KHFM Hospitality & Facility Mgt. Services Ltd Auditor Reports

To

The Members

KHFM Hospitality & Facility Management Services Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying Standalone financial statements of KHFM Hospitality & Facility Management Services Ltd (“the Company”), which comprises of the Balance Sheet as at 31st March, 2025, and the Statement of Profit and Loss (including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and other explanatory information^ hereinafter referred to as “the Standalone financial statements”)

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 Companies Act,2013 (“the act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31st March, 2025, and its profit (including other comprehensive income), its cash flows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditors Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provision of the Act and the Rules there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on standalone financial statements.

Emphasis of Matter

We draw attention to -

a) Note 30 of Standalone Financial Statements. The Company is exposed to various laws and regulations. Consequently, provisions and contingent liabilities disclosures may arise from direct and indirect tax proceedings, legal proceedings including employment/labour claims and other government regulatory matters. The company assesses the need to make provisions or to disclose a contingent liability on case-to-case basis considering the underlying facts of each litigation. As at 31st March, 2025, the Company has ascertained contingent liabilities of Rs. 3,040.54 lakhs which includes disputed Service tax, GST, ESIC, Income Tax liabilities and bank guarantees. The eventual outcome of the litigations may remain uncertain and estimation at balance sheet date for ascertained/unascertained liabilities involves extensive judgement of management including input from legal counsel due to complexity of each litigation. But considering the facts of the case, the company and the tax advisors believe that the outcome should be in the favor of the company for its ascertained contingent liabilities.

b) Note 39 of Standalone Financial Statements- Balances of certain trade receivables, trade and other payables (including payables to micro, small and medium enterprises, capital creditors), and loans & advances are subject to third party confirmations. The management is confident that this process will not have any material impact on the financial statements.

c) Note 11 of Standalone Financial Statements- Contract Assets disclosed in the standalone financial results, where there is an area of enhanced professional judgment relating to the recoverable work in progress (Contract Assets) amounting to Rs. 3911.04 lakhs representing the value of work completed but are pending to be billed on completion of billing milestones as on 31st March 2025. Recognition of unbilled revenue and related contract assets depends on various factors and judgements, contractual commitments, shifts in the scope of work, client- induced delays, negotiation processes, and modifications to the billing cycle period including few of those which are awaiting final confirmations with clients of the company.

While we note that the recoverability of such assets is subject to future outcome, we consider this to be an area of enhanced professional judgment due to the materiality of the amount. The management has represented that these balances are fully recoverable based on the progress of underlying projects. However, requisite provisions have been made against the same.

d) Note 26 & Note 11 of Standalone Financial Statements. The recording system regard to site expenses and related site advances needs advancement to ensure completeness and relevant transaction trail. However, according to the management estimates, the said transactions are fairly stated in the financial statements.

Our Opinion is not modified in respect of aforesaid Matters.

Key Audit Matters

Key audit matters (‘KAM) are those matters that, in our professional judgment, were of most significance 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 financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

The key audit matters	How our audit addressed the key audit matter
Revenue recognition
Revenue recognition was identified as key Audit Matter since-	Our Audit Procedures on revenue recognized from fixed price contracts included:
• There is an inherent risk around the accuracy and existing of revenues recognized considering the customized and complex nature of these contracts.	• Obtained an understanding of the systems, process and controls implemented by the management for recording and computing revenue and the associated contract assets.
• Application of Revenue Recognition accounting standard (Ind As 115 - Revenue from contracts with customers) is complex and involves a number of key judgements and estimates in mainly identifying performance obligations, related transaction price and estimating the future cost to completion of these contracts, which is used to determine the percentage of completion of the relevant performance obligation.	• On selected specific/statistical samples of contracts, we tested that the revenue recognized is in accordance with the revenue recognition accounting standard.
• Due to large variety and complexity of contractual terms, significant judgements are required to estimate the amounts. If the actual amount differs from the amount estimated, this will have an impact on the the revenue recognized in the current period.	• We selected a sample of continuing and new contracts and performed the following procedures:
• These contracts may involve onerous obligations which requires critical assessment of foreseeable losses to be made.	> We read the agreements with the customers to identify the distinct performance obligations, the transaction price and its allocation to the performance obligations in the contract and the classification of the contract for the basis of revenue recognition in accordance with Ind As 115.
• As at March 31st, 2025, contract assets of business operation comprises of Rs. 3911.04 lacs. Recoverability of certain contract assets are impacted due to several factors like the customer profile, delays in completion certification in certain projects due to long project tenure and project disputes and financial ability of the customers, etc. The assessment of the impairment of such contract assets requires significant management judgement.	> For Fixed maintenance contracts, we verified the period of the contract with the customer agreements and the determination of the revenue. We verified if the revenue was recognized appropriately over the period of contract of services being rendered and whether the revenue recognized was based on the estimate of the amount of consideration to which the Company is entitled in exchange for transferring the services.
	> For Fixed price contracts, we have verified the measurement of revenue for the extent of delivery of performance obligations with the actual and estimated cost of efforts as per the projected budgets.
	• Evaluated the identification of performance obligations and the prescribed transaction.
	• Tested the managements computation of the estimation of contract costs and onerous obligations, if any. • We performed analytical procedures as applicable for reasonableness of revenues disclosed and service offerings.
	• We:
	> Assessed that the estimates of costs to complete were reviewed and approved by appropriate designated management personnel;
	> Performed a retrospective analysis of costs incurred with estimated costs to identify significant variations and verified whether those variations are required to be considered in estimating the remaining costs to complete the contract; and
	> Inspected underlying documents and performed analytics to determine reasonableness of contract costs.
	• Our audit procedures included the following:
	> We evaluated the Company processes and controls relating to the monitoring of trade receivables and review of credit risks of customers. We assessed the design and tested the operating effectiveness of relevant controls in relation to the process adopted by management for testing the impairment of these contract assets.
	> As a part of substantive audit procedures, we tested the ageing of contract assets. We examined the Our audit procedures included the following and ability to repay the debt based on historical payment trends and the reason for delay in collection of trade receivables including any project disputes. Further, we assessed the expected credit loss impairment and the receipts and certification after year-end. We assessed the disclosures on the contract assets in Note 11 of financial statements.
Allowance for doubtful debts/ Provision for Expected Credit Loss
Allowance for doubtful debts was identified as key Audit Matter since-	• We assessed the validity of material long outstanding receivables by considering, past payment history and unusual patterns to identify potentially impaired balances.
• Receivables comprise a significant portion of the liquid assets of the Company.	• The assessment of the appropriateness of the allowance for trade receivables comprised a variety of audit procedures including:
• There is an inherent risk around the accuracy of the companys trade receivables being appropriately provided for, particularly in cases where resolution is in progress.	> Verifying the appropriateness and reasonableness of the assumptions applied in the managements assessment of the receivables allowance.
• The estimation of the allowance for trade receivables is a significant judgement area and accordingly is therefore considered a key audit matter.	> To address the risk of management bias, we evaluated the results of our procedures against audit procedures on other key balances to assess whether or not there was an indication of bias.

Information other than Financial Statements and Auditors Report thereon

The Companys management and Board of Directors are responsible for the other information. The other information comprises the information included in the Companys annual report but does not include the standalone financial statements and our auditors report thereon. The Annual Report is expected to be made available to us after the date of this Auditors Report.

Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

When we read the Annual Report, If, we conclude that there is a material misstatement therein, we are required to communicate the matter to those charged with governance and take necessary actions as applicable under the relevant laws and regulations.

Managements Responsibility for the Standalone Financial Statements

The Companys Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the Companys ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, of has no realistic alternative but to do so.

Board of Directors are also responsible for overseeing the companys financial reporting process.

Auditors Responsibility

Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud of error, and to issue an auditors report that includes our opinion.

Reasonable assurance is a high level of assurance but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.

As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud of error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risks of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omission, misrepresentation, of the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstance. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial control with reference to standalone financial statements in place and the operating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management and Board of Directors.

• Conclude on the appropriateness of managements use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors report to the related disclosures in the standalone financial statements or, if such disclosers are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors report. However, future events or conditions may cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation, structure, and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transaction and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate make it probable that the economic decision of a reasonably knowledgeable user of the financial statements may be influenced. 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 financial statements.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the currents period and are therefore the key audit matter. We describe these matters in our auditors report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

a. The standalone financial statements of the company for the year ended March 31st, 2024 were audited by another auditor who expressed an unmodified opinion on those statements as on 30th May 2024.

b. The figures for the previous periods / year are re-classified / re-arranged / re-grouped by the Management of the

Company to make them comparable with current period.

Our Opinion is not modified in respect of aforesaid Other Matters.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2020 (“the Order”) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.

2. A. As required by Section 143(3) of the Act, we report to the extent applicable 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 it appears from our examination of those books.

c) The Standalone financial statements dealt with by this Report are in agreement with the relevant books of account.

d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards prescribed under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

e) On the basis of the written representations received from the directors as on 31 st March 2025 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2025 from being appointed as a director in terms of Section 164(2) of the Act.

f) The modifications relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.

g) With respect to the adequacy of the internal financial controls over financial reporting of the Company, and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”

B. With respect to the other matters to be included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:

a. The Company has disclosed the impact of pending litigation as at 31st March 2025 on its financial position in its standalone financial statements- Refer Note 30 of the standalone financial statements.

b. The Company has made provision, as required under the applicable law or accounting standards, for material foreseeable losses, if any. The Company did not have any long-term derivative contracts.

c. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company.

d. i. The Management has represented that, to the best of its knowledge and belief, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;

ii. The Management has represented that, to the best of its knowledge and belief, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities ("Funding Parties"), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries. Based on reasonable audit procedures adopted by us, nothing has come to our notice that such representation contains any material misstatement.

iii Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement

e. As stated in Note 54 of the standalone financial statements, the Board of Directors of the Company have not declared or recommended any dividend for the financial year ended March 31, 2025.

f. Based on our examination, which included test checks, the Company has used accounting software systems for maintaining its books of account for the financial year ended March 31st, 2025 which has the feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software systems. Further, during the course of our audit we did not come across any instance of the audit trail feature being tampered with and the audit trail has been preserved by the Company as per the statutory requirements for record retention.

C. With respect to the matter to be included in the Auditors Report under Section 197(16) of the Act:

In our opinion and according to the information and explanations given to us, the remuneration paid by the Company to its directors during the current year is in accordance with the provisions of Section 197 of the Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.

ANNEXURE AUDITORS REPORT

(Referred to in paragraph 1 under “Report on Other Legal and Regulatory Requirements” section of our report to the members of KHFM Hospitality and Facility Management Services Limited of even date)

To the best of our information and according to the explanations provided to us by the Company and the books of account and records examined by us in the normal course of audit, we state that:

i. (a) The Company except for certain PPEs /client premises equipment, which due to their atypical nature or location/situation; has maintained records proper records showing full particulars, including quantitative details and situation of Property, Plant & Equipment(“PPE"), capital work in progress and relevant details of right of use of assets. The Company has maintained proper records showing full particulars of intangible assets.

(b) The Company, has a program of verification of property, plant and equipment, capital work in-progress, and right-of-use assets so to cover all the items once every 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, certain Property, Plant and Equipment, capital work-in progress and right of use assets were due for verification during the year and were physically verified by the management and internal auditors during the year. According to the information and explanations given to us, no material discrepancies were noticed on such verification.

(c) With respect to immovable properties (other than properties where the Company is the lessee and the lease agreements are duly executed in favour of the Company) disclosed in the financial statements included in property, plant and equipment, investment properties and capital work-in progress and according to the information and explanations given to us and based on the examination of the property tax receipts, utility bills for building constructed, registered sale deed / transfer deed / conveyance deed provided to us, we report that, the title deeds of such immovable properties are held in the name of the Company as at the balance sheet date.

(d) In our opinion and according to the information and explanations given to us, the Company has not revalued its PPE (including Right of Use assets) or intangible assets or both during the year.

(e) In our opinion and according to the information and explanations given to us and on the basis of our examination of the records of the Company, no proceedings have been initiated or are pending against the Company for holding any benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder.

ii. (a) The inventories were physically verified during the year by the management at reasonable intervals. In our opinion and according to the information and explanations given to us, the coverage and procedure of such verification by the Management is appropriate having regard to the size of the Company and the nature of its operations. No discrepancies of 10% or more in the aggregate for each class of inventories were noticed on such physical verification of inventories when compared with books of account.

(b) The Company has been sanctioned working capital limits in excess of ? 5 crores, in aggregate, from banks on the basis of security of current assets. The Company has filed quarterly returns or statements with such banks, which are in agreement with the books of account other than those as set out below:

Name of the Bank	Agreegate Working Capital limits sanctioned	Nature of Assets offered as Security	Quarter ended	Amounts disclosed as per Quarterly return / Statement (Rs in lakhs)	Amount as per books of Accounts (Rs in lakhs)	Difference Amount (Rs in lakhs)
Apna Sahakari Bank, Bank of India & State Bank of India	Apna Shakari Bank -1895 lakhs Bank of India- 752 lakhs State Bank of India- 585 lakhs	Receivables, Inventory, Contract Assets (work in progress)	Sept- 2024	7327.55	7906.75	(579.20)
Apna Sahakari Bank, Bank of India & State Bank of India	Apna Shakari Bank -1895 lakhs Bank of India- 752 lakhs State Bank of India- 585 lakhs	Receivables, Inventory, Contract Assets (work in progress)	March- 2025	7354.63	8010.15	(655.52)

Reason for difference Note: Primary security

• Pari-passu charge on the Companys entire assets namely stock of raw materials, finished goods, stocks in- process, consumables stores and spares and book debts (120 days) at its plant sites or anywhere else, in favor of the Bank, by way of hypothecation.

According to the information and explanations furnished to us by the management of the company, we have observed that stock & receivable statements are advanced to the bank on or before tenth of the subsequent month.

Statement of current assets in the said statement includes receivables, contract assets (Work in progress) and Inventory.

It is important to note that the preparation of these stock and receivable statements relies on the assumption that billing and invoicing will adhere to a predetermined rotation cycle. The duration of the invoicing cycle varies, contingent on the type of work order in hand.

However, it is essential to highlight due to various factors such as contractual commitments, changes in scope of work, client caused delays, negotiations and changed period/rotation of billing cycle, assumption governing contract assets (work in progress) have been restructured. According to the managements evaluation, these rearrangements have been implemented in a manner that ensures there is no significant dissimilarity between the contract assets before and after the restructuring process.

Its important to note that in the reconciliation process, both the figures presented in the ‘Stock and Book Debts Statement and those recorded in the ‘Books of Accounts are treated as gross amounts before any Expected Credit Loss (ECL) provision if applied. This approach is employed to ensure an accurate match between the figures.

Additionally, regarding the Stock/Book Debts statement, its worth highlighting that this statement provides a breakdown of receivables and contract assets based on their age, but it does not provide a specific bifurcation between current and non-current receivables. As a result, the figures presented in the statement from the books of accounts encompass both current and non-current receivables. This approach is adopted to facilitate reconciliation between the figures.

