Kaya Limited
Report on the Audit of the Standalone Financial Statements
Opinion
We have audited the standalone financial statements of Kaya Limited (the “Company”)(including one branch) which comprise the standalone balance sheet as at 31 March 2024, and the standalone statement of profit and loss (including other comprehensive income), standalone statement of changes in equity and standalone statement of cash flows for the year then ended, and notes to the standalone financial statements, including material accounting policies and other explanatory information.
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone financial statements give the information required by the Companies Act, 2013 (“Act”) in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at 31 March 2024, and its loss and other comprehensive loss, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specified under Section 143(10) of the Act. Our responsibilities under those SAs are further described in the Auditor's Responsibilities for the Audit of the Standalone Financial Statements section of our report. We are independent of the Company in accordance with the Code of Ethics issued by the Institute of Chartered Accountants of India together with the ethical requirements that are relevant to our audit of the standalone financial statements under the provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the standalone financial statements of the current period. These matters were addressed in the context of our audit of the standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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Assessment of Going concern assumption
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See Note 1(f) to standalone financial statements
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The key audit matter
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How the matter was addressed in our audit
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The availability of sufficient funding and the testing of whether Our audit procedures included: the Company will be able to continue meeting its obligations
• Obtained an understanding of the key controls relating to
is important for the going concern assumption and, as such,
the Company's forecasting process.
is significant aspect of our audit. This test or assessment is
largely based on the expectations of and the estimates made • Tested and challenged the key assumptions used by the by management. The expectations and estimates can be Company in preparing the cash flow forecasts including influenced by subjective elements such as estimated future revenue, fixed and operating costs, capital expenditure and cash flows, forecasted results and margins from operations. funding requirements based on our understanding of the Estimates are based on assumptions. Company's business.
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Performed sensitivity analysis to the cash flow forecast by considering plausible changes to the key assumptions adopted by the Company and its impact on the going concern assumption.
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Obtained details of borrowings approved / received and tested with underlying documentation.
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Inspected the letter of financial support from the promoters.
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Considered the adequacy of the disclosure in the financial statements in respect of Company's assessment of going concern assumption
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Revenue Recognition
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See Note 2A(a) and 26 to standalone financial statements
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The key audit matter
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How the matter was addressed in our audit
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The Company recognizes revenue when a
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In view of the significance of the matter, we applied the following audit
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performance obligation is satisfied by rendering of
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procedures in this area, among others to obtain sufficient appropriate
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services to customers in clinics and sale of products
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audit evidence:
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through various distribution channels.
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Assessed the appropriateness of the revenue recognition accounting
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We identified revenue recognition as a Key Audit Matter considering -
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policies by comparing with applicable accounting standard.
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• The Company focuses on revenue as a key
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Obtained understanding of the systems, processes and controls implemented by the Company for determining and recording revenue
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performance measure which could create an incentive for revenue to be recognised before
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and the associated deferred revenue balances.
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the control of underlying products has been
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Tested the design and operating effectiveness of key controls
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transferred or service provided to customer.
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established by management over the completeness, accuracy and
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There is a risk that revenue may be overstated
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existence of revenue.
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or understated because of fraud resulting from the pressure Management may feel to achieve performance targets at the reporting period end.
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Inspected individual revenue transactions on sample basis, selected by applying statistical sampling, from the underlying documents that revenue has been booked correctly and in the correct period with
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• application of revenue recognition accounting
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reference to supporting invoices and other supporting documents.
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standard is complex and involves a number of key judgments and estimates including in determining
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Tested on a sample basis, the supporting documents for sales
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the timing of recognition of unