Independent Auditors Examination Report on Restated Financial Information of HAPPY SQUARE OUTSOURCING SERVICES LIMITED (Formerly Known as HAPPY SQUARE OUTSOURCING SERVICES PRIVATE LIMITED)
To,
The Board of Directors
HAPPY SQUARE OUTSOURCING SERVICES LIMITED
(Formerly Known as HAPPY SQUARE OUTSOURCING SERVICES PRIVATE LIMITED)
240, Nagpur Road, Madan Mahal,
Jabalpur - 482008, Madhya Pradesh, India.
Dear Sirs,
1. We have examined the attached Restated Standalone Financial Information of HAPPY SQUARE OUTSOURCING SERVICES LIMITED (Formerly Known as HAPPY SQUARE OUTSOURCING SERVICES PRIVATE LIMITED) (the "Company") comprising the Restated Standalone Statement of Assets and Liabilities as at July 31 2024, March 31 2024, 2023 and 2022, the Restated Standalone Statements of Profit and Loss and the Restated Standalone Cash Flow Statement for the period/years ended July 31, 2024, March 31 2024, 2023 and 2022 the Summary Statement of Significant Accounting Policies, and other explanatory information (collectively referred to as, the "Restated Standalone Financial Information"), as approved by the Board of Directors of the Company at their meeting held on 10th January, 2025 for the purpose of inclusion in the Draft Red Herring Prospectus/ Red Herring Prospectus/ Prospectus prepared by the Company in connection with its proposed Initial Public Offer of equity shares ("IPO") on Emerge Platform of National Stock Exchange of India Limited ("NSE").
These restated Summary Statement have been prepared in terms of the requirements of:
a. Section 26 of Part I of Chapter III of the Companies Act, 2013 (the "Act") read with Rules 4 to 6 of Companies (Prospectus and Allotment of Securities) Rules, 2014 ("the Rules");
b. The Securities and Exchange Board of India (Issue of Capital and Disclosure Requirements) Regulations, 2018, as amended ("ICDR Regulations"); and
c. The Guidance Note on Reports in Company Prospectuses (Revised 2019) issued by the Institute of Chartered Accountants of India ("ICAI"), as amended from time to time (the "Guidance Note").
2. The Companys Board of Directors is responsible for the preparation of the Restated Standalone Financial Information for the purpose of inclusion in the Draft Red Herring Prospectus/Red Herring Prospectus/Prospectus to be filed with Securities and Exchange Board of India, Registrar of Companies, Chennai, and the Stock Exchange in connection with the proposed IPO. The Restated Standalone Financial Information has been prepared by the management of the Company on the basis of preparation staled in Annexure 4 to the Restated Standalone Financial Information. The responsibilities of the Board of Directors of the Company include designing, implementing, and maintaining adequate internal control relevant to the preparation and presentation of the Restated Standalone Financial Information. The Board of Directors are also responsible for identifying and ensuring that the Company complies with the Act, ICDR Regulations and the Guidance Note.
3. We have examined such Restated Financial Information taking into consideration:
The terms of reference and terms of our engagement agreed upon with you in accordance with our engagement letter dated 21st August 2024 in connection with the proposed IPO of equity shares of HAPPY SQUARE OUTSOURCING SERVICES LIMITED (the "Issuer Company") on SME Platform of National Stock exchange of India Limited ("NSE EMERGE") Emerge platform of NSE;
b The Guidance Note also requires that we comply with the ethical requirements of the Code of Ethics issued by the 1CA1;
c. Concepts of test checks and materiality to obtain reasonable assurance based on verification of evidence supporting the Restated Financial Information; and
d. The requirements of Section 26 of the Act and the ICDR Regulations. Our work was performed solely to assist you in meeting your responsibilities in relation to your compliance with the Act, the ICDR Regulations and the Guidance Note in connection with the IPO.
4. These Restated Financial Information have been compiled by the management from:
a. Audited special purpose interim financial statements of the Company for the period ended on July 31, 2024 prepared in accordance with Accounting Standard as prescribed under section 133 of the Act read with Companies (Accounting Standards) Rules as amended, and other accounting principles generally accepted in India, which has been approved by the Board of Directors at their meeting held on 10 January, 2025
b. Audited Financial Statements of the Company for the period ended on March 31, 2024 prepared in accordance with Accounting Standard as prescribed under section 133 of the Act read with Companies (Accounting Standards) Rules as amended, and other accounting principles generally accepted in India, which has been approved by the Board of Directors at their meeting held on 02nd September, 2024.
c. Audited Financial Statements of the Company for the years ended on March 31, 2023, prepared in accordance with the Accounting Standards as prescribed under Section 133 of the Act read with Companies (Accounting Standards) Rules as amended, and other accounting principles generally accepted in India, which have been approved by the Board of Directors at their meeting held on September 27, 2023.
d. Audited Financial Statements of the Company for the years ended on March 31, 2022, prepared in accordance with the Accounting Standards as prescribed under Section 133 of the Act read with Companies (Accounting Standards) Rules as amended, and other accounting principles generally accepted in India, which have been approved by the Board of Directors at their meeting held on September 25, 2022.