Moreover, as per information and explanations provided to us, the Company has already created provision for bad debts /Expected credit loss of Rs 1018.22 lakhs as on 31st March, 2025 to compensate for the difference between ‘amounts disclosed as per Quarterly return / Statement and ‘amounts as per books of accounts.

iii. In our opinion and according to the information and explanations given to us, the Company has not made investments in, provided any guarantee or security or granted any loans or advances in the nature of loans, secured or unsecured, to companies, firms, Limited Liability Partnerships or any other parties during the financial year Accordingly, the provisions of clause 3(iii) (a) (b) (c) (d) (e)and (f) of the Order are not applicable to the Company.

iv. In our opinion and according to the information and explanation given to us, the Company during the year has not granted any loan, made investment and provided guarantees and securities to the parties covered under Section 185 and 186 of the Act. Accordingly, clause (iv) of Paragraph 3 of the order is not applicable to the Company.

v. In our opinion and according to the information and explanations given to us, the Company has not accepted any deposits or amounts which are deemed to be deposits from the public during the year in terms of directives issued by the Reserve Bank of India or the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the rules framed there under. Accordingly, paragraph 3(v) of the Order is not applicable to the Company.

vi. The Central Government has not prescribed the maintenance of cost records under Section 148 of the Act for any of the services rendered by the Company.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is generally regular in depositing undisputed statutory dues in respect of provident fund, employees state insurance, income tax, goods and services tax, labour welfare fund and other statutory dues applicable to it with the appropriate authorities.

According to the information and explanations given to us and on the basis of our examination of the records of the Company, no undisputed amounts are payable in respect of Goods and Service Tax, Provident Fund, Employees State Insurance, Income-Tax, Duty of Customs or Cess or other statutory dues were in arrears as at 31st March 2025 for a period of more than six months from the date they became payable except for:

Name of the statue	Nature of the dues	Amount (Rs in Lacs)	Period to which the amount relates	Due date	Date of payment
Income Tax Act, 1961	Statutory dues- TDS Payable	20.90	FY 2021-22	Various dates	Unpaid and expenses disallowed under the Act- Nil Demand order passed by TDS Officer.
Income Tax Act, 1961	Statutory dues- TDS Payable	9.85	FY 2022-23	Various dates	Unpaid and expenses disallowed under the Act- Nil Demand order passed by TDS Officer.
Income Tax Act, 1961	Statutory dues- TDS Payable	13.80	FY 2023-24	Various dates	Unpaid and expenses disallowed under the Act.
Income Tax Act, 1961	Statutory dues- TDS Payable	17.63	FY 2024-25	Various dates	Unpaid
Employee State insurance (ESIC), Act, 1948	ESIC	0.82	FY 2024-25	Various dates	Unpaid

The reporting of statutory dues outstanding for a period exceeding six months from the date they became payable has been made based on the review of the books of account, relevant schedules, and information and explanations provided by the management. In accordance with Clause 3(vii)(b) of CARO 2020, the auditor is required to report the extent of undisputed statutory dues payable which have remained outstanding as at the balance sheet date for more than six months from the date they became payable.

In respect of Tax Deducted at Source (TDS), only those liabilities have been reported which:

i) have been actually deducted by the company, and

ii) remained unpaid to the credit of the Central Government for a period of more than six months from the date they became payable.

As per management representations, it is clarified that no reporting has been made in respect of TDS not deducted, as such amounts do not constitute “statutory dues payable” until such time an order is passed by the relevant authority creating a demand under the Income-tax Act, 1961. Further, in many such instances, no provision or liability has been recognized in the books, making the amount of TDS not deducted not ascertainable or quantifiable. Hence, the reporting is limited to dues for which a statutory obligation to deposit exists, based on actual deductions made and liabilities recorded.

Further, the summary does not include Goods and Services Tax (GST) on contract assets (work-in-progress) as on 31st March 2025. As per the managements assessment, GST liability on such contract assets shall arise only at the time of invoicing, and accordingly, no GST has been accrued on the same as of the balance sheet date.

(b) According to the information and explanations given to us, statutory dues relating to Goods and Service Tax, Provident Fund, Employees State Insurance, Income Tax, Duty of Customs or Cess or other statutory dues which have not been deposited on account of any dispute as at 31st March 2025 are as follows:

Name of the Statue	Nature of the Dues	Amount (in Lakh)	Amount paid under protest (in lakhs)	Period	Forum where dispute is pending
The Finance Act,1994	Service Tax	625.79	44.65	2007-2008, to 2014-15	Customs, Excise and Service Tax Appellate Tribunal.
The Finance Act,1994	Service Tax	763.61	57.27	April 2015- March 2016	Customs, Excise and Service Tax Appellate Tribunal.
Employee State insurance (ESIC), Act, 1948	ESIC	15.07	3.76	April 2018- March 2019	Appellate Authority - Regional Office, Mumbai
Goods and Service Tax Act, 2017	Goods and Service Tax	8.39		2018-19	Deputy Commissioner of State Tax (Appellate Authority)
Goods and Service Tax Act, 2017	Goods and Service Tax	45.52	2.61	2019-20	Deputy Commissioner of State Tax (Appellate Authority)
Goods and Service Tax Act, 2017	Goods and Service Tax	29.46	1.88	2020-21	Deputy Commissioner of State Tax (Appellate Authority)
Goods and Service Tax Act, 2017	Goods and Service Tax	61.41	0.41	2021-22	Deputy Commissioner of State Tax (Appellate Authority)
Goods and Service Tax Act, 2017	Goods and Service Tax	34.69	2.71	2022-23	Deputy Commissioner of State Tax (Appellate Authority)
Income Tax Act,1961	Income Tax	488.83		2022-23	Commissioner of Income Tax (Appeals)

viii. There were no transactions relating to previously unrecorded income that were surrendered or disclosed as income in the tax assessments under the Income Tax Act, 1961 during the year.

ix. (a) In our opinion and according to the information and explanations given to us and on the basis of our examination, the Company has not defaulted in repayment of loans or other borrowings to financial institutions, banks, government and dues to debenture holders or in the payment of interest thereon to any lender.

(b) According to the information and explanations given to us and on the basis of our audit procedures, we report that the Company has not been declared willful defaulter by any bank or financial institution or government or any government authority or any other lender.

(c) In our opinion and according to the information and explanations given to us, the Company has utilized the money obtained by way of term loans during the year for the purposes for which they were obtained.

(d) According to the information and explanations given to us, and the procedures performed by us, and on an overall examination of the financial statements of the Company, we report that no funds raised on short term basis have been used for long-term purposes by the Company.

(e) According to the information and explanations given to us and on an overall examination of the financial statements of the Company, we report that the Company has not taken any funds from any entity or person on account of or to meet the obligations of its subsidiaries, associates or joint ventures.

(f) According to the information and explanations given to us and procedures performed by us, we report that the Company has not raised loans during the year on the pledge of securities held in its subsidiaries, joint ventures or associate companies

x. (a) The Company did not raise money by way of initial public offer or further public offer (including debt instruments) during the year.

(b) According to the information and explanations given to us and based on our examination of the records of the Company, the Company has made preferential allotment of equity shares and convertible warrants during the year. Out of the total warrants issued, 7,54,141 warrants have been converted into equity shares during the year. The said allotments have been made in compliance with the provisions of Sections 42 and 62 of the Companies Act, 2013. Further, the funds so raised have, prima facie, been applied for the purposes for which they were raised.

xi (a) Based on examination of the books and records of the Company and according to the information and explanations given to us, considering the principles of materiality outlined in Standards on Auditing, we report that no fraud by the Company or on the Company has been noticed or reported during the course of the audit.

(b) In our opinion and according to the information and explanations given to us, no report under sub-section (12) of section 143 of the Act has been filed by the auditors in Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules, 2014 with the Central Government and up to the date of this report.

