8K MILES Auditors Report

To


The Members of


M/s. 8K Miles Software Services Limited


REPORT ON THE FINANCIAL STATEMENTS


We have audited the accompanying Standalone Financial Statements of M/s. 8K miles Software Services limited ("the company"), Chennai - 600 018, which comprise the Balance Sheet as at 31st March, 2016, the Statement of Profit and Loss and the Cash Flow Statement for the year ended and a summary of significant accounting policies and other explanatory information.


MANAGEMENT''''S RESPONSIBILITY FOR THE STANDALONE FINANCIAL STATEMENTS


The Company''''s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation and presentation of these Standalone Financial Statements 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 provisions of the Act for safeguarding the assets of the group and for preventing and detecting frauds and other irregularities; the selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the 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 Financial Statements that give a true and fair view and free from material misstatement, whether due to fraud or error.


auditors'''' responsibility


Our responsibility is to express an opinion on these Standalone Financial Statements based on our audit.


We have taken into account the relevant 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 plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.


An audit includes performing procedures to obtain audit evidence about the amounts and disclosures in the Financial Statements. The procedures selected depend on the auditor''''s 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 Company''''s preparation and fair presentation of the Financial Statements 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 accounting estimates made by the Company''''s 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.


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 Companies Act, 2013, in the manner so required and give a true and fair view in conformity with the Accounting Principles generally accepted in India:


(i) i n the case of the Balance Sheet, of the state of affairs of the Company as at March 31, 2016


(ii) In the case of the Statement of Profit and Loss of the PROFIT for the year ended on March 31, 2016 and


(iii) In the case of the Cash Flow Statement of the Cash Flows for the year ended on March 31, 2016.


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 of the act, we give in the " Annexure A" a statement on the matters specified in paragraph 3 and 4 of the order, to the extent applicable.


2. As required by the 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 purpose of our audit;


b) In our opinion, proper books of accounts as required by law have been kept by the company so far it 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 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; and


e) on the basis of written representations received from the directors as at 31st March, 2016 and taken on record by the Board of Directors, we report that none of the directors of the Company is disqualified as on 31st March, 2016, from being appointed as a director in terms of Section 164 (2) of the Act.


f) 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".


g) With respect to other matters to be included in the Auditor''''s 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 explanation given to us:


i) The Company does not have any pending litigation which would impact its financial position.


ii) The Company did not have any long term contracts including derivative contracts for which there were any material foreseeable losses under the applicable law or accounting standard.


iii) There were no amounts, which were required to be transferred, to the Investor Education and Protection Fund by the Company.


The Annexure referred to in our Independent Auditors''''


“ANNEXURE A” TO THE INDEPENDENT AUDITORS’ REPORT


Report to the Members of M/s. 8K Miles Software


Services Limited ("the Company") on the Standalone Financial Statements for the year ended march 31, 2016. We report that:


i) a) The company has maintained proper records showing full particulars, including quantitative details and situation of fixed assets.


b) The Fixed Assets have been physically verified, by the management, at reasonable intervals and no material discrepancies were noticed on such verification between the books of account and physical fixed assets.


c) The company does not hold any immovable property.


ii) The company is a service providing company, primarily rendering software services. Accordingly it does not hold any physical inventories. Thus, paragraph 3(ii) of the order is not applicable to the company.


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 Ac! accordingly, the provisions of the clause 3 (iii) (a) to (c) of the order are not applicable to the company and hence not commented upon.


iv) I n our opinion and according to the information and explanations given to us, the Company has compiled with the provisions of Section 185 and 186 of the companies Act, 2013 in respect of loans, investments, guarantees and securities.


v) The company has not accepted any deposit from public and hence the directives issued by the Reserve Bank of India and the provisions of Sections 73 to 76 or any other relevant provisions of the Act and the companies (Acceptance of Deposit) Rules, 2015 with regard to the deposits accepted from the public are not applicable.


