under
clause (v) of the Companies (Auditors Report) Order, 2016 does not arise.
vi. According to the information and explanations given to us, the Central Government
has not prescribed maintenance of cost records under Section 148(1) of the Companies Act,
2013
vii. (a) According to the information and explanations given to us and as per our
verification of the records of the Company, in our opinion, the company is generally
regular in depositing undisputed statutory dues including Income Tax, Service Tax,
Employees Provident Fund, Employees State Insurance, Customs Duty, Excise Duty and other
statutory dues applicable to it and there are no statutory dues outstanding for a period
of more than six months from the date they become payable as on the last day of the
financial year.
(b) According to the information and explanations given to us and as per records of the
Company, the following are the particulars of dues on account of Employees Provident Fund,
Income Tax and Entry Tax which have not been deposited/partially deposited under protest
on account of dispute before the forum mentioned there against.
| Name of the Statute |
Nature of Dues & Related Period |
Amount of Demand (Rs. In Thousands) |
Amount Deposited under Dispute (Rs. In Thousands) |
Forum where dispute is pending |
| Income Tax Act, 1961 |
Income Tax for the AY 2014-15 |
549 |
|
Commissioner of Income Tax (Appeals) |
| Employees Provident Fund |
FY 2006-07 and 2007-08 |
10,716 |
8,100 |
EPF Tribunal, New Delhi |
| Employees Provident Fund Damages |
FY 2001 to FY 2013 |
4,002 |
1,002 |
EPF Appellate Tribunal, Bangalore |
viii. According to information and explanations given to us, the company has not
defaulted in repayment of principal and interest dues to the bank or any financial
institutions.
ix. The Company has not raised moneys by way of Initial Public Offer or Further Public
Offer. In our opinion, and according to information and explanations given to us, term
loans have been applied for the purposes for which they were raised.
x. According to the information and explanations given to us, no fraud on or by the
company has been noticed or reported during the course of our audit.
xi. According to the information and explanations given to us, no managerial
remuneration has been paid to the Directors. However, sitting fees has been paid to
certain Directors in accordance with the requisite approvals mandated by the provisions of
Section 197(5) of Companies Act, 2013 read with the Rules made thereunder.
xii. In our opinion, the Company is not a Nidhi Company. Hence, reporting under Clause
(xii) of the Companies(Auditors Report) Order, 2016 does not arise.
xiii. According to the information and explanations given to us and in our opinion, the
transactions with related parties are in compliance with Section 177 and 188 of the
Companies Act, 2013 and the details have been disclosed in the Financial Statements etc.,
as required by the applicable Accounting Standard.
xiv. According to the information and explanation given to us, the Company has not made
any preferential allotment or private placement of shares. Hence, reporting under Clause
(xiv) of the Companies(Auditors Report) Order, 2016 does not arise.
xv. According to the information and explanations given to us, the Company has not
entered into any non-cash transactions with the directors or persons connected with them.
Hence, reporting under Clause (xv) of the Companies (Auditors Report) Order, 2016 does
not arise.
xvi. According to the information and explanation given to us and in our opinion, the
Company is not required to be registered under Section 45-IA of the Reserve Bank of India
Act, 1934.
for RANGARAJU AND ASSOCIATES CHARTERED ACCOUNTANTS
(KRISHNAN RANGARAftft/ PARTNER )
Membership No. 018^91 Firm No. 006912S
Place : Bangalore
Date : 07.06.2017
ANNEXURE - B TO THE INDEPENDENT AUDITORS REPORT OF EVEN DATE ON THE STANDALONE
FINANCIAL STATEMENTS OF KHODAY INDIA LIMITED
Report on the Internal Financial Controls under Section 143 (3) (i) of the Companies
Act, 2013 ("the Act")
We have audited the internal financial controls over financial reporting of Khoday
India Limited ("the Company") as of March 31, 2017 in conjunction with our audit
of the standalone financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting criteria
established by the Company considering the essential components of internal control stated
in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
issued by the Institute of Chartered Accountants of India. These responsibilities include
the design, implementation and maintenance of adequate internal financial controls that
were operating effectively for ensuring the orderly and efficient conduct of its business,
including adherence to companys policies, the safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and completeness of the accounting
records, and the timely preparation of reliable financial information, as required under
the Companies Act, 2013.
Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting
(the "Guidance Note") and the Standards on Auditing, issued by ICAI and deemed
to be prescribed under section 143(10) of the Companies Act, 2013, to the extent
applicable to an audit of internal financial controls, both applicable to an audit of
Internal Financial Controls and, both issued by the Institute of Chartered Accountants of
India. Those Standards and the Guidance Note require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether
adequate internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness.
Our audit of internal financial controls over financial reporting included obtaining an
understanding of internal financial controls over financial reporting, assessing the risk
that a material weakness exists, and testing and evaluating the design and operating
effectiveness of internal control based on the assessed risk. The procedures selected
depend on the auditors judgement, including the assessment of the risks 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 to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a process designed
to provide reasonable assurance regarding the reliability of financial reporting and the
preparation of financial statements for external purposes in accordance with generally
accepted accounting principles. A companys internal financial control over financial
reporting includes those policies and procedures that
(1) Pertain to the maintenance of records that, in reasonable detail, accurately and
fairly reflect the transactions and dispositions of the assets of the company;
(2) Provide reasonable assurance that transactions are recorded as necessary to permit
preparation of financial statements in accordance with generally accepted accounting
principles, and that receipts and expenditures of the company are being made only in
accordance with authorisations of management and directors of the company; and
(3) Provide reasonable assurance regarding prevention or timely detection of
unauthorised acquisition, use, or disposition of the companys assets that could have a
material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, including the possibility of collusion or improper management override of
controls, material misstatements due to error or fraud may occur and not be detected.
Also, projections of any evaluation of the internal financial controls over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
Opinion
In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at March 31, 2017, based on the
internal control over financial reporting criteria established by the Company considering
the essential components of internal control stated in the Guidance Note on Audit of
Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered
Accountants of India.
for RANGARAJU AND ASSOCIATES CHARTERED ACCOUNTANTS
(KRISHNAN RANGARAJA PARTNER)
Membership No. 0184S& Firm No. 006912S
Place: Bangalore Date: 07.06.2017
+91-9892691696