(c) As represented to us by the management, there are no whistle blower complaints received by the Company during the year.

xii (a) In our opinion and according to the information and explanations given to us, the Company is not a Nidhi company. Accordingly, paragraph 3(xii) of the Order is not applicable to the Company.

xiii. According to the information and explanation given to us and based on our examination of the records of the Company, all transactions with the related parties are in compliance with Section 177 and 188 of the Act, where applicable, and details of such transaction have been disclosed in the standalone financial statements as required by the applicable Indian Accounting Standards.

xiv (a) In our opinion and based on our examination, the Company has an internal audit system commensurate with the size and nature of its business.

(b) We have considered the internal audit reports of the Company issued till date, for the period under audit.

xv In our opinion during the year the Company has not entered into any non-cash transactions with its directors or persons connected with its directors and hence provisions of section 192 of the Companies Act, 2013 are not applicable to the Company.

xvi According to the information and explanations 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. Accordingly, paragraph 3(xvi)(a), (b) and (c) of the Order is not applicable to the Company.

According to the information and explanations given to us, the Group does not have any Core Investment Company (CIC) as part of the Group as per the definition of Group contained in the Core Investment Companies (Reserve Bank) Directions, 2016 and hence the reporting under clause (xvi)(d) of the Order is not applicable.

xvii. The Company has not incurred any cash losses in the current financial year and the immediately preceding financial year.

xviii. The previous statutory auditors have resigned during the year. As per the information and explanations provided to us, no issues, objections, or concerns were raised by the outgoing auditors. Accordingly, we have considered the same in forming our opinion.

xix. According to the information and explanations given to us and on the basis of the financial ratios, ageing and expected dates of realization of financial assets and payment of financial liabilities, other information accompanying the financial statements, our knowledge of the Board of Directors and management plans and based on our examination of the evidence supporting the assumptions, nothing has come to our attention, which causes us to believe that any material uncertainty exists as on the date of the audit report that the Company is not capable of meeting its liabilities existing at the date of balance sheet as and when they fall due within a period of one year from the balance sheet date. We, however, state that this is not an assurance as to the future viability of the Company. We further state that our reporting is based on the facts up to the date of the audit report and we neither give any guarantee nor any assurance that all liabilities falling due within a period of one year from the balance sheet date, will get discharged by the Company as and when they fall due.

xx. The provisions for Corporate Social responsibility are not applicable to the company. Accordingly, reporting under clause (xx) of the order is not applicable for the year.

xxi. The reporting under Clause (xxi) of the Order is not applicable in respect of audit of standalone financial statements. Accordingly, no comment in respect of the said clause has been included in this report.

“ANNEXURE B” TO ^DEPENDENT AUDITORS REPORT

(Referred to in paragraph 2A (g) under “Report on Other Legal and Regulatory Requirements “ section of our report to the members of KHFM Hospitality and Facility Management Services Limited of even date)

Report on the Internal Financial Controls with reference to Standalone Financial Statements under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)

Opinion

We have audited the internal financial controls over financial reporting of KHFM Hospitality and Facility Management Services Limited (the “Company”) as of 31st March, 2025 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

In our opinion, the Company has, in all material aspects, adequate internal financial controls with reference to financial statements and such internal financial controls with reference to Standalone financial statements were operating effectively as at 31st March 2025, with the exception of the matters referred in the “emphasis of matter” section of the independent auditors report; 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 Reporting issued by the Institute of Chartered Accountants of India.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls based on the internal control with reference to financial statements 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 (TCAF). 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 with reference to financial statement 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 Act, 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 with reference to financial statements 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 with reference financial statements, 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 judgment, including the assessment of the risks of material misstatement of the standalone 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 with reference to financial statements.

Meaning of Internal Financial Controls with Reference to Financial Statements

A companys internal financial control with reference to financial statements 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 with reference to financial statements 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 authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized 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 with reference to financial statements, 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 with reference to financial statements to future periods are subject to the risk that the internal financial control with reference to financial statements may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

For YRKDAJ and Associates LLP

Chartered Accountants

Firm Registration No.: W100288

Rohit Teli

Partner

Membership No. 155581

UDIN : 25155581BMIHXP2979

Place: Mumbai

Date: 18th June, 2025