vi) The central Government has not prescribed the maintenance of cost records under Section 148(1) of the Act, for any of the services rendered by the company.


vii) a) According to the information and explanations given to us and in the basis of our examination of the books of account, the Company has been generally regular in depositing undisputed statutory dues including Provident Fund, Employees State Insurance, Income-Tax, Sales Tax, Service Tax, Duty of Customs, Duty of Excise, Value Added Tax, Cess and any other statutory dues with the appropriate authorities. According to the information and explanations given to us, no undisputed amounts payable in respect of the above were in arrears as at March 31, 2016 for a period of more than six months from the date on when they become payable.


b) According to information and explanations given to us, there are no dues of income tax, sales tax, service tax, duty of customs, duty of excise, value added tax outstanding on account of any dispute.


viii) I n our opinion and according to the information and explanations given to us, the Company has not defaulted in the repayment of dues to banks. The Company has not taken any loan either from financial institutions or from the government and has not issued any debentures.


ix) Based upon the audit procedures performed and the information and explanations given by the management, the company has not raised moneys by way of initial public offer or further public offer including debt instruments and term loans. Accordingly, the provisions of clause 3 (ix) of the Order are not applicable to the company and hence not commented upon.


x) Based upon the audit procedures performed and the information and explanations given by the management, we report that no fraud by the Company or on the Company by its officers or employees has been noticed or reported during the year.


xi) Based upon the audit procedures performed and the information and explanations given by the management, no managerial remuneration has been paid or provided in accordance with the requisite approvals mandated by the provisions of Section 197 read with Schedule V to the Companies Act. Hence the clause (xi) of the Order is not applicable.


xii) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of clause 4 (xii) of the Order are not applicable to the Company.


xiii) In our opinion, all transactions with the related parties are in compliance with Section 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable Accounting Standards.


xiv) Based upon the audit procedures performed and the information and explanations given by the management, during the year, the Company has made preferential allotment of equity shares on conversion of warrants issued during 2014-15 pursuant to the provision of Section 62 (1) (c) of Companies Act, 2013 and in accordance with the enabling provision of Memorandum and Articles of Association of the Company, Securities and Exchange Board of India (issue of Capital and Disclosure Requirements) Regulations, 2009 ("SEBI ICDR Regulations").


The Company has not made any private placement of shares or fully or partly convertible debentures during the year under review. Accordingly, the provisions of clause 3 (xiv) of the order are not applicable to the Company and hence not commented upon.


xv) Based upon the audit procedures performed and the information and explanations given by the management, the Company has not entered into any non-cash transactions with directors or persons connected with him. Accordingly, the provisions of clause 3 (xv) of the Order are not applicable to the Company and hence not commented upon.


xvi) In our opinion, the Company is not required to be registered under Section 45 IA of the Reserve Bank of India Act, 1934 and accordingly, the provisions of clause 3 (xvi) of the Order are not applicable to the Company and hence not commented upon.


“annexure B”


To the independent Auditor''''s Report of even date on the Standalone Financial Statements of 8K Miles Software Services limited


Report on the Internal Financial Controls under Clause (i) of sub-section 3 of section 143 of the Companies Act, 2013 (“the Act”)


We have audited the internal financial controls over financial reporting of "8K MILES SOFTWARE SERVICES LIMITED" ("the Company") as of March 31, 2016 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.


MANAGEMENT''''S RESPONSIBILITY FOR INTERNAL FINANCIAL CONTROLS


The Company''''s 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 (‘ICAI''''). 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 Company''''s 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 Company''''s 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 auditor''''s judgment, 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 Company''''s internal financial controls system over financial reporting.


MEANING OF INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING


A Company''''s 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 Company''''s 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 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 Company''''s 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, 2016, 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 GHG Associates Chartered Accountants Firm''''s Registration No: 008703S



S. Haresh


Place: Chennai Partner


Date: 9th May 2016 Membership No. 205204

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