SECUREKLOUD TECHNOLOGIES LIMITED — Annual Report 2019

Nov 2, 2019

Ref: 8K/CHN/2019-20/E046 2 nd November 2019

The General Manager,
Listing Department,
National Stock Exchange Limited,
Exchange Plaza, C-1, Block G,
Bandra Kurla Complex, Bandra (E),
Mumbai 400 051
EQ-8KMILES –ISIN NO-INE650K01021

Dear Sir/Madam,

Sub: Outcome of Board Meeting held on November 2, 2019 -Disclosure pursuant to Regulation 30 (as specified in Part A of Schedule III) of SEBI Listing Obligation and Disclosure Requirements, 2015

We hereby submit the outcome of the meeting of Board of Directors of the Company held today (November 02, 2019) at the Registered Office of the Company at Srinivas Towers, No.5, Cenotaph Road, II Floor, Teynampet, Chennai-600018. The Meeting commenced at 03.30 PM and concluded at 11:50 PM.

The Board of directors have approved the following :-

1. The Audited Standalone and Consolidated Financial Results for the quarter and year ended March 31, 2019.

Pursuant to Regulation 33 of SEBI Listing Obligation and Disclosure Requirements, 2015, we hereby submit the Audited Standalone and Consolidated Financial Results along with the Audit Report from the statutory auditors of the company as approved at the audit committee meeting held on November 02, 2019.

2. Resignation of Director:

We inform you that Mr. R. S. Ramani (DIN: 03206751) and Mr. Gurumurthi Jayaraman (DIN: 00416850) has submitted their resignation from the office of Director of the Company.

The Board has taken note of their resignation.

We are attaching the below documents to be submitted within 30 minutes of closure of the meeting as required under SEBI(LODR) Regulation, 2015. We would also upload the same in NSE NEAPS and BSE listing Centre:

• 1. The Audited Standalone and Consolidated Financial Results for the quarter and year ended March 31, 2019.
• 1. Audit Report from Statutory Auditors M/s. Deloitte Haskins and Sells LLP.
• 1. Management response for the qualification of the Auditors.

Please take a note of the above at your end.

Thanking You,

Yours Truly,

For 8K Miles Software Services Limited

Diya Venkatesan Company Secretary

	Registered Office: Second Floor, Srinivas Towers, No. 5, Cenotaph Road, Teynampet, Chennai - 600 018	8K MILES SOFTWARE SERVICES LIMITED(CIN: L72300TN1993PLC101852)
	STATEMENT OF STANDALONE FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2019
						(Amount in INR in lakhs except EPS)
			Quarter Ended		Year to Date
S.No.	Particulars	31 March 2019	31 December 2018	31 March 2018	31 March 2019	31 March 2018
		(Refer Note 2 andົດ	(Unaudited)	(Refer Note 5)	(Refer Note 2)	(Audited)
H	Income
	b) Other income (including foreign exchange gain / (loss) - Refer Note 8)a) Revenue from operations	3.281,320.81	(226.76)1,264.33	1,627.85119.90	686.985,694.44	359.845,056.52
	Total income	1,324.09	1,037.57	1,747.75	6,381.42	5,416.36
N	Expenses
	a) Employee benefits expense	464.22	394.39	435.41	1,732.87	1,452.95
	b) Finance costs	249.25	215.66	245.42	969.66	755.42
	c) Depreciation and amortization expense	7.67380.77	463.369.20	10.74717.39	34.052,281.79	2,402.6583.87
	d) Other expensesTotal expenses	1,101.91	1,082.61	1,408.96	5,018.37	4,694.89
	Profit / (Loss) before exceptional items and tax (1-2)	222.18	(45.04)	338.79	1,363.05	721.47
w 4	Exceptional items
w	Profit / (Loss) before tax (3-4)	222.18	(45.04)	338.79	1,363.05	721.47
6	Tax expense
	- Current tax (including prior period)- Deferred tax	33.1035.56	(16.84)5.68	(4, 51)132.71	219.90169.92	244.05
	Net profit / (loss) for the period (5-6)	153.52	(33.88)	210.59	973.23	(10.42)487.84
78	Other comprehensive income / (loss)
	LossItems that will not be reclassified to the statement of profit and(a) Actuarial gain / (loss) on defined benefit obligation	(4.60)	4.78	16.62	9.74	14.95
	to the statement of profit or loss(b) Income tax relating to items that will not be reclassified	1.37	(1.40)	(4.58)	(2.81)	(4.12)
	Total other comprehensive income / (loss) (Net of tax)	(3.23)	3.38	12.04	6.93	10.83
۰	Total comprehensive income / (loss) for the period (7+8)	150.29	(30.50)	222.63	980.16	498.67
$\overline{10}$	Paid-up equity share capital (Face value of Rs. 5/- each)	1,525.88	1,525.88	1,525.88	1,525.88	1,525.88
	Reserves (Other Equity)				7,274.55	6,294.39
$\mathbf{1}$	Earnings per equity share (EPS) [Face value of Rs. 5/- each)
	(a) Basic EPS	0.500.50	(0.11)	0.69	3.19	1.60
	(b) Diluted EPS	[not annualised]	(0.11)[not annualised]	0.69[not annualised]	3.19[Annualised]	1.60[Annualised]

8K MILES SOFTWARESERVICES LIMITED (CIN:· L72300TN1993PLC101852) Registered Office: Second Floor, Sriniyas Towers, No.5, Cenotaph Road, Teynampet, Chennai - 600 018

1. STANDALONE BALANCESHEETAS ON 31 MARCH 2019

			Amount in INR in lakhs}
		As at	As at
	Particulars	31 March 2019	31 March 2018
		(Refer Note 2)	(Audited)
A	ASSETS
1	Non-current assets(a) Property. plant and equipment
	(b) Capital work-in-progress	61.65-	83.2510.60
	(c) Financial assets
	(i) Investments	12.000.09	9.352.04
	(ii) Loans	46.51	2.618.37
	(d) Deferred tax assets (Net)	60.89	233.62
	(e) Other non-currentassetsTotal non-current assets	2.6012171.74	169.00
			12466.88
2	Current assets
	(a) Financial assets
	(i) Trade receivables	6.835.01	3.679.84
	(ii) Cash and cash equivalents(iii) Bank balances other than (ii) above	85.20-	14.37
	(Iv) Other financial assets	489.18	76.00248.06
	(b) Other current assets	30.13	116.92
	Total current assets	7439.52	4135.19
	Total Assets (1+2)
		19611.26	16602.07
B	EOUITY AND LIABILITIES
3	EQuity
	(a) Eauitv share caoital(b) Other eouttv	1.525.887 274.55	1.525.88
	Total ecultv	8800.43	6294.397820.27
4	Non-current liabilities
	(a) Financial liabilities(i) Borrowinas
	(b) Provisions	5.476.2765.46	5.007.1563.10
	(c) Other non-currentliabilities	4.39	10.61
	Total non-current liabilities	5546.12	5080.86
5	Current liabilities(a) Financial liabilities
	(i) Borrowlnas	1.804.40	1.198.60
	(ii) Trade oavables
	(a) Total outstandinadues of micro enterorisesand small enterorises	2.92	-
	(b) Total outstandingdues of creditors other than micro enterprisesand	1,964.05	948.02
	smrlU p.ntp.rnrisp.s(iii) Other financial liabilities	1.174.28	1.269.33
	(b) Other current liabilities	:!-19.06	125.07
	( c) Provisions	57.86	32.17
	(d) Current tax liabilities (Net)	142.14	12775
	Total current liabilities	5,264.71	3,700.94
	Total EQuity and Liabilities (3+4+5)	19611.26	16602.07

				Audit Committee, approved and taken on record by the Board of Directors in their meeting held on 2 November 2019. The auditors have issued a		The figures for the quarters ended 31 March 2019 and 31 March 3018 are the balancing figures between the figures for the year ended 31 March 2019 and 31 March 2018 and the unaudited year to date figures for the nine monthsEffective 01 April 2018, the Company has adopted Ind AS 115 'Revenue from Contracts with Customers'. The application of Ind AS 115 did not have any material impact on the financial results of the Company.		The Board has appointed Mr. Raghunathan Aravamuthan as additional director (independent director category) of the Company effective from 06 September 2019 in its board meeting dated 06 September 2019.				For and on behalf of the Board of DirectorsBy Order of the Board	ww .	Suresh VenkatachariManaging DirectorDIN No. 00365522
	Registered Office: Second Floor, Srinivas Towers, No. 5, Cenotaph Road, Teynampet, Chennai - 600 018	STANDALONE FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2019		2019. Also refer Statement on Impact of Audit Qualifications being filed with BSE and NSE.					(Amount in INR in lakhs)	31 March 2018Year Ended	31.68			Chief Financial OfficerSwasti Bhowmick
8K MILES SOFTWARE SERVICES LIMITED	(CIN: L72300TN1993PLC101852)									31 March 2019Year Ended	420.08
										31 March 2018Quarter Ended	40.70
		STATEMENT OF								31 December 2018Quarter Ended	(309.21)
										31 March 2019Quarter Ended	(24.65)
			otes:	disclaimer of opinion in respect of standalone results for the year ended 31 MarchThe above statement of standalone financial results have been reviewed by the	The Company operates in a single segment, i.e., "Information And Technology Services" and hence, does not have any additional disclosures to be made under Ind AS 108 - Operating Segments.	4	The Board has appointed Ms. Diya Venkatesan as the Company Secretary of the Company effective from 10 April 2019 in its board meeting dated 10 April 2019.ended 31 December 2018 and 31 December 2017, respectively.		Statement of standalone financial results includes foreign exchange gain / (loss) as given below:	Particulars	(loss)gain /Foreign exchange(a) Other Incomeincluded under:			Date: 2 November 2019Place: Chennai

Chartered Accountants ASV N Ramana Tower 52. Venkatnarayana Road T. Nagar Chennai . 600 017 Tamil Nadu. India

Tel: +91 44 6688 5000 Fax: +91 44 6688 5050

INDEPENDENT AUDITOR'S REPORT TO THE BOARD OF DIRECTORS OF 8K MILES SOFTWARE SERVICES LIMITED

• 1. We were engaged to audit the accompanying Statement of Standalone Financial Results of 8K MILES SOFTWARE SERVICES LIMITED ("the Company"), for the year ended 31 March 2019 ("the Statement"), being submitted by the Company pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as modified by Circular No. CIR/CFD/FAC/62/2016 dated 5 July 2016.
• 1. This Statement, which is the responsibility of the Company's management and approved by the Board of Directors, has been compiled from the related standalone Ind AS financial statements which has been prepared in accordance with the Indian Accounting Standards prescribed under Section 133 of the Companies Act, 2013 ("the Act") read with relevant rules issued thereunder (Tnd AS') and other accounting principles generally accepted in India.
• 1. Our responsibility is to conduct an audit of the Statement in accordance with Standards on Auditing specified under section 143(10) of the Act and to issue an auditor's report. However, because of the matters described in Paragraphs 4 to 11 below, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the Statement.
• 1. Report under Section 143 (12) of the Act

During the course of our audit of the standalone and consolidated financial statements of the Company for the year ended 31 March 2019 we came across certain transactions that gave us reason to believe that suspected offences involving fraud have been committed in the Company. Such transactions with regard to the standalone financial statements, inter alia, pertained to:

• (a) Several instances of inconsistencies between declarations provided by Directors and information available in the public forum which demonstrated existence of probable related parties which were not disclosed previously, including certain transactions with such parties which were not disclosed or approved by the Audit Committee/Board of Directors. Also see paragraph a.l(a) below.
• (b) Several instances of transactions with certain customers, wherein the Company was not able to provide us with the particulars of the services rendered and acknowledged by the customer, the details of employees actually rendering such service, the appropriateness and source of the monies received from such customers. Also see paragraph 5 below.
• (c) Several instances of multiple addresses being considered in various communications with certain customers in the invoices, website of the customer, on cheques received from customers, including instances wherein some of the communication addresses coincided with the residential address of certain employees of the Company or its subsidiaries, which impacted our ability to establish the authenticity of the customer. Also see paragraph 5 below.

• (d) Several instances of communications with a vendor, wherein there were multiple communications using different email ids, documents with varying signatures and differences in the spelling of the common signatory of the vendor, etc. which impacted our ability to establish the authenticity of the vendor. Also see paragraph 7 below.
• (e) Appropriate approvals and concerns over recovery of advances made to a related party, by a subsidiary of the Company. Refer paragraph 6 for more details.

Several instances of various inconsistencies were also noted during our audit of the books of account of certain foreign subsidiaries in association with our audit of the consolidated financial statements of the Company.

Pursuant, inter alia, to the above observations, we requested the Audit Committee of the Company to provide us with their replies or observations to the aforesaid matters for us to consider the same as part of our audit.

Subsequent to our reporting of such matters to the Audit Committee vide our letter dated 15 July 2019, the Audit Committee in its meeting held on 18 July 2019 appointed an external firm of Chartered Accountants to carry out an investigation. We are informed that as on the date of this report, the investigation report of the external firm of Chartered Accountants has not yet been received by the Company and, hence, the same has not been made available to us.

Further, we also included the aforesaid matters in our report dated 13 September 2019 to the Central Government in accordance with the requirements of section 143(12) of the Act. The matters so reported also included observations relating to certain transactions pertaining to some subsidiaries, which are included in our report on the consolidated financial statements of the Company.

Pending receipt of the report on the findings of such investigation and pending receipt of information and explanations and evidences relating to the aforesaid matters from the management of the Company, we have been unable to obtain sufficient and appropriate audit evidence in respect of the above matters/ transactions that gave us reason to believe that suspected offences involving fraud may have been committed in the Company and/or its subsidiaries.

In view of the above, we are unable to comment on the consequential adjustments, if any, that may be required to the Statement.

5. Revenue from Contracts with Customers and related outstanding receivables

During the year ended 31 March 2019 the Company recognised revenue aggregating to Rs. 2,428.69 Lakhs from the customers referred to in paragraphs 4(b) and 4(c) above wherein such customers have an outstanding balance aggregating Rs. 3,464.01 Lakhs as at 31 March 2019 (includes balances of Rs. 1,022.36 Lakhs outstanding even as at 31 March 2018).

In the absence of complete information regarding the proof of services rendered, efforts expended, and in view of our observations in paragraphs 4(b) and 4(c) above in respect of these customers, we are unable to conclude on the appropriateness / correctness / completeness / validity of the revenue recognised, compliance with the recognition and measurement of revenue required under the Indian Accounting Standard (Ind AS) 115 Revenue from Contracts with Customers and the corresponding receivables in the Statement.

The Company has also not carried out an evaluation of the expected credit loss required under Indian Accounting Standard (Ind AS) 109 - Financial Instruments for the outstanding trade receivables as at 31 March 2019 and therefore we are unable to comment on the adequacy and appropriateness of the provision made against the trade receivable balances as at 31 March 2019.

6. SK Miles Media Private Limited

6.1 Around the last week of September 201S, we were made aware of the resignation of the statutory auditor of SK Miles Media, a company promoted by the promoter directors of the Company, vide their resignation letter dated 30 April 201S. As per the said letter, the resignation was due to the misuse of that Audit Firm's Letter Head and signature of their Partner through forgery in certain ODI Certificates submitted by SK Miles Media to its bankers for transfer of funds of USD 71.51 Lakhs (Rs. 4,612.91 Lakhs) to SK Miles Media Holdings Inc. USA, a subsidiary of SK Miles Media. SK Miles Media and its subsidiaries (together \SK Miles Media Group") were identified as a related party in the consolidated financial statements of the Company for the year ended 31 March 201S.

During the period ended 31 December 201S, the management of SK Miles Media initiated an independent forensic review to evaluate the authenticity of the signatures in the ODI Certificates referred above. SK Miles Media has submitted a copy of the forensic report to the Company. We understand that the aforesaid forensic report states that the writer of the signature in the ODI certificates is the same as that of the specimen signatures of the audit partner as provided to the forensic auditor thereby concluding that there was no forgery in the 001 certificates.

Since this matter relates to a company where another firm is the statutory auditor and since the financial statements of that company are not included in the consolidated financial statements of the Company, we have not been able to perform any procedures related to the allegation or the forensic report.

• 6.2 Further, during the last week of September 201S,
  • (a) the CEO and Managing Director of the Company, who was also a promoter director in SK Miles Media, resigned as a director in SK Miles Media.
  • (b) the CFO and Executive Director of the Company, who was the other promoter director in SK Miles Media, resigned from his role as CFO of the Company stating that his resignation was to have the necessary time to clear all the baseless allegations and unsubstantiated allegations relating to SK Miles Media. However, he continues to be a director in both the Company as well as SK Miles Media.

6.3 The Company has trade and other receivables aggregating Rs. 3,309.10 Lakhs as at 31 March 2019 receivable from 8K Miles Software Services Inc., a subsidiary. It may be noted that this subsidiary had loans receivable from entities of 8K Miles Media Group in the USA aggregating USD 89.61 Lakhs (Rs. 5,808.44 Lakhs) as at 31 March 2018.

We are informed by the management of the Company that such amounts due, including interest as accrued, have been fully recovered as at 31 March 2019 by that subsidiary. However, in the absence of appropriate workings for the interest, documentation regarding loan agreements and due to inconsistencies noted between the transactions as per the Bank Statements of the subsidiary with the transactions as recorded in the books of account of the subsidiary, we were unable to confirm the management's assertion on the said collections made by the subsidiary.

• 6.4 We are unable to conclude if the above events in 8K Miles Media have any effect on:
  • (a) the Company and its operations, in view of the allegations in the aforesaid resignation letter of the statutory auditor of that company and the nature of the Company's relationship with 8K Miles Media, as described in paragraphs 6.1 and 6.2 above, respectively;
  • (b) the ability of the Company's subsidiary to transfer funds back to the Company, in view of the loans receivable by it from the entities of 8K Miles Media Group in the USA as described in paragraph 6.3 above, which could result in a possible impairment in the investment of Rs. 9,816.65 Lakhs held in that subsidiary, trade receivables of Rs. 2,819.92 Lakhs and interest recoverable of Rs. 489.18 Lakhs from such subsidiary; and
  • (c) the consequential impact, if any, of the same on the operations of the Company.

7. Procurement of services and trade payables

7.1 Based on the master service agreement with the external service provider, referred to in paragraph 4(d) above, for technical and referral services to be rendered towards certain customers, referred to in paragraphs 4(b) and 4(c) above, the Company has recorded consultancy charges of Rs. 1,706.40 Lakhs, for the year ended 31 March 2019 with an outstanding liability of Rs. 1,709.16 Lakhs.

In the absence of complete information regarding proof of the services rendered by the vendor, and in view of our observations in paragraph 4(d) above in respect of this vendor, we are unable to conclude on the appropriateness / correctness / completeness / validity of the expense and the corresponding liability recorded in the Statement.

7.2 Further, the Company has not evaluated the applicability or coverage of such services under the Goods and Service Tax Regulations and has not accrued / paid the same. However, in our opinion, such tax is payable on those services. The management has not determined the amount of Goods and Service Tax payable and any interest thereon. We are unable to conclude on the consequential impact of the same on the Statement.

• 1. Regulatory compliances
  • 8.1 We are unable to conclude on the consequential impact, if any, on the operations and the financial performance of the Company arising out of the following matters pertaining to non-compliance with the provisions of the Companies Act, 2013 and notifications issued by the Securities and Exchange Board of India (SEBI), as applicable:
    • (a) In the absence of appropriate processes for identifying related parties in view of the matters reported in paragraph 4 (a) above, we are unable to comment on the accuracy and completeness of the related parties identified and disclosed by the Company including compliance with obtaining necessary approvals, as required, from those charged with governance.
    • (b) It was noted that in the case of two of the Directors who were re-appointed at the Annual General Meeting (AGM) held on 18 September 2015 and designated as independent directors (One was also the Chairman of the Audit Committee and the other a member of the Nomination and Remuneration Committee and also the Chairman of the Stakeholder Relationship Committee), they may have ceased to be independent directors under the Act with effect from 17 November 2015 and 12 August 2015, respectively, being the date from when their relatives were employed either with the Company or its subsidiary. These directors have been designated as nonindependent directors by the Company from 6 September 2019 and 13 February 2019, respectively.

Considering the above, we are unable to opine on the validity of the meetings of the Board of Directors, Audit Committee, Stakeholder Relationship Committee and Nomination and Remuneration Committee, in regards to the quorum in such meetings and the resolutions approved in those meetings from the aforesaid AGM date until the dates when the Company designated them as non-independent directors.

• 8.2 We are unable to conclude on the consequential impact, if any, on the Statement arising out of the matters pertaining to non-compliance with the applicable master directions/ notifications issued by the Reserve Bank of India ("RBI") and provisions of The Foreign Exchange Management Act, 1999, as amended, in respect of the following:
  • (a) The Company has export trade receivables and foreign currency interest receivable aggregating Rs. 3,037.28 Lakhs and Rs. 336.13 Lakhs, respectively, which are outstanding for more than nine months, from the invoice date, as at 31 March 2019, which is beyond the time limit stipulated under the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015, for repatriation of foreign currency receivables.

(b) As at 31 March 2019, the Company had not made the necessary intimations to the Authorised Dealer/ RBI as required under the Master Directions provided by the RBI on Foreign Investment in India for loan/ collaterals/ pledge received from the promoter of the Company, being a resident outside India, amounting to Rs. 1,395.02 Lakhs during the year ended 31 March 2019.

However, subsequent to the year-end, the Company has made an intimation to the Authorised dealer on 12 July 2019 and is yet to make an application for condonation of delay.

(c) It appears that the Company has provided a corporate guarantee to Columbia Bank for a line of credit availed by 8K Miles Software Services Inc., a subsidiary of the Company, and Nexage Technologies Inc., a step down subsidiary of the Company, aggregating USD 5,000,000 on 12 September 2018. As per the loan sanction document issued by Columbia Bank, the line of credit was approved by Columbia Bank based on a representation by the Managing Director of the Company that the corporate guarantee was approved by the shareholders of the Company.

We have not been provided with minutes of the meeting of the shareholders referred above approving such corporate guarantee. Further, the Company has also not intimated the Authorised Dealer for providing such corporate guarantee as required under the Master Directions provided by the RBI on Direct Investment by Residents in Joint Venture (JV) / Wholly Owned Subsidiary (WaS) Abroad.

• 8.3 Further, the Company has not carried out a comprehensive review of compliance with laws and regulations and therefore we are unable to comment if there are any other instances of non-compliance with laws and regulations and any consequential impact thereof.
• 1. Information I clarifications requested but not provided

During the course of our audit, we have requested from the management various information and clarifications that were required for the purposes of our audit. In addition to the information and clarifications pending in respect of the matters described in paragraphs 4 to 8 above, information, inter alia, relating to assessment of how the revenue recognised by the Company was in compliance with the provisions of Ind AS 115, documentation supporting evaluation of the expected credit losses as at 31 March 2019, documentation on services received against certain consultancy expenses, confirmation of balances from customers, vendors and other parties, etc., are also pending to be provided to / received by us. In view of such pending information, we have not been able to obtain sufficient appropriate evidence to conclude on those matters to express an opinion on the Statement.

1. Book entries

In view of the matters described in paragraphs 4, 5, 6.3, 7 and 9 above, we are unable to state if any of the transactions referred to in those paragraphs were represented by mere book entries.

11. Use of going concern assumption

12. Information on subsidiaries

Based on information in the public domain 8K Miles Cloud Solutions Pte. Limited, Singapore has stated itself to be a subsidiary of the Company. This entity appears to have been incorporated on 8 May 2017. Further, 8K Miles Software Services Pte. Ltd, Singapore and 8K Miles Software Services UK Limited, United Kingdom exist with the promoter directors appearing as shareholders/directors. The incorporation of wholly owned subsidiaries in these countries were approved by the Board of Directors of the Company on 30 May 2018.

However, all these three entities have not been considered by the management of the Company as subsidiaries in the standalone financial statements. We are informed by the management that these entities are not subsidiaries of the Company and the information in the public domain, including with the regulatory authorities in those geographies are not correct.

We have not been provided with the audited financial statements of these entities and/or any other verifiable evidence to ascertain the relationship of these entities with the Company. Hence, we are unable to comment on the relationship of these entities and the consequential impact these entities may have on the Statement.

• 1. Because of the significance of the matters described in paragraphs 4 to 12 above, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion as to whether the Statement:
  • (i) is presented in accordance with the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as modified by Circular No. CIR/CFD/FAC/62/2016 dated 5 July 2016; and
  • (ii) gives a true and fair view in conformity with the aforesaid Indian Accounting Standards and other accounting principles generally accepted in India of the net profit and Total comprehensive income and other financial information of the Company for the year ended 31 March 2019.
• 1. The Statement includes the results for the Quarter ended 31 March 2019 being the balancing figure between figures in respect of the full financial year and the previously published year to date figures up to the third quarter of the current financial year.

For Deloitte Haskins & Sells LLP

Chartered Accountants (Firm's Registration No. 117366W/W-100018)

V. Balaji Partner (Membership No. 203685)

2 November 2019 VB/JT/RB/2019 Unique Identification Number:

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8K MILES SOFTWARE SERVICES LIMITED (CIN: L72300TN1993PLC101852) Registered Office: Second Floor, Srinivas Towers, No.5, Cenotaph Road, Teynampet, Chennai - 600 018 STATEMENT OF CONSOLIDATED FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2019 (Amount in INR in Iakhs except EPS) Year to Date S.No. Particulars 31 March 2019 31 March 2018 (Refer Note 2) (Audited) 1 Income a) Revenue from operations 84,219.15 84,923.87 b) Other income 819.42 845.23 Total income 85,038.57 85,769.10 2 Expenses a) Employee benefits expense 29,052.51 23,557.56 b) Finance costs 1,162.49 971.49 c) Depreciation and amortization expense 6,959.83 2,518.68 d) Other expenses 38,220.86 32,124.52 Total expenses 75,395.69 59,172.25 3 Profit before exceptional items and tax (1-2) 9,642.88 26,596.85 4 Exceptional items - - 5 Profit before tax (3-4) 9,642.88 26,596.85 6 Tax expense - Current tax 1,300.58 5,910.31 - Deferred tax 359.81 145.23 7 Net profit after tax for the period (5-6) 7,982.49 20,541.31 8 Other comprehensive income I (loss) Items that will not be reclassified to the statement of profit and Loss (a) Remeasurement of the defined benefit plans 9.74 14.95 (b) Income tax relating to items that will not be reclassified to the statement of profit or loss (2.81) (4.12) Total other comprehensive income / (loss) (Net of tax) 6.93 10.83 9 Total comprehensive Income for the period (7+8) 7,989.42 20,552.14 10 Profit attributable to: Owners of the company 6,871.77 17,161.62 Non-controlling Interest 1,110.72 3,379.69 11 Other comnrehensive income attributable to: Owners of the company 6.93 10.83 Non·controlling Interest 12 Total comDrehensive income attributable to: Owners of the company 6,878.70 17,172.45 Non·controlling Interest 1,110.72 3,379.69 13 Paid·up equity share capital (Face value of Rs. 51· each) 1,525.88 1,525.88 Reserves (Other Equity) - excluding any revaluation reserve 57,706.55 47,583.61 14 Earnings per equity share (EPS) [Face value of Rs. 5/- each] (a) Basic EPS(Rs.) 22.52 56.24 (b) Diluted EPS(Rs.) 22.52 56.24

8K MILES SOFTWARE SERVICES LIMITED (CIN: L72300TN1993PLC101852)

Registered Office: Second Floor, Srlnlvas Towers, No.5, Cenotaph Road,Teynampet, Chennal - 600 018

1. CONSOLIDATED BALANCESHEET AS ON 31 MARCH 2019

			(Amount in INR in lakhs)
		As at	As at
	Particulars	31 March 2019	31 March 2018
		(Refer Note 2)	(Audited)
A	ASSETS
1	Non-current assets
	(a) Property. plant and equipment	899.23	1.249.05
	(b) Capital work-in-proqress(c) Goodwill	-12.827.16	10.6011.994.47
	(d) Other intangible assets	49.972.95	22.590.02
	(e) Intanqibte assets under development	-	2.795.68
	(f) Financial assets
	(i) Loans	81.19	171.42
	(9) Other non-currentassetsTotal non-currentassets	4508.4068288.93	4 382.2743193.51
2	Current assets
	(a) Financial assets
	(i) Trade receivables(ii) Cash and cash equivalents	23.768.30	25.252.35
	(iii) Bank balances other than (ii) above	815.45-	1.023.1376.00
	(iv) Loans	1.84	6.518.41
	(v) Other financial assets	1.704.89	3.306.36
	(b) Current Tax Assets (Net)	3.155.17	-
	(c) Other current assets	2065.38	2.516.5138692.76
	Total current assets	31511.03
	Total Assets (1+2)	99799.96	81886.27
B	EOUITY AND LIABILITIES
3	EQuitv
	(a) Equity share capital	1,525.88	1,525.88
	(b) Other equity	57,706.55	47,583.61
	Equity attributableto owners of the company	59,232.43	49,109.49
	Non-controlling interest	17301.01	14723.63
	Total equity	76533.44	63833.12
4	Non-current liabilities
	(a) Financial liabilities		5.007.15
	(i) Borrowinas(b) Provisions	5.476.2765.46	63.10
	(c) Deferred tax liabilities	671.02	308.40
	(d) Other non-currentliabilities	4.39	10.61
	Total non-current liabilities	6217.14	5389.26
5	Current liabilities(al Financial liabilities
	(i) Borrowings	5,299.65	2,592.27
	(ii) Trade payables
	(a) Total outstanding dues of micro enterprises and small enterprises	2.92	-
	(b) Total outstanding dues of creditors other than micro enterprises and	8,318.66	4,136.41
	small enterprises
	(iii) Other financial liabilities	2,253.84	3,412.47
	(bl Other current liabilities	974.31	750.35
	(c) Provisions	57.86	32.17
	(d) Current tax liabilities (Net)	142.1417,049.38	1 740.2212,663.89
	Total current liabilities
	Total EQuitv and liabilities (3+4+5)	99799.96	81886.27

For and on behalf of the Board of DirectorsThe Company had availed the exemption provided in the SEBI circular dated 5 July 2016 with regard to isdosure of the consolidated financial health can be above consolidated financial results has been presented on an annual2 The above statement of consolidated financial results have been reviewed by the Audit Committee, approved and taken on the bard of Directors in their meeting held on 2 November 2013. The auditors have issued a disclaimer$\overline{\mathcal{S}}$By Order of the BoardSuresh VenkatachariManaging DirectorDIN No. 003655224 The Company operates in a single segment, i.e., "Information And Technology Services" and hence, does not have any additional disclosures to be made under Ind AS 108 - Operating Segments.Registered Office: Second Floor, Srinivas Towers, No. 5, Cenotaph Road, Teynampet, Chennai - 600 018NOW WHYChief Financial OfficerSwasti Bhowmick8K MILES SOFTWARE SERVICES LIMITED(CIN: L72300TN1993PLC101852)consolidated results for the year ended 31 March 2019. Also refer Statement on Impact of Audit Qualifications being filed with BSE and NSE.Date: 2 November 2019Place: Chennaim
Notes:

Chartered Accountants ASV N Ramana Tower 52, Venkatnarayana Road T. Nagar Chennai- 600017 Tamil Nadu, India

Tel: +91 44 6688 5000 Fax: +91 44 6688 5050

INDEPENDENT AUDITORS' REPORT TO THE BOARD OF DIRECTORS OF 8K MILES SOFTWARE SERVICES LIMITED

• 1. We were engaged to audit the accompanying Statement of Consolidated Financial Results of 8K MILES SOFTWARE SERVICES LIMITED ("the Parent"/"the Holding Company"/"the Company") and its subsidiaries (Refer paragraph 16 below, for the subsidiaries that are considered in these consolidated financial results), (the Parent and its subsidiaries together referred to as "the Group") for the year ended 31 March 2019 ("the Statement"), being submitted by the Parent pursuant to the requirement of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as modified by Circular No. CIR/CFD/FAC/62/2016 dated 5 July 2016.
• 1. This Statement, which is the responsibility of the Parent's management and approved by the Board of Directors, has been compiled from the related consolidated financial statements which has been prepared in accordance with the Indian Accounting Standards prescribed under Section 133 of the Companies Act, 2013 ("the Act"), read with relevant rules issued thereunder ("Ind AS") and other accounting principles generally accepted in India.
• 1. Our responsibility is to conduct an audit of the Statement in accordance with Standards on Auditing specified under section 143(10) of the Act and to issue an auditor's report. However, because of the matters described in Paragraphs 4 to 15 below, we were not able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion on the Statement.

4. Report under Section 143 (12) of the Act

During the course of our audit of the Statement for the year ended 31 March 2019 we came across certain transactions that gave us reason to believe that suspected offences involving fraud have been committed in the Group. Such transactions with regard to the Statement, inter alia, pertained to:

• (a) Several instances of inconsistencies between the initial bank statements and the subsequent bank statements provided for verification in certain subsidiaries. Also see paragraphs 6.3 and 7 below.

• (b) Several instances of inconsistencies between declarations provided by Directors and information available in the public forum which demonstrated existence of probable related parties which were not disclosed previously, including certain transactions with such parties which were not disclosed or approved by the Audit Committee/Board of Directors. Also see paragraphs 6.3 and 12.1(a) below.

• (c) Several instances of transactions with certain customers, wherein the Company was not able to provide us with the particulars of the services rendered and acknowledged by the customer, the details of employees actually rendering such service, the appropriateness and source of the monies received from such customers. Also see paragraph 7 below.

• (d) Several inconsistencies with the names of the parties / customers mentioned in the bank statements of some of the subsidiaries and the books of account maintained by those subsidiaries. Also see paragraph 4(a) above and paragraphs 6.3 and 7 below.

• (e) Several instances of multiple addresses being considered in various communications with certain customers in the invoices, website of the customer, on cheques received from customers, including instances wherein some of the communication addresses coincided with the residential address of certain employees of the Company or its subsldlanes, which impacted our ability to establish the authenticity of the customer. Also see paragraph 7 below.

• (f) Several instances of communications with a vendor, wherein there were multiple communications using different email ids, documents with varying signatures and differences in the spelling of the common signatory of the vendor, etc. which impacted our ability to establish the authenticity of the vendor. Also see paragraph 8.1 below.

• (g) Several instances of transactions with vendors, wherein there were inconsistencies between the nature of services as mentioned in the invoices and the basis of recording in the books of account as consultancy expenses and intangible assets, multiple federal tax identification against the same vendor, contracts signed by employees post cessation of their employment, etc. Also see paragraph 8.2 below.

• (h) Appropriate approvals and concerns over recovery of advances made to a related party, by the Group. Also see paragraph 6 below.

Pursuant, inter alia, to the above observations, we requested the Audit Committee of the Company to provide us with their replies or observations to the aforesaid matters for us to consider the same as part of our audit.

Subsequent to our reporting of such matters to the Audit Committee vide our letter dated 15 July 2019, the Audit Committee in its meeting held on 18 July 2019 appointed an external firm of Chartered Accountants to carry out an investigation. We are informed that as on the date of this report, the investigation report of the external firm of Chartered Accountants has not yet been received by the Company and, hence, the same has not been made available to us.

Further, we also included the aforesaid matters in our report dated 13 September 2019 to the Central Government in accordance with the requirements of section 143(12) of the Act.

In view of the above, we are unable to comment on the consequential adjustments, if any, that may be required to the Statement in this regard.

5. Access to books of account of a subsidiary and information on subsidiaries

5.1. Our terms of engagement for the audit of the Statement included the management's responsibility to provide us access, at all times, to the records of all the subsidiaries of the Company in so far as it relates to the consolidation of its financial statements as envisaged in the Act.

However, the Company did not provide us the access to the records and books of account of 8K Miles Software Services FZE, a wholly owned subsidiary of the Company, which represents total assets of Rs. 11,635.68 Lakhs as at 31 March 2019, total revenues of Rs. 7,560.23 Lakhs, profit after tax of Rs. 789.65 Lakhs and net cash outflows amounting to Rs. 96 Lakhs for the year ended on that date, as considered in the Statement.

These balances have been included, in the Statement, by the management based on financial statements of the subsidiary, prepared in accordance with the International Financial Reporting Standards (IFRS), wherein the auditor of the subsidiary has issued an unmodified report.

We were unable to obtain sufficient appropriate audit evidence about the state of affairs of the subsidiary as at 31 March 2019 and the results of its operations for the year then ended, in the absence of access to the records and books of account of the subsidiary.

5.2. Based on information in the public domain 8K Miles Cloud Solutions Pte. Limited, Singapore has stated itself to be a subsidiary of the Holding Company. This entity appears to have been incorporated on 8 May 2017. Further, 8K Miles Software Services Pte. Ltd, Singapore and 8K Miles Software Services UK Limited, United Kingdom exist with the promoter directors appearing as shareholders/directors. The incorporation of wholly owned subsidiaries in these countries were approved by the Board of Directors of the Holding Company on 30 May 2018.

However, all these three entities have not been considered by the management of the Holding Company as subsidiaries in the preparation of the consolidated financial statements. We are informed by the management that these entities are not subsidiaries of the Holding Company and the information in the public domain, including with the regulatory authorities in those geographies are not correct.

We have not been provided with the audited financial statements of these entities and/or any other verifiable evidence to ascertain the relationship of these entities with the Holding Company. Hence, we are unable to comment on the relationship of these entities and the impact the financial statements of these entities may have on the Statement.

6. 8K Miles Media Private Limited C'8K Miles Media")

6.1. Around the last week of September 2018, we were made aware of the resignation of the statutory auditor of 8K Miles Media, a company promoted by the promoter directors of the Company, vide their resignation letter dated 30 April 2018. As per the said letter, the resignation was due to the misuse of that Audit Firm's Letter Head and signature of their Partner through forgery in certain ODI Certificates submitted by 8K Miles Media to its bankers for transfer of funds of USD 71.51 Lakhs (Rs. 4,612.91 Lakhs) to 8K Miles Media Holdings Inc. USA, a subsidiary of 8K Miles Media. 8K Miles Media and its subsidiaries (together \8K Miles Media Group") were identified as a related party in the consolidated financial statements of the Company for the year ended 31 March 2018.

During the period ended 31 December 2018, the management of 8K Miles Media initiated an independent forensic review to evaluate the authenticity of the signatures in the 001 Certificates referred above. 8K Miles Media has submitted a copy of the forensic report to the Company. We understand that the aforesaid forensic report states that the writer of the signature in the 001 certificates is the same as that of the specimen signatures of the audit partner as provided to the forensic auditor thereby concluding that there was no forgery in the 001 certificates.

Since this matter relates to a company where another firm is the statutory auditor and since the financial statements of that company are not included in the consolidated financial statements of the Company, we have not been able to perform any procedures related to the allegation or the forensic report.

• 6.2. Further, during the last week of September 2018,
  • (a) the CEO and Managing Director of the Company, who was also a promoter director in 8K Miles Media, resigned as a director in 8K Miles Media.
  • (b) the CFO and Executive Director of the Company, who was the other promoter director in 8K Miles Media, resigned from his role as CFO of the Company stating that his resignation was to have the necessary time to clear all the baseless allegations and unsubstantiated allegations relating to 8K Miles Media. However, he continues to be a director in both the Company as well as 8K Miles Media.
• 6.3. The Company has trade and other receivables aggregating Rs. 3,309.10 Lakhs as at 31 March 2019 receivable from 8K Miles Software Services Inc., a subsidiary. It may be noted that this subsidiary had loans receivable from entities of 8K Miles Media Group in the USA aggregating USD 89.61 Lakhs (Rs. 5,808.44 Lakhs) as at 31 March 2018.

We are informed by the management of the Holding Company that such amounts due, including interest as accrued, have been fully recovered as at 31 March 2019 by that subsidiary. However, in the absence of appropriate workings for the interest, documentation regarding loan agreements and due to inconsistencies noted between the transactions as per the Bank Statements of the subsidiary with the transactions as recorded in the books of account of the subsidiary, as mentioned in paragraphs 4(a) and 4(d) above, we were unable to confirm the management's assertion on the said collections made by the subsidiary.

• 6.4. We are unable to conclude if the above events in 8K Miles Media have any effect on:
  • (a) the Group and its operations, in view of the allegations in the aforesaid resignation letter of the statutory auditor of that company and the nature of the Group's relationship with 8K Miles Media, as described in paragraphs 6.1 and 6.2 above, respectively;
  • (b) the status of the Group's receivable from such related party, as described in paragraph 6.3 above; and
  • (c) the consequential impact, if any, of the same on the operations of the Group.

7. Revenue from Contracts with Customers and related outstanding receivables

During the year ended 31 March 2019 the Group initially recognised revenue aggregating to Rs. 54,789 Lakhs (including Rs. 2,428.69 Lakhs relating to the Company) from the customers referred to in paragraphs 4(c), 4(d) and 4(e) above.

The management has, subsequently, based on our report under section 143(12) of the Act reversed and derecognised revenue aggregating to Rs. 16,940.66 Lakhs (including Rs. Nil relating to the Company) and the consequent receivables. Accordingly, the net revenues recognised from these customers during the year aggregated to Rs. 37,848.34 Lakhs and the outstanding receivables as at 31 March 2019 is Rs. 9,382.13 Lakhs (includes balances of Rs. 1,022.36 Lakhs outstanding even as at 31 March 2018).

In the absence of complete information regarding the proof of services rendered, efforts expended, basis of revenue recognition and reversaljderecognition, and in view of our observations in paragraphs 4(c), 4(d) and 4(e) above in respect of these customers, and inconsistencies in the bank statements referred in paragraph 4(a) above, we are unable to conclude on the appropriateness j correctness j completeness j validity of the net revenue recognised, compliance with the recognition and measurement of revenue required under the Indian Accounting Standard (Ind AS) 115 - Revenue from Contracts with Customers and the corresponding receivables in the Statement.

The Group has also not carried out an evaluation of the expected credit loss required under Indian Accounting Standard (Ind AS) 109 - Financial Instruments (Ind AS 109) for __ -..........outstanding trade receivables as at 31 March 2019 and therefore we are unable to ~-c€lmtRent on the adequacy and appropriateness of the provision made against the trade Ie balances as at 31 March 2019.

8. Procurement of services and trade payables

8.1. Based on the master service agreement with the external service provider, referred to in paragraph 4(f) above, for technical and referral services to be rendered towards certain customers, referred to in paragraphs 4(c) and 4(e) above, the Company has recorded consultancy charges of Rs. 1,706.40 Lakhs, for the year ended 31 March 2019 with an outstanding liability of Rs. 1,709.16 Lakhs.

In the absence of complete information regarding proof of the services being rendered by the vendor, and in view of our observations in paragraph 4(f) above in respect of this vendor, we are unable to conclude on the appropriateness / correctness / completeness / validity of the expense and the corresponding liability recorded in the Statement.

Further, the Company has not evaluated the applicability or coverage of such services under the Goods and Service Tax Regulations and has not accrued / paid the same. However, in our opinion, such tax is payable on those services. The management has not determined the amount of Goods and Service Tax payable and any interest thereon. We are unable to conclude on the consequential impact of the same on the Statement.

8.2. Based on the invoices received from certain vendors, referred to in paragraph 4(g) above, the Group has for the year ended 31 March 2019 recorded consultancy charges aggregating Rs. 26,689.45 Lakhs, intangible assets/assets under development of Rs. 22,267.29 Lakhs, with an outstanding liability of Rs. 2,224.43 Lakhs as at that date.

In the absence of complete information regarding nature of the services being rendered, the customers for whom these services were rendered and the nature of intangible assets being developed, and in view of our observations in paragraph 4(g) above in respect of these vendors, we are unable to conclude on the appropriateness / correctness / completeness / validity of the expense, the intangible asset/asset under development and the corresponding liability/payment recorded in the Statement.

9. Income Taxes

The Group has recorded tax expenses (net) of Rs. 1,270.57 Lakhs during the year ended 31 March 2019, and has a net tax asset as at that date of Rs. 3,155.17 Lakhs and a net deferred tax liability of Rs. 731.91 Lakhs relating to certain of its foreign subsidiaries.

We have not been provided with the tax returns filed with regard to its foreign subsidiaries, reconciliation of the balances considered in the tax returns so filed with the audited financial statements of the subsidiaries, the tax position and status of assessments of such subsidiaries, a roll forward to the deferred tax position as at 31 March 2019 from 31 March 2018 and the workings for the tax provision for the

We are accordingly unable to conclude on the carrying amounts of tax assets and liabilities, including deferred tax balances, as at 31 March 2019, as considered in the Statement. Further, in the absence of the tax returns we have also not been able to validate if the profits of these subsidiaries considered in the tax returns and as per the books of account provided to us were the same.

10. Intangible asset capitalisation and evaluation of impairment, including for goodwill

10.1. The Group has during the year capitalised costs towards internally generated intangible assets and internally generated intangible assets under development amounting to Rs. 32,393.80 Lakhs (also refer paragraphs 4(g) and 8.2 above).

In the absence of appropriate documentation as to the nature of these intangible assets, data to demonstrate the appropriateness of the timing to commence capitalization of costs associated with such intangible assets as well as the basis to demonstrate the costs capitalised in fact were associated with the intangibles being developed, we are unable comment on the carrying value of such intangible assets as at 31 March 2019.

10.2. The Group has goodwill and acquired intangibles (net of amortisation) of Rs. 62,800.11 Lakhs as at 31 March 2019.

The management has not provided us with their assessment of any impairment to the carrying value of such goodwill and other intangible assets. Accordingly, we are unable to comment on the appropriateness of the carrying value and the recoverability of such goodwill and other intangible assets as at 31 March 2019.

1. Business Combinations

The Group had in the previous year ended 31 March 2018 completed certain acquisitions or had paid advances towards proposed acquisitions, wherein we noted that:

11.1. During the previous year ended 31 March 2018, the Group had recorded an amount of USD 3,304,557 (INR 2,142.01 Lakhs) as contingent consideration due to the erstwhile owners of Cornerstone Advisors Group LLC ("Cornerstone") payable upon satisfaction of conditions as specified in the acquisition agreement. During the current year an amount USD 1,747,198 (INR 1,218.85 Lakhs) has been paid by the Group to the erstwhile members of Cornerstone. In the absence of details with respect to satisfaction of conditions as specified in the acquisition agreement, we are unable to comment on the amount of contingent consideration that has been paid during the year and the carrying amount of USD 1,557,359 (Rs. 1,079.56 Lakhs), as the liability towards contingent consideration as at 31 March 2019. Further, such consideration has not been fair valued as required under Ind AS 109.

11.2. An advance of USD 6,500,000 was paid by one of the subsidiaries of the Company, during the previous year ended 31 March 2018, consequent to a Share Purchase agreement entered into with a Seller and a Corporation for acquiring the entire outstanding shares of the Corporation. In accordance with the said agreement, in the event the closing of acquisition doesn't occur within 15 months (i.e. before February 2019) from the date of agreement, Seller will retain Five Hundred Thousand US Dollars ($500,000) as penalty and balance Six Million US Dollars ($6,000,000) shall be refunded to the Group within 5 calendar days.

As at 31 March 2019 the acquisition as planned was not completed and the management of the Company has represented that the term of the Share Purchase agreement has been extended. In the absence of a supporting convincing evidence and our inability to send direct confirmation request to the Seller and the Corporation on the revision of the terms including waiver of the penalty, due to not receiving the communication address to which the confirmation requests were to be sent, we are unable to comment on the recoverability of the amount of Rs. 4,505.80 Lakhs (equivalent to USD 6,500,000) included under Note 9 as "advances towards acquisition", as at 31 March 2019 and the consequential impact, if any, on the Statement.

12. Regulatory compliances

• 12.1. We are unable to conclude on the consequential impact, if any, on the operations and the financial performance of the Group arising out of the following matters pertaining to non-compliance with the provisions of the Companies Act, 2013 and notifications issued by the Securities and Exchange Board of India (SEBI), as applicable:
  • (a) In the absence of appropriate processes for identifying related parties in view of the matters reported in paragraph 4(b) above, we are unable to comment on the accuracy and completeness of the related parties identified and disclosed by the Company including compliance with obtaining necessary approvals, as required, from those charged with governance.
  • (b) It was noted that in the case of two of the Directors who were re-appointed at the Annual General Meeting (AGM) held on 18 September 2015 and designated as independent directors (One was also the Chairman of the Audit Committee and the other a member of the Nomination and Remuneration Committee and also the Chairman of the Stakeholder Relationship Committee), they may have ceased to be independent directors under the Act with effect from 11 November 2015 and 12 August 2015 respectively, being the date from when their relatives were employed either with the Company or its subsidiary. These directors have been designated as non-independent directors by the Company from 6 September 2019 and 13 February 2019, respectively.

Considering the above, we are unable to opine on the validity of the meetings of the Board of Directors, Audit Committee, Stakeholder Relationship Committee and Nomination and Remuneration Committee, in regards to the quorum in such meetings and the resolutions approved in those meetings from the aforesaid AGM date until the dates when the Company designated them as non-independent directors.

• 12.2. We are unable to conclude on the consequential impact, if any, on the Statement arising out of the matters pertaining to non-compliance by the Holding Company with the applicable master directions/ notifications issued by the Reserve Bank of India ("RBI") and provisions of The Foreign Exchange Management Act, 1999, as amended, in respect of the following:
  • (a) The Holding Company has export trade receivables and foreign currency interest receivable aggregating Rs. 3,037.28 Lakhs and Rs. 336.13 Lakhs, respectively, including intra-group receivables which amounts, as at 31 March 2019, were outstanding for more than nine months from the invoice date, which is beyond the time limit stipulated under the Foreign Exchange Management (Export of Goods & Services) Regulations, 2015, for repatriation of foreign currency receivables.
  • (b) As at 31 March 2019, the Company had not made the necessary intimations to the Authorised Dealer/ RBI as required under the Master Directions provided by the RBI on Foreign Investment in India for loan/ collaterals/ pledge received from the promoter of the Company, being a resident outside India, amounting to Rs. 1,395.02 Lakhs during the year ended 31 March 2019.

However, subsequent to the year-end, the Company has made an intimation to the Authorised dealer on 12 July 2019 and is yet to make an application for condonation of delay.

(c) It appears that the Holding Company has provided a corporate guarantee to Columbia Bank for a line of credit availed by two of the subsidiaries in the Group aggregating USD 5,000,000 on 12 September 2018. As per the loan sanction document issued by Columbia Bank, the line of credit was approved by Columbia Bank, based on a representation by the Managing Director of the Holding Company that the corporate guarantee was approved by the shareholders of the Holding Company.

We have not been provided with minutes of the meeting of the shareholders referred above approving such corporate guarantee. Further, the Company has also not intimated the Authorised Dealer for providing such corporate guarantee as required under the Master Directions provided by the RBI on Direct Investment by ReSidents in Joint Venture (JV) / Wholly Owned Subsidiary (WOS) Abroad.

12.3. Further, the Holding Company has not carried out a comprehensive review of compliance with laws and regulations and therefore we are unable to comment if there are any other instances of non-compliance with laws and regulations and any consequential impact thereof.

13. Information I clarifications requested but not provided

During the course of our audit, we have requested from the management various information and clarifications that were required for the purposes of our audit. In addition to the information and clarifications pending in respect of the matters described in paragraphs 4 to 12 above, information, inter alia, relating to assessment of how the revenue recognised by the Group was in compliance with the provisions of Ind AS 115, documentation supporting evaluation of expected credit losses as at 31 March 2019, information of payroll costs recognised in some of the subsidiaries, confirmation of balances from customers, vendors and other parties, etc., are also pending to be provided to / received by us. In view of such pending information, we have not been able to obtain sufficient appropriate evidence to conclude on those matters to express an opinion on the Statement.

14. Book Entries

In view of the matters described in paragraphs 4, 6.3, 7, 8, 10 and 13 of the Basis for Disclaimer of Opinion section of our report, we are unable to state if any of the transactions referred to in those paragraphs were represented by mere book entries.

15. Use of going concern assumption

In view of the matters reported in paragraphs 4 to 14 above, and in the absence of reliable cash flow projections by the management, and any consequential impact of those matters on the Statement and operations of the Group, we are unable to comment on the appropriateness of the going concern assumption adopted by the management in the preparation of the Statement.

16. The Statement, includes the results of the following entities:

• (i) 8K Miles Software Services Limited ("the Parent")
• (ii) 8K Miles Software Services Inc. USA, the Subsidiary
• (iii) 8K Miles Health Cloud Inc. USA, the Wholly Owned Subsidiary
• (iv) 8K Miles Software Services FZE UAE, the Wholly Owned Subsidiary
• (v) Mentor Minds Solutions & Services Inc. USA, the Wholly Owned Subsidiary
• (vi) Nexage Technologies USA Inc., the Step down Subsidiary
• (vii) Cornerstone Advisors Group LLC, the Step down Subsidiary
• (viii) Serj Solutions Inc. USA, the Step down Subsidiary

• 1. Because of the significance of the matters described in paragraphs 4 to 15 above, we have not been able to obtain sufficient appropriate audit evidence to provide a basis for an audit opinion as to whether the Statement:
  • a. is presented in accordance with the requirements of Regulation 33 of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, as modified by Circular No. CIRjCFDjFACj62j2016 dated 5 July 2016; and
  • b. gives a true and fair view in conformity with the aforesaid Indian Accounting Standards and other accounting principles generally accepted in India of the net profit, Total comprehensive income and other financial information of the Group for the year ended 31 March 2019.

For Deloitte Haskins & Sells LLP Chartered Accountants

(Firm's Registration No. 117366WjW-100018)

v. Balaji Partner (Membership No. 203685)

2 November 2019 VBjJTjRBj2019 Unique Identification Number:

I q2.0 3b"8S" AP14iIi e,!= C:,~ 3 0

The Board has deliberated about the financial statements and the report of the statutory auditors. The response for qualification of the Auditors opinion has been provided below:

Management'sResponse on the Auditor's	Opinion for Standalone AuditedFinancial Statementsfor the Financial Year ended March 31. 2019
Auditor'sObservation:	Management'sResponse
Item 1
(a) SeveralinstancesofinconsistenciesbetweendeclarationsprovidedbyDirectorsandinformationavailableinthepublicforumwhichdemonstratedexistenceofprobablerelatedpartieswhichwerenotdisclosedpreviously,includingcertaintransactionswithsuchpartieswhichwerenotdisclosedorapprovedbytheAuditCommittee/Board of Directors.Also see paragraphS.l(a) below.	The Directors have provided the appropriatedocumentsas requiredunderthelawandbelieves to their knowledge there is no relatedparties which were undisclosed.
(b) Severalinstancesoftransactionswithcertain customers, wherein the Companywasnotabletoprovideus withtheparticularsof the services renderedandacknowledgedbythecustomer,thedetailsof employees actuallyrendering. suchservice'; theappropriatenessandsource of the monies received from suchcustomers. Also see paragraph 2 below.	TheManagementherebyaffirmsthatthepropertimesheets andnatureofservicesrendered were submittedto the audit teamduringtheauditalongwiththeacknowledgementreceivedfromsuchcustomers. Also, the confirmation of balanceswerereceived fromthecustomers and theCompany has requested such customers for thepayment schedule to support the recoverabilityof the amounts from them.
(c) Several instancesofmultipleaddressesbeingconsideredinvariouscommunicationswithcertaincustomersin the invoices, website of the customer,onchequesreceivedfromcustomers,including instances whereinsome of thecommunicationaddresses coincided withtheresidentialaddressofcertainemployeesoftheCompanyoritssubsidiaries, whichimpactedour abilitytoestablishtheauthenticityofthecustomer. Also see paragraph 2 below.	TheManagementherebystates thatcertaincustomershavemultiplelocationsandtheservices were provided at various locations. TheManagement has duly darified to the audit teamabout the addressesof the employees who werepreviously the employees of our customers.
(d) Several instances of communicationswitha vendor,whereinthereweremultiplecommunicationsusingdifferentemailids, documentswithvaryingsignaturesanddifferencesinthespellingofthecommonsignatoryof thevendor,etc.whichimpactedourabilityto establishthe authenticityof the vendor. Also see	TheManagementhasgivennecessaryexplanationsto audit team during the audit fortheemail addresses used by thevendor.TheManagementaffirmsthattheauthenticityofthatvendorhas been establishedby obtainingdirectconfirmationfromthatvendorwithrespect to services provided.The Managementalso of the opinionthatusage of multipleemailaddresses is the preference of the vendor.

#5, Cenotaph Road, II Floor, Srinivas Towers, Teynampet, Chennai _ 600 018 © +91 44 66028000 ei!h91 44 43009049 ~contactus@8kmilessoftwareservices.com CIN No. L72300TN1993PLC101852 www.8kmiles.com

paragraphs 3.3 and 4 below.
(e) Appropriateapprovals and concerns overrecovery of advances made to a relatedparty,by a subsidiaryof theCompany.Refer paragraph 3 for more details.(f)Severalinstancesofvarious	The managementconfirmsthatadvances toarelated party has been fully recovered during theyear of audit and there is NO outstandingat theend of31stMarch2019 as per thebooks ofaccount.Themanagementstatesthatthesubsidiary
inconsistencieswerealsonotedduringourauditofthebooksofaccountofcertain foreign subsidiaries in associationwithourauditoftheconsolidatedfinancial statements of the Company.	accounts have been audited by the auditor in thedomicile of subsidiary and not reported any suchinconsistencies.
Item 2Revenue fromContractswithCustomersandrelated outstanding receivablesDuringtheyearended31March2019theCompanyrecognisedrevenueaggregatingtoRs.2,428.69 Lakhs fromthecustomersreferredtoin paragraphsl(b)andl(c)above whereinsuchcustomershaveanoutstandingbalanceaggregatingRs.3,464.01 Lakhs as at 31 March2019(includesbalancesofRs.1,022.36Lakhsoutstanding even as at 31 March 2018).Intheabsenceofcompleteinformationregarding the proof of services rendered, effortsexpended,and in viewof ourobservationsinparagraphsl(b)andl(c)aboveinrespectofthese customers, we are unable to conclude ontheappropriateness/correctness/completeness/validityoftherevenuerecognised, compliance with the recognitionandmeasurementofrevenuerequiredundertheIndianAccountingStandard(IndAS)115Revenue from Contracts with Customers and thecorrespondingreceivablesinthesestandalonefinancial statements.TheCompanyhasalsonotcarriedoutanevaluationof the expectedcreditloss requiredunder Indian Accounting Standard (Ind AS) 109 -Financial Instrumentsfor the outstandingtradereceivables as at 31 March 2019 and thereforewe are unable to comment on the adequacy andappropriatenessof theprovisionmade againstthetradereceivablebalances as at 31 March2019.	TheCompanyhasobtainedthenecessarybalance confirmationfromthe customersas attheendoftheyearandtheCompanyhasrequestedsuchcustomersforthepaymentscheduletosupporttherecoverabilityoftheamounts from those customers. As the amountsaregoodtorecover,anevaluationoftheexpectedcreditloss as requiredunderIndianAccountingStandard(IndAS) 109 -FinancialInstrumentsfortheoutstandingtradereceivables does not arise.Asexplainedl(b)above,theManagementhereby affirms thatthe propertimesheets andnatureof services renderedwere submittedtothe audit team during the audit along withtheacknowledgementreceivedfromsuchcustomers.Also, theconfirmationof balanceswerereceivedfromthecustomersandtheCompany has requestedsuch customers for thepaymentschedule to supportthe recoverabilityof the amounts from them.
Item No.3: 8K Miles Media Private limited3.1Around the last week of September 2018,	The management states that the forensic experts

	we were made aware of theresignationofthestatutoryauditorofSK MilesMedia,acompanypromotedbythepromoterdirectorsof the Company, videtheirresignationletterdated 30 30 April201S.Asperthesaidletter,theresignation was due to the misuse of thatAudit Firm's Letter Head and signature oftheirPartnerthroughforgeryin certain001Certificatessubmittedby SK MilesMedia to its bankers for transfer of fundsof USD 71.51 Lakhs (Rs. 4,612.91 Lakhs)to SK Miles MediaHoldings Inc. USA, asubsidiaryof SK MilesMedia.SK MilesMediaand its subsidiaries (together"SKMiles Media Group") were identifiedas arelated party in the consolidated financialstatementsof the Company for the yearended 31 March 201S. During the periodended31December201S,themanagementof SK Miles Media initiatedan . independentforensicreviewtoevaluatetheauthenticityofthesignatures in the 001 Certificates referredabove. SK Miles Mediahas submittedacopyoftheforensicreporttotheCompany.Weunderstandthattheaforesaid forensicreportstates thatthewriterofthesignatureinthe001certificatesis thesame as thatofthespecimen signatures of the audit partnerasprovidedtotheforensicauditortherebyconcludingthattherewasnoforgeryin the 001 certificates.Since thismatterrelatestoacompanywhereanotherfirm is the statutoryauditorandsincethefinancialstatementsofthatcompanyarenotincludedintheconsolidatedfinancialstatementsof theCompany,wehavenotbeenabletoperformany proceduresrelatedtotheallegation or the forensic report.	appointedby the SK Miles Media Private LimitedhavesubmittedtheirreporttotheBoardwhereintheyhaveconcludedthatalltheallegationsmadeon SK MilesMediaarenottrue.TheBoardherebyhas dulytakenthatreportintorecord.Themanagementfurtherclarifies thereis no relationshipnexus betweenSK Miles Media and the Company, except for thecommonpromoter.Thus,thereisnorequirementof providing financial statementsofSK Miles Media to the auditors.
3.2	Further,duringthelastweekof	The ManagementaffirmsthatSK MilesMedia
	September 201S,	has no nexus except for the common promoters.Hence the false and baseless allegations have no
a)	theCEO andManagingDirectorof the	impact on the Company and its operations.
	Company,whowasalsoapromoterdirectorin SK Miles Media, resigned as a	The Trade receivables from SK Software Services

directorin 8K Miles Media.b)theCFO andExecutiveDirectoroftheCompany, whowas the otherpromoterdirectorin 8K Miles Media, resigned fromhis role as CFO of theCompany statingthathisresignationwastohavethenecessary timeto clear all thebaselessallegationsandunsubstantiatedallegationsrelatingto8K MilesMedia.However, he continues to be a directorinboththeCompany as wellas 8K MilesMedia.r------------------------------------13.3TheCompanyhastradeandotherreceivables aggregating Rs.3,309.10 Lakhsas at 31 March 2019 receivable from8KMiles Software Services Inc., a subsidiary.It may be noted that this subsidiary hadloans receivable from entities of 8K MilesMedia Group in the USA aggregating USD89.61 Lakhs (Rs.5,808.44 Lakhs) as at 31March 2018.We are informedby the managementof theCompany thatsuch amountsdue,includinginterest as accrued, have been fully recoveredasat31March2019bythatsubsidiary.However,intheabsenceofappropriateworkingsfortheinterest,documentationregardingloanagreementsandduetoinconsistenciesnotedbetweenthetransactionsas per theBank Statementsofthesubsidiarywiththetransactionsasrecordedinthebooksofaccountofthesubsidiary,wewereunabletoconfirmthemanagement'sassertiononthesaidcollections made by the subsidiary.

lnc., a subsidiary is an ongoing account and havesince receivedRs.858.48 Lakhs tilldateof thisreport.Withrespect to loans receivable from8K MilesMediaGroupinUSA-thetotalamountincluding the interestcharge on the outstandingamounts have been fully recovered and as at the31st March 2019 the balance from8K Media isNIL.AlsotheManagementaffirmsthattheappropriateworkingsfortheinterestontheamountsoutstandinghave been providedandrecovered in full.Based on the above facts and continuityof thebusiness and operationsof thesubsidiary,theManagementsbelievesthatthereisnopossibilityofimpairmentintheinvestmentsmadebytheparentcompanyandtherecoverabilityoftheamountreceivablesaregood.

3.4We are unable to conclude if the aboveevents in 8K Miles Media have any effecton:(a)the Company and its operations,in viewoftheallegationsintheaforesaidresignationletterofthestatutoryauditor of that company and the natureof the Company'srelationshipwith8KMiles Media, as described in paragraphs3.1 and 3.2 above, respectively;(b)the abilityof the Company's subsidiaryto transferfunds back to the Company,

As explainedthe companyhas received all theoutstandingamountspriortoDecember2018and theabove allegationis nothingto do withthe company as it is neither a related party nor asubsidiary.

in viewof theloans receivableby itfromtheentitiesof8K MilesMediaGroupintheUSAasdescribedinparagraph 3.3 above, which could resultinapossibleimpairmentintheinvestmentof Rs.9,816.65 Lakhs held inthatsubsidiary,tradereceivablesofRs.2,819.92LakhsandinterestrecoverableofRs. 489.18Lakhs fromsuch subsidiary; and(c)the consequentialimpact, if any, of thesameontheoperationsoftheCompany.
Item4:Procurementofservices andtradepayables4.1.Basedonthemasterserviceagreementwiththeexternalserviceprovider, referred to in paragraph l(d)above,fortechnicalandreferralservicestoberenderedtowardscertaincustomers,referredtoinparagraphs 1 (b) and l(c)above, theCompanyhasrecordedconsultancycharges of Rs.l,706.40Lakhs, for theyearended31March2019 withanoutstandingliabilityofRs.l,709.16Lakhs.Intheabsenceofcompleteinformationregardingproofoftheservices renderedby the vendor,andinviewofourobservationsinparagraph l(d)above in respect of thisvendor, we are unable to conclude ontheappropriateness/correctness/completeness / validity of the expenseandthecorrespondingliabilityrecorded in these standalone financialstatements.	The Managementhas providedthe audit team,the details withrespect to services availed fromthevendor,confirmationofthechargesandpayables.WithrespecttoGSTapplicability,theManagementis in theprocess ofobtainingaprofessional opinion and will take requisite stepsin due course.
4.2.Further,theCompanyhasnotevaluated the applicabilityor coverageof such services under the Goods andService Tax Regulationsandhas notaccrued / paid the same. However, inouropinion,such taxis payableonthoseservices. The managementhasnot determinedthe amountof GoodsandServiceTaxpayableandanyinterestthereon.Weareunabletoconclude on the consequentialimpact

ofthesameonthesestandalonefinancial statements.
Item 5: Regulatory Compliances
S.l.Weareunabletoconcludeontheconsequentialimpact,ifany, on theoperationsandthefinancialperformanceof theCompanyarisingout of the followingmatters pertainingto non-compliancewith the provisionsoftheCompaniesAct,2013andnotificationsissued by theSecuritiesand Exchange Board of India (SEBI),asapplicable:	The managementhereby states that these havebeen duly compliedas mentionedin l(a)aboveandtherelatedpartydetailshavebeenappropriatelydisclosedinthefinancialstatements.
(a) In the absence of appropriateprocesses foridentifyingrelatedpartiesin viewof thematters reportedin paragraph 1 (a) above,we are unable to comment on the accuracyandcompletenessof therelatedpartiesidentifiedand disclosedby theCompanyincludingcompliancewithobtainingnecessaryapprovals,asrequired,fromthose charged with governance.
(b) It was noted that in the case of two of theDirectorswhowerere-appointedat theAnnual General Meeting (AGM) held on 18September201Sanddesignatedasindependentdirectors(One was also theChairman of the Audit Committeeand theothera memberof theNominationandRemunerationCommitteeandalsotheChairman of the StakeholderRelationshipCommittee),theymay have ceased to beindependentdirectorsunder the Act witheffectfrom17November2015and12August 2015, respectively,being thedatefromwhen theirrelatives were employedeitherwith the Company or its subsidiary.These directorshave been designatedasnon-independentdirectorsbytheCompany from 06 September 2019 and 13February 2019, respectively.Considering the above, we are unable to opineon the validity of the meetings of the Board ofDirectors,AuditCommittee,StakeholderRelationship Committeeand NominationandRemunerationCommittee,in regards to thequorumin such meetings and the resolutionsapprovedinthosemeetingsfromthe	Themanagementhastakennecessarylegalopinionfroman independentlaw firmand theyhave stated that thereis no non-compliancebythe said directors as reported above.

aforesaid AGM date until the dates when theCompanydesignatedthemasnonindependentdirectors.
Item No. 5(2)(a)Weareunabletoconcludeontheconsequentialimpact,ifany,onthestandalone financial statementsarising out ofthematterspertainingtonon-compliancewiththeapplicablemasterdirections/notificationsissued by theReserve Bank ofIndia("RBI")andprovisionsof TheForeignExchangeManagementAct,1999,asamended, in respect of the following:(a) TheCompanyhasexporttradereceivables and foreigncurrency interestreceivable aggregating Rs.3,037.28 Lakhsand Rs.336.13 Lakhs, respectively,whichareoutstandingformorethanninemonths, fromthe invoice date, as at 31March2019, whichis beyondthetimelimitstipulatedundertheForeignExchange Management(Export of Goods&Services)Regulations,2015,forrepatriationofforeigncurrencyreceivables.	ThemanagementherebystatesthatthishasbeenreportedtotheReserve Bank ofIndiathrough the AD Bank.
Item No. 5(2)(b)As at 31 March2019, the Company had notmadethenecessaryintimationstotheAuthorisedDealer/ RBI as requiredunder theMasterDirectionsprovidedbytheRBI onForeignInvestmentinIndiaforloan/collaterals/pledgereceivedfromthepromoterof theCompany,being a residentoutside India, amounting to Rs.1,395.02 Lakhsduring the year ended 31 March 2019.However,subsequenttotheyear-end,theCompanyhasmadeanintimationtotheAuthoriseddealer on 12 July 2019 and is yet	The managementherebyclarifiesthatthe dueintimationhas been made to the Reserve Bankof India (RBI)throughthe AD Bank and the samewas provided to the audit team during the audit.The application of condonationdoes not arise asthe AD Bank has not reverted after intimation.
tomakean applicationforcondonationofdelay.
Item No. 5(2)(c)ItappearsthattheCompanyhas providedacorporateguarantee to Columbia Bank for a lineof credit availed by 8K Miles SoftwareServicesInc., a subsidiary of the Company, and NexageTechnologies Inc., a step down subsidiary of theCompany,aggregatingUSD 5,000,000on12September2018.Aspertheloansanctiondocumentissued by Columbia Bank, the line of	Themanagementhas providedthenecessaryresolutionto the audit team, prior to this reportoftheauditors.Also,theshareholders'resolutionpassed during the AGM (under section186 of Companies Act 2013) in the year 2015.The minutesof theBoard of Directorsmeetingapprovingsuch corporateguaranteehas beenprovidedandthenecessaryintimationintheprescribed format to AD bank is in progress.

credit was approved by Columbia Bank based ona representationby theManagingDirectorofthe Company that the corporateguarantee wasapprovedby the shareholdersof the Company.We have not been provided withminutes of themeetingoftheshareholdersreferredaboveapprovingsuchcorporateguarantee.Further,theCompanyhasalsonotintimatedtheAuthorisedDealer for providingsuch corporateguaranteeasrequiredundertheMasterDirectionsprovidedbytheRBIonDirectInvestmentby Residents in Joint Venture/(JV)Wholly Owned Subsidiary (WOS) Abroad.
Item No. 5(3)Further,theCompany has notcarriedoutacomprehensivereviewofcompliancewithlaws andregulationsandthereforeweareunabletocommentifthereareany otherinstancesofnon-compliancewithlaws andregulationsandanyconsequentialimpactthereof.Item No.6Information/clarificationsrequestedbutnotprovidedDuringthecourseofouraudit,wehaverequestedfromthemanagementvariousinformationand clarificationsthat were requiredfor the purposes of our audit. In additionto theinformationand clarificationspending in respectof themattersdescribedin paragraphs1 to5above,information,interalia,relatingtoassessment of howtherevenuerecognisedbytheCompanywasincompliancewiththeprovisionsofIndAS115,documentationsupportingevaluationoftheexpectedcreditlosses as at 31 March2019, documentationonservicesreceivedagainstcertainconsultancyexpenses,confirmationofbalancesfromcustomers, vendors and otherparties,etc., arealso pending to be provided to / received by us.In viewof such pendinginformation,we havenotbeen able toobtainsufficientappropriateevidencetoconcludeonthosematterstoexpress an opinionon thestandalonefinancialstatements.	Themanagementhas carriedoutarequisitereview of compliancewithlaws and regulationsbyengagingindividualprofessionalsandpractitionershaving relevantarea of expertise.The managementalso assures toenhance thecompetencyfurtherwithrespect to complianceand corporate governance of the company.The details of how the revenues recognized wereprovided during the auditIND AS 115 -since most of the revenue is timeand material-applicabilityof thisstandardisquestionable or complied with the standardThe confirmationof balances and StatementofWorks and Master Services Agreements enteredbetweenhavebeensoughtdirectlyfromthecustomers by the auditors.
Item No.7Use of going concern assumptionIn view of the mattersreportedin paragraphs 1to 6 above, and in the absence of reliable cash	Themanagementhasmadefullinquiryintoaffairs of the business as a result of which, theyfirmlybelievethatthereisagoingconcernassumptionastherearerequisitebusiness,

flowprojectionsby themanagement,and anyconsequentialimpactof thosematterson thestandalonefinancialstatementsand operationsof the Company, we are unable to commentontheappropriatenessofthegoingconcernassumption adoptedby the managementin thepreparationofthesestandalonefinancialstatements.	operations,customers,andemployees.Themanagementhasdiscussedthecashflowprojectionsforthe foreseeableperiodand notenvisaged anythingnegativewhichwillimpactthe Company's business operationsin the futureyears.
Item No.8
Informationon subsidiaries
Based on informationin thepublic domain8KMiles Cloud Solutions Pte. Limited, Singapore hasstated itself to be a subsidiary of the Company.This entityappears to have been incorporatedon 08May2017.Further,8K MilesSoftwareServicesPte.Ltd,Singaporeand8KMilesSoftwareServices UK Limited,UnitedKingdomexist withthepromoterdirectorsappearingasshareholders/directors.Theincorporationofwhollyownedsubsidiariesinthesecountrieswere approvedby the Board of Directors of theCompany on 30 May 2018.	One of the directorhas incorporatedon behalfof theparentcompanytwoforeignsubsidiarycompanies.Since there is no possible economicbenefitarisingoutofthesecompanies,themanagementis in the process of striking off theCompany.Underthecircumstancesand thereare no commercial transactions,these were notconsolidated.
However, all these three entitieshave not beenconsidered by the managementof the Companyassubsidiariesinthesestandalonefinancialstatements.Weareinformedbythemanagementthattheseentitiesarenotsubsidiaries of the Company and the informationinthepublicdomain,includingwiththeregulatoryauthoritiesin those geographiesarenot correct.
Wehave notbeen providedwiththeauditedfinancial statements of these entities and/oranyotherverifiableevidencetoascertaintherelationshipof these entities with the Company.Hence,weareunabletocommentontherelationshipoftheseentitiesandtheconsequential impact these entities may have onthe standalone financial statements.

Page 9 of 9

The Board has deliberated about the financial statements (consolidated) and the report of the statutory auditors. The response for qualification of the Auditors opinion has been provided below:

Response on the AuditorsOpinion for ConsolidatedAuditedFinancial StatementsManagement'sfor the Financial Year ended March 31. 2019
Observation:Auditors	ResponseManagement's
Item 1(a) Severalinstancesofinconsistenciesbetween the initial bank statementsandthesubsequentbankstatementsprovidedforverificationincertainsubsidiaries. Also see paragraphs 3.3 and4 below.	Themanagementstatesthatthesubsidiaryaccounts have been audited by the auditorin thedomicile of subsidiary and not reportedany suchinconsistencies.
(b) SeveralinstancesofinconsistenciesbetweendeclarationsprovidedbyDirectorsandinformationavailableinthepublicforumwhichdemonstratedexistenceofprobablerelatedpartieswhichwerenotdisclosedpreviously,includingcertaintransactionswithsuchpartieswhichwerenotdisclosedorapprovedbytheAuditCommittee/Board of Directors.Also see paragraphS.l(a) below.	TheDirectorshaveprovidedtheappropriatedocumentsasrequiredunderthelawandbelieves to theirknowledgethereis no relatedparties which were undisclosed.
(c) Severalinstancesoftransactionswithcertain customers, wherein the Companywasnotabletoprovideus withtheparticularsof the services renderedandacknowledgedbythecustomer,thedetailsof employeesactuallyrenderingsuchservice,theappropriatenessandsource of the monies received from suchcustomers. Also see paragraph 2 below.	The Managementhereby affirms that the propertimesheetsandnatureofservicesrenderedweresubmittedtotheauditteamduringtheaudit along with the acknowledgementreceivedfromsuch customers.Also, the confirmationofbalances were received from the customers andthe Company has requestedsuch customers forthepaymentscheduletosupporttherecoverabilityof the amounts from them.
(d) Several inconsistencieswiththenamesof the parties / customers mentionedinthebankstatementsofsomeofthesubsidiariesand thebooksofaccountmaintainedby thosesubsidiaries.Alsoseeparagraphl(a)aboveandparagraphs 3.3 and 4 below.	Themanagementstatesthatthesubsidiaryaccounts have been audited by the auditor in thedomicile of subsidiary and not reportedany suchinconsistencies.
(e) Several instancesofmultipleaddressesbeingconsideredinvariouscommunicationswithcertaincustomersin the invoices, website of the customer,onchequesreceivedfromcustomers,including instances wherein some of thecommunicationaddresses coincided withtheresidentialaddressofcertainemployeesofrompanyoritst.bA.k~'I"':"'_C::.5'	TheManagementherebystatesthatcertaincustomershavemultiplelocationsandtheservices were provided at various locations. TheManagementhas duly clarified to the audit teamabout the addresses of the employees who werepreviously the employees of our customers.

~9 * ·0'>-

Page 1 of 12 loa~ ~ ~ Cenotaph Road, II Floor, Srinivas Towers, Teynampet, Chennai - 600 018 ~ CHENNA (l~1 4466028000 8+91 44 43009049 contactus@8kmilessoftwareservices.com ~~ A. No. L 7 2 3 0 0 T N 1 9 9 3 P L C 1 0 1 8 5 2 w w w . 8 k mil e s . com

subsidiaries,whichimpactedourabilitytoestablishtheauthenticityofthecustomer. Also see paragraph 2 below.
(f) Several instances of communicationswitha vendor,whereinthereweremultiplecommunicationsusingdifferentemailids, documentswithvaryingsignaturesanddifferencesinthespellingofthecommonsignatoryofthevendor,etc.whichimpactedourabilitytoestablishthe authenticityof the vendor. Also seeparagraphs 3.3 and 4 below.	TheManagementhasgivennecessaryexplanationsto audit team during the audit fortheemail addresses used by thevendor.TheManagementaffirmsthattheauthenticityofthatvendorhas been establishedby obtainingdirectconfirmationfromthatvendorwithrespect to services provided.The Managementalso of the opinionthatusage of multipleemailaddresses is the preference of the vendor.
(g) Severalinstancesofvariousinconsistencieswerealsonotedduringourauditofthebooksofaccountofcertain foreign subsidiaries in associationwithourauditoftheconsolidatedfinancial statements of the Company.	Themanagementstatesthatthesubsidiaryaccounts have been audited by the auditorin thedomicile of subsidiary and not reportedany suchinconsistencies.
(h) Appropriateapprovals and concerns overrecovery of advances made to a relatedparty, by the Group. Also see paragraph3 below.	The managementconfirmsthatadvances toarelated party has been fully recovered during theyear of audit and there is NO outstandingat theend of31stMarch2019 as per thebooks ofaccount.
Item 2Access to books of account of a subsidiary andinformationon subsidiaries2.1Our terms of engagement for the audit oftheconsolidatedfinancialstatementsof theCompanyincludedthemanagement'sresponsibilityto provide us access, at all times,totherecordsofall thesubsidiariesof theCompanyinsofarasitrelatestotheconsolidationofitsfinancialstatementsasenvisaged in the Act.However, the Company did not provide us theaccess to the records and books of account of8KMilesSoftwareServicesFZE, awhollyownedsubsidiaryoftheCompany,whichrepresentstotalassets of Rs.11,635.68 Lakhsasat31March2019,totalrevenuesofRs.7,560.23 Lakhs, profit after tax of Rs.789.65Lakhs andnetcashoutflowsamountingtoRs.96 Lakhs for the year ended on that date, asconsideredintheseconsolidatedfinancialstatements.	Themanagementhasinformedthatthesubsidiaryaccountshavebeenauditedbyanother auditorof the domicile of the subsidiaryand that audited financial statementshave beenfurnishedtothestatutoryauditorsofthecompany for the purpose of consolidation.
Thesebalanceshavebeenincluded,intheconsolidatedfinancialstatements,bytheManagementbased on financial statementsof

Page 2 of 12

thesubsidiary,preparedinaccordancewiththe InternationalFinancial Reporting Standards(IFRS), whereintheauditorof thesubsidiaryhas issued an unmodifiedreport.Wewereunabletoobtainsufficientappropriateaudit evidence about the state ofaffairs of the subsidiary as at 31 March 2019and theresults of its operationsfor the yearthenended,in theabsence of access to therecords and books of account of the subsidiary.
2.2 Based on informationin thepublic domain8K Miles Cloud Solutions Pte. Limited, SingaporehasstateditselftobeasubsidiaryoftheCompany.Thisentityappearstohavebeenincorporatedon 08 May 2017. Further, 8K MilesSoftwareServices Pte.Ltd, Singaporeand8KMilesSoftwareServicesUKLimited,UnitedKingdomexistwiththepromoterdirectorsappearingasshareholders/directors.Theincorporationofwhollyownedsubsidiariesinthese countrieswere approvedby the Board ofDirectors of the Company on 30 May 2018.	One of the directorhas incorporatedon behalfof theparentcompanytwoforeignsubsidiarycompanies.Since there is no possible economicbenefitarisingoutofthesecompanies,themanagementis in the process of striking off theCompany.Underthecircumstancesand thereare no commercial transactions,these were notconsolidated.
However, all these three entitieshave not beenconsidered by the management of the Companyassubsidiariesinthesestandalonefinancialstatements.Weareinformedbythemanagementthattheseentitiesarenotsubsidiaries of the Company and the informationinthepublicdomain,includingwiththeregulatoryauthoritiesin those geographies arenot correct.
Wehave notbeen providedwiththeauditedfinancial statements of these entities and/oranyotherverifiableevidencetoascertaintherelationshipof these entities with the Company.Hence,weareunabletocommentontherelationshipoftheseentitiesandtheconsequential impact these entities may have onthe standalone financial statements.
Item No.3: 8K Miles Media Private Limited3.1Around the last week of September 2018,we were made aware of the resignationofthestatutoryauditorof8KMilesMedia,acompanypromotedbythepromoterdirectors of the Company, videtheirresignationletterdated 30 30 April2018.Asperthesaidletter,the	The management states that the forensic expertsappointedby the 8K Miles Media Private LimitedhavesubmittedtheirreporttotheBoardwhereintheyhaveconcludedthatalltheallegationsmadeon8K MilesMediaarenottrue.TheBoardherebyhasdulytakenthatreportintorecord.Themanagementfurtherclarifies thereis no relationshipnexus between

	resignation was due to the misuse of thatAudit Firm's letterHead and signature oftheirPartnerthroughforgeryin certain001 Certificatessubmittedby 8K MilesMedia to its bankers for transfer of fundsof USD 71.51(Rs. 4,612.91lakhslakhs)to 8K Miles MediaHoldings Inc. USA, asubsidiaryof BK MilesMedia.BK MilesMedia and its subsidiaries (together"BKMiles Media Group") were identifiedas arelated party in the consolidated financialstatementsof the Company for the yearended 31 March 2018. During the periodended31Decemberthe201B,managementof BK Miles Media initiatedanindependentforensicreviewtoevaluatetheauthenticityofthesignatures in the 001 Certificates referredabove. BK MilesMediahas submittedacopyoftheforensicreporttotheCompany.Weunderstandthattheaforesaid forensicreportstates thatthewriterofthesignatureinthe001certificatesis thesame as thatofthespecimen signatures of the audit partnerasprovidedtotheforensicauditortherebyconcludingthattherewasnoforgeryin the 001 certificates.Since thismatterrelatestoacompanywhereanotherfirmis the statutoryauditorandsincethefinancialstatementsofthatcompanyarenotincludedintheconsolidatedfinancialstatementsof theCompany,wehavenotbeenabletoperformany proceduresrelatedtotheallegation or the forensic report.	BK Miles Media and the Company, except for thecommonpromoter.Thus,thereisnorequirementof providing financial statementsofBK Miles Media to the auditors.
3.2a)b)	Further,duringthelastweekofSeptember 201B,theCEO andManagingDirectorof theCompany,whowasalsoapromoterdirectorin 8K Miles Media, resigned as adirector in BK Miles Media.theCFO andExecutiveDirectorof theCompany, whowas theotherpromoterdirectorin 8K Miles Media, resigned fromhis role as CFO of theCompany statingthathisresignationwastohavethe	The ManagementaffirmsthatBK MilesMediahas no nexus except for the common promoters.Hence the false and baseless allegations have noimpact on the Company and its operations.The Trade receivables from 8K Software ServicesInc., a subsidiary is an ongoing account and havesince receivedRs.B5B.4B lakhstilldateof thisreport.Withrespect to loans receivable from8K MilesMediaGroupinUSA-thetotalamountincluding the interestcharge on the outstandingamounts have been fully recovered and as at the

Page II of 12

necessary timeto clear all thebaselessallegationsandunsubstantiatedallegationsrelatingto8K MilesMedia.However, he continues to be a directorinboththeCompany as wellas 8K Milest- _M_ed_i_a.--j3.3TheCompanyhastradeandotherreceivables aggregating Rs.3,309.10 lakhsas at 31 March 2019 receivable from8KMiles Software Services Inc., a subsidiary.It may be noted that this subsidiary hadloans receivable from entities of 8K MilesMedia Group in the USA aggregating USD89.61 lakhs (Rs.5,808.44 lakhs) as at 31March 2018.	31st March 2019 the balance from8K Media isNIl.AlsotheManagementaffirmsthattheappropriateworkingsfortheinterestontheamountsoutstandinghave beenprovidedandrecovered in full.Based on the above facts and continuityof thebusiness and operationsof thesubsidiary,theManagementsbelievesthatthereisnopossibilityofimpairmentintheinvestmentsmadebytheparentcompanyandtherecoverabilityoftheamountreceivablesaregood.
We are informedby the managementof theCompany thatsuch amountsdue,includinginterest as accrued, have been fully recoveredasat31March2019bythatsubsidiary.However,intheabsenceofappropriateworkingsfortheinterest,documentationregardingloanagreementsandduetoinconsistenciesnotedbetweenthetransactionsas per theBank Statementsofthesubsidiarywiththetransactionsasrecordedinthebooksofaccountofthesubsidiary;wewereunabletoconfirmthemanagement'sassertiononthesaidcollections made by the subsidiary.
3.4We are unable to conclude if the aboveevents in 8K Miles Media have any effecton:(a)the Group and its operations, in view oftheallegationsintheaforesaidresignationletterofthestatutoryauditor of that company and the natureof the Company's relationshipwith8KMiles Media, as described in paragraphs3.1 and 3.2 above, respectively(b)thestatusoftheGroup'sreceivablefrom such related party, as described inparagraph 3.3 above; and(c)the consequentialimpact, if any, of thesameontheoperationsoftheCompany.	As explainedthe companyhas received all theoutstandingamountspriortoDecember2018and theabove allegationis nothingto do withthe company as it is neither a related party nor asubsidiary.
Item 4Revenue fromContractswithCustomersandrelated outstanding receivablesDuring the year ended 31 March 2019 the GroupinitiallyrecognisedrevenueaggregatingtoRs.	TheCompanyhasobtainedthenecessarybalance confirmationfromthe customersas attheendoftheyearandtheCompanyhasrequestedsuchcustomersforthepayment

Page 5 of 12

54,789 Lakhs (including Rs. 2,428.69 Lakhs relating to the Company) from the customers referred to in paragraphs l(c), l(d) and l(e) above.

The management has, subsequently, based on our report under section 143(12) of the Act reversed and derecognised revenue aggregating to Rs.16,940.66 Lakhs (including Rs. Nil relating to the Company) and the consequent receivables. Accordingly, the net revenues recognised from these customers during the year aggregated to Rs. 37,848.34 Lakhs and the outstanding receivables as at 31 March 2019 is Rs. 9,382.13 Lakhs (includes balances of Rs. 1,022.36 Lakhs outstanding even as at 31 March 2018).

In the absence of complete information regarding the proof of services rendered, efforts expended, basis of revenue recognition and reversal / derecognition, and in view of our observations in paragraphs l(c), l(d) and l(e) above in respect of these customers, and inconsistencies in the bank statements referred in paragraph l(a) above, we are unable to conclude on the appropriateness / correctness / completeness / validity of the net revenue recognised, compliance with the recognition and measurement of revenue required under the Indian Accounting Standard (Ind AS) 115 - Revenue from Contracts with Customers and the corresponding receivables in these consolidated financial statements.

The Group has also not carried out an evaluation of the expected credit loss required under Indian Accounting Standard (Ind AS) 109 - Financial Instruments (Ind AS 109) for the outstanding trade receivables as at 31 March 2019 and therefore we are unable to comment on the adequacy and appropriateness of the provision made against the trade receivable balances as at 31 March 2019.

Item 5: Procurement of services and trade payables

5.1 Based on the master service agreement with the external service provider, referred to in paragraph l(d) above, for technical and referral services to be rendered towards certain customers, referred to in

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schedule to support the recoverability of the amounts from those customers. As the amounts are good to recover, an evaluation of the expected credit loss as required under Indian Accounting Standard (Ind AS) 109 - Financial Instruments for the outstanding trade receivables does not arise.

As explained l(b) above, the Management hereby affirms that the proper time sheets and nature of services rendered were submitted to the audit team during the audit along with the acknowledgement received from such customers. Also, the confirmation of balances were received from the customers and the Company has requested such customers for the payment schedule to support the recoverability of the amounts from them.

The Management has provided the audit team, the details with respect to services availed from the vendor, confirmation of the charges and payables.

With respect to GST applicability, the Management is in the process of obtaining a professional opinion and will take requisite steps in due course.

paragraphs 1 (b) and l(c) above, the Companyhasrecordedconsultancychargesof
Rs.l,706.40Lakhs, fortheyearended31
March2019 withan outstandingliabilityof
Rs.l,709.16 Lakhs. In the absence of complete
informationregardingproofoftheservices
renderedby the vendor,and in viewof our
observationsinparagraphl(d)abovein
respectofthisvendor,weareunableto
conclude on the appropriateness/ correctness
/ completeness / validityof the expense and .
the correspondingliabilityrecordedin these
standalone financial statements.
Further,the Company has not evaluatedthe
applicabilityorcoverageofsuchservices
under the Goods and Service Tax Regulations
andhasnotaccrued/paidthesame.
However,in our opinion,such tax is payable
on those services. The managementhas not
determinedthe amount of Goods and Service
Tax payable and any interest thereon.We are
unabletoconcludeontheconsequential
impactofthesameonthesestandalone
financial statements.
5.2.Based on theinvoices received from	The managementhas explained during the audit
certain vendors, referred to in paragraph 1 (g)	to the audit team that the services renderedby
above, the Group has for the year ended 31	thesevendorsare "Developmentof Tools and
March2019recordedconsultancycharges	Platforms" which are owned by the Company.
aggregatingRs.26,689.45Lakhs (includedin
Note23oftheconsolidatedfinancial
statements),intangibleassets/assetsunder
developmentof Rs.22,267.29 Lakhs (included
inNote5Coftheconsolidatedfinancial
statements),withan outstandingliabilityof
Rs.2,224.43 Lakhs as at that date (included in
Note15oftheconsolidatedfinancial
statements).
Intheabsenceofcompleteinformation
regardingnatureoftheservicesbeing
rendered,thecustomersforwhomthese
services wererenderedandthenatureof
intangible assets being developed, and in view
of our observations in paragraph l(g) above in
respectof these vendors,we are unable to
conclude on the appropriateness/ correctness
/ completeness / validityof the expense, the
intangibleasset /asset underdevelopment
andthecorrespondingliability/paymentrecordedintheseconsolidatedfinancial
statements.Item 6: Income Taxes	Themanagementstatesthatthesubsidiary

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The Grouphas recordedtax expenses (net)ofRs.1,6s0.40Lakhs duringtheyearended31March2019,includedinNote33totheconsolidatedfinancial statements,and has a nettax asset as at that date of Rs.3,02s.84 Lakhs anda net deferredtax liabilityof RS.671.02 Lakhs,included in Notes 19 and 33 to the consolidatedfinancialstatementsrespectively,relatingtocertainof its foreignsubsidiaries. We have notbeen providedwiththetaxreturnsfiledwithregard to its foreignsubsidiaries,reconciliationof the balances considered in the tax returns sofiled with the audited financial statements of thesubsidiaries,thetaxpositionandstatusofassessments of such subsidiaries, a roll forwardto the deferred tax position as at 31 March 2019from 31 March 2018 and the workings for the taxprovisionforthecurrentyear.Weareaccordinglyunable to conclude on the carryingamountsof tax assets and liabilities,includingdeferredtax balances, as at 31 March 2019, asconsideredintheseconsolidatedfinancialstatements.Further,in theabsence of the taxreturns we have also not been able to validateiftheprofitsof thesesubsidiariesconsideredinthe tax returns and as per the books of accountprovided to us were the same.	accounts have been audited by the auditor in thedomicile of subsidiary and the matters specifiedinthisitemhasbeendulyrecordedinthefinancial statementof the subsidiary company.
Item7:Intangibleassetcapitalisationandevaluation of impairment,including for goodwill7.1 The Grouphas duringtheyearcapitalisedcosts towardsinternallygeneratedintangibleassetsandinternallygeneratedintangibleassetsunderdevelopmentamountingtoRs.32,393.BO Lakhs (also referparagraphs l(g)and 5.2 above). In the absence of appropriatedocumentationastothenatureoftheseintangibleassets,datatodemonstratetheappropriatenessofthetimingtocommencecapitalizationofcostsassociatedwithsuchintangibleassetsaswellasthebasistodemonstratethe costs capitalised in fact wereassociatedwiththeintangiblesbeingdeveloped,weareunablecommentonthecarrying value of such intangible assets as at 31March 2019.	Theimpairmentanalysis alongwithprojectedfinancialstatementsfor the entitieshave beenprepared and discussed by the Managementandconcludedthatthereisnoneedforanyimpairmentof Intangibles as at 31st March 2019.
7.2The Grouphas goodwilland acquiredintangibles (net of amortisation)of Rs.62,BOO.llLakhs as at 31 March 2019.The managementhas not provided us with theirassessment of any impairmentto thecarrying

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valueofsuchgoodwillandotherintangible
assets. Accordingly,we are unable to comment
on the appropriatenessof the carrying value and
therecoverabilityofsuch goodwillandother
intangible assets as at 31 March 2019.
Item 8: Business Combinations	The considerationhas been determinedand paid
The Group had in thepreviousyear ended31	as per thetermsand conditionsof theShare
March2018 completedcertainacquisitionsor	Purchase Agreement and the same is recorded in
hadpaidadvancestowardsproposed	the books of account.
acquisitions, wherein we noted that:
8.1.Duringthepreviousyearended31
March 2018, the Group had recorded an amount
ofUSD3,304,557(INR2,142.01Lakhs)as
contingentconsiderationduetotheerstwhile
ownersofCornerstoneAdvisorsGroupLLC
("Cornerstone")payableuponsatisfactionof
conditionsasspecifiedintheacquisition
agreement.During the currentyear an amount
USD 721,366 (INR 503.22 Lakhs) has been paid
bytheGrouptotheerstwhilemembersof
Cornerstone.Intheabsenceofdetailswith
respect to satisfactionof conditionsas specified
in the acquisitionagreement,we are unable to
commentontheamountofcontingent
considerationthat has been paid during the year
and the carrying amountof Rs. 1,079.56 Lakhs,
as the liabilitytowards contingentconsideration
as at 31 March 2019. Further such consideration
has notbeen fair valued as requiredunder Ind
AS 109.
8.2 An advance of USD 6,500,000 was paid by	The contracthas been extendedon thesame
one of the subsidiaries of the Company, during	termsforan additionalperiodof nine months
thepreviousyearended31March2018,	ending December 2019 and the same has been
consequenttoaSharePurchaseagreement	Provided to the audit team.
enteredinto with a Seller and a Corporationfor
acquiringtheentireoutstandingshares of the
Corporation.Inaccordancewiththesaid
agreement,intheeventtheclosingof
acquisitiondoesn't occur within15 months(i.e.
beforeFeb 2019) fromthe date of agreement,
SellerwillretainFiveHundredThousandUS
Dollars($500,000)as penaltyandbalance Six
MillionUSDollars ($6,000,000) shall be refunded
to the Group within5 calendar days.As at 31
March 2019 the acquisitionas planned was not
completedandtheManagementofthe
Company has representedthatthe termof the
Share Purchase agreementhas been extended.
Intheabsenceofasupportingconvincing
evidenceandourinabilitytosenddirect
confirmationrequesttotheSellerandthe
Corporationontherevisionoftheterms

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includingwaiverofthepenalty,duetonotreceiving thecommunicationaddress to whichthe confirmationrequests were to be sent, weare unable to commenton the recoverabilityofthe amount of Rs. 4,505.80 Lakhs (equivalent toUSD6,500,000)includedunderNote9as"advances towards acquisition",as at 31 March2019 and the consequentialimpact,if any, onthe consolidated financial statements
Item 9: Regulatory Compliances9.1.Weareunabletoconcludeontheconsequentialimpact,if any, on the operationsand the financialperformanceof the Companyarising out of the followingmatters pertaining tonon-compliancewiththeprovisionsoftheCompanies Act, 2013 and notificationsissued bytheSecuritiesandExchangeBoardofIndia(SEBI),as applicable:	ThemanagementherebystatesthatthishasbeenreportedtotheReserve Bank ofIndiathrough the AD Bank.
(a) In the absence of appropriateprocesses foridentifyingrelated parties in view of the mattersreportedinparagraph1(a)above,weareunabletocommentontheaccuracyandcompletenessoftherelatedpartiesidentifiedanddisclosedbytheCompanyincludingcompliance withobtainingnecessary approvals,asrequired,fromthosechargedwithgovernance.(b)It was noted thatin the case of twooftheDirectorswhowerere-appointedattheAnnualGeneralMeeting(AGM)heldon18September 2015 and designated as independentdirectors(One wasalso theChairmanof theAudit Committeeand the other a member of theNominationand RemunerationCommitteeandalsotheChairmanoftheStakeholderRelationship Committee),they may have ceasedto be independentdirectorsunder the Act witheffectfrom17 November2015 and 12 August2015, respectively,being thedatefromwhentheirrelativeswereemployedeitherwiththeCompany or its subsidiary. These directorshavebeen designatedas non-independentdirectorsby the Company from06 September2019 and13 February 2019, respectively.Considering the above, we are unable to opineon the validityof the meetings of the Board ofDirectors,AuditCommittee,StakeholderRelationshipCommitteeandNominationandRemunerationCommittee,inregardstothequorumin such meetingsand theresolutionsPage 10 of 12

approvedin those meetings fromthe aforesaidAGM dateuntilthe dates whentheCompanydesignated them as non-independentdirectors.9.2.Weareunabletoconcludeontheconsequential impact, if any, on the consolidatedfinancialstatementsarising outof thematterspertainingtonon-compliancewiththeapplicable master directions/notificationsissuedbytheReserveBankofIndia(/lRBI")andofTheForeignExchangeprovisionsManagementAct, 1999, as amended,in respectof the following:(a)The Holding Company has exporttradereceivables.andforeigncurrencyinterestreceivableaggregatingRs.3,037.28Lakhs andRS.336.13Lakhs,respectively,whichareoutstandingformore thanninemonths,fromthe invoice date, as at 31 March 2019, which isbeyondthetimelimitstipulatedundertheForeign Exchange Management(Export of Goods& Services) Regulations, 2015, for repatriationofforeign currency receivables.
(b)As at 31 March 2019, the Company hadnotmadethenecessaryintimationstotheAuthorisedDealer/RBI as requiredundertheMasterDirectionsprovidedbytheRBIonForeign Investment in India for loan/ collaterals/pledgereceivedfromthepromoteroftheCompany,beingaresidentoutsideIndia,amountingto Rs. 1,395.02 Lakhs during the yearended 31 March 2019. However, subsequent totheyear-end,theCompanyhasmadeanintimationto the Authoriseddealer on 12 July2019andis yettomakeanapplicationforcondonationof delay.	The managementherebyclarifiesthatthedueintimationhas been made to the Reserve Bankof India (RBI)throughthe AD Bank and the samewas provided to the audit team during the audit.The applicationof condonationdoes not arise asthe AD Bank has not reverted after intimation.
(c)It appears that the Holding Company hasprovidedacorporateguaranteetoColumbiaBank fora line of creditavailed by twoof thesubsidiariesintheGroupaggregatingUSD5,000,000on12 September2018. As per theloansanctiondocumentissuedbyColumbiaBank,thelineofcreditwasapprovedbyColumbiaBank, based on a representationbythe Managing Director of the Holding Companythatthe corporateguaranteewas approvedbythe shareholders of the Holding Company.We have not been provided withminutes of themeetingoftheshareholdersreferredaboveapprovingsuchcorporateguarantee.Further,theCompanyhasalsonotintimatedthe	Themanagementhas providedthenecessaryresolutionto the audit team, prior to this reportoftheauditors.Also,theshareholders'resolutionpassed during the AGM (under section186 of Companies Act 2013) in the year 2015.The minutesof theBoard of Directorsmeetingapprovingsuch corporateguaranteehas beenprovidedandthenecessary intimationin theprescribed format to AD bank is in progress.

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AuthorisedDealer forprovidingsuch corporateguaranteeasrequiredundertheMasterDirectionsprovidedbytheRBIonDirectInvestmentby Residents in Joint Venture(JV) /Wholly Owned Subsidiary (WOS) Abroad.9.3. Further, the Company has not carried out acomprehensivereviewof compliancewithlawsand regulations and thereforewe are unable tocommentif thereareany otherinstancesofnon-compliancewithlaws and regulationsandany consequential impact thereof.	Themanagementhas carriedoutarequisitereview of compliance withlaws and regulationsbyengagingindividualprofessionalsandpractitionershaving relevantarea of expertise.The managementalso assures toenhance thecompetencyfurtherwithrespect to complianceand corporate governance of the company.
10: InformationItem/clarificationsrequestedbut not providedDuringthecourseofouraudit,wehaverequestedfromthemanagementvariousinformationand clarifications that were requiredfor the purposes of our audit. In additionto theinformationand clarificationspending in respectin paragraphs 1 to9of themattersdescribedabove,information,interalia,relatingtoassessment of how therevenuerecognised bythe Group was in compliance with the provisions115,ofIndASDocumentationsupporting31evaluationofexpectedcreditlosses as at2019,Marchinformationofpayrollcostsrecognisedinsomeofthesubsidiaries,confirmationofbalancesfromcustomers,vendors and other parties, etc., are also pendingto be providedto /received by us. In viewofsuch pendinginformation,wehave notbeenable to obtain sufficientappropriateevidence toconclude on those matters to express an opinionon the consolidated financial statements.	TheCompanyhasbeenprovidingtheinformationand clarificationsto thebest of itsability from time to time during the audit.As farIND AS 115 is concerned,as thesince most ofthe revenue is timeand material -applicabilityof this standard is questionableor complied withthe standard.
Item 11: Use of going concern assumptionin paragraphs 1In view of the mattersreportedto 10 above, and in the absence of reliable cashfloworoiectionsby themanagement,and anyconsequentialimpactof thosematterson theconsolidatedfinancialstatementsandoperationsoftheGroup,weareunabletocommenton theappropriatenessof thegoingconcernassumptionadoptedbythemanagementinthepreparationoftheseconsolidated financial statements.	Themanagementhasmadefullinquiryintoaffairs of the business as a result of which, theyfirmlybelievethatthereisagoingconcernassumptionastherearerequisitebusiness,operations,customers,andemployees.Themanagementhasdiscussedthecashflowprojectionsfor theforeseeableperiodand notenvisaged anythingnegativewhichwillimpactthe Company's business operationsin the futureyears.

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