5. For the purpose of our examination, we have relied on:
a. Auditors Report issued by us dated I0lh January, 2025 and 02nd September, 2024, on the Financial Statement of the Company for the period ended on July 31lh 2024 and March 31s 2024 respectively.
b. Auditors Report issued by the previous auditor dated September 27lh 2023 and September 25lh 2022 on the financial statements of the Company as at and for the years ended March 31st 2023 and 2022 respectively as referred in Paragraph 4(c) above.
c. The audit for the financial years ended March 31s1, 2023, and 2022 were conducted by the previous auditors CA Trishala Koshta, Chartered Accountant and N Patel & Associates, Chartered Accountants ("The previous auditors"), having Membership no. 437719 and Firm registration number 029315C respectively. The previous auditor is not in the position to examine the Restated statement of assets and liabilities and Restated Statement of Profit and Loss Accounts and Restated Cash Flow statements, the summary statement of significant accounting policies, and other explanatory information (collectively, the audited financial information). We have performed adequate procedures to restate the financial information lor the said years. The examination report included for the said years is based solely on the report submitted by the previous auditor.
6. There were no qualifications in the Audit Reports issued as at and for the years ended on July 3 Is1 2024, March
31 2024, 2023 and 2022 which would require -adjustments in this Restated Financial Information of the
Company.
7. Based on our examination and according to the information and explanations given to us, we report that:
a. The Restated Summary Statements have been made after incorporating adjustments for the changes in accounting policies retrospectively in respective financial years to rcllect the same accounting treatment as per the changed accounting policy for all reporting periods, if any;
b. The Restated Summary Statements do not require any adjustments for the matter(s) giving rise to modifications mentioned in paragraph 6 above.
c. The Restated Summary Statements have been prepared in accordance with the Act, ICDR Regulations and the Guidance Note.
d. The Restated Summary Statements have been made after incorporating adjustments for prior period and other material amounts in the respective financial years to which they relate, if any;
c. There was no change in accounting policies, which need to be adjusted in the Restated Summary Statement. The details ot Prior period Adjustments are given in Annexure 5 of the Restated Financial Statements.
f. From Financial Years 2021-22 to 2023-24 and for the period ended July 31, 2024, i.e. the years covered in the Restatement, the Company has not declared and paid any dividend.
8. We have also examined the following other financial information relating to the Company prepared by the
Management and as approved by the Board of Directors of the Company and annexed to this report relating to the Company as at and for the period / years ended on July 31st 2024, March 31st 2024, 2023 and 2022 proposed to be included in the Draft Red Herring Prospectus / Red Herring Prospectus / Prospectus.
Annexure No. | Particulars |
1 | Financial Statement of Assets & Liabilities as Restated |
2 | Financial Statement of Profit & Loss as Restated |
3 | Financial Statement of Cash Flow as Restated |
4 | Significant Accounting Policy and Notes to the Restated Summary Statements |
5 | Adjustments made in Restated Financial Statements / Regrouping Notes |
6 | Statement of Share Capital as restated |
7 | Statement of Reserves & Surplus as Restated |
8 | Statement of Long-Term Borrowings as Restated |
9 | Statement of Long-Term Provisions as Restated |
10 | Statement of Short-Term Borrowings as Restated |
11 | Statement of Trade Payable as Restated |
12 | Statement of Other Current Liabilities as Restated |
13 | Statement of Short-Term Provisions as Restated |
14 | Statement of Property, Plant & Equipment and Depreciation as Restated |
15 | Statement of Non-Current Investments as Restated |
16 | Statement of Long-Term Loans and Advances |
17 | Statement of Deferred Tax Assets as Restated |
18 | Statement of Trade Receivables as Restated |
18 | Statement of lnventories as Restated |
19 | Statement of Cash & Bank Balances as Restated |
20 | Statement of Short-Term Loans and Advances as Restated |
21 | Statement of Other Current Assets as Restated |
22 | Statement of Revenue from Operations as Restated |
23 | Statement of Other Income as Restated |
24 | Statement of Cost of Services Consumed as Restated |
25 | Statement of Employees Benefit Expenses as Restated |
26 | Statement of Finance Costs as restated |
27 | Statement of Depreciation & Amortisation Expenses as Restated |
28 | Statement of Other Expenses as Restated |
29 | Statement of Summary of Accounting Ratios as Restated |
30 | Statement of Tax Shelter as Restated |
31 | Statement of Related Parties Transaction as Restated |
32 | Statement of Provision for Gratuity as Restated |
33 | Statement of Contingent Liability as Restated |
34 | Additional Disclosures with respect to Amendments to Schedule III as Restated |
35 | Statement of Capitalisation Statement as Restated |
9. We, M/s. Jyoti Asrani & Associates, Chartered Accountants have been subjected to the peer review process of the Institute of Chartered Accountants of India ("ICAI") and hold a valid peer review certificate issued by the "Peer Review Board" of the ICAI.
10. The Restated Standalone Financial Information do not reflect the effects of events that occurred subsequent to the respective dates of the reports on the Special Purpose Standalone Financial Statements and Audited Standalone Financial Statements mentioned in paragraph 5 above.
11. This report should not in any way be construed as a reissuance or re-dating of any of the previous audit reports issued by us, nor should this report be construed as a new opinion on any of the financial statements referred to herein.
12. We have no responsibility to update our report for events and circumstances occurring after the date of the report.
13 Our report is intended solely for use of the Board of Directors for inclusion in the Draft Red Herring Prospectus/ Red Herring Prospectus/ Prospectus to be filed with Securities and Exchange Board of India, the Stock Exchanges and Registrar of Companies- Chennai in connection with the proposed IPO. Our report should not be used referred to, or distributed for any other purpose except with our prior consent in writing. Accordingly not accept or assume any liability or any duty of care for any other purpose or to any other person to whom this report is shown or into whose hands it may come without our pno. consent in writing.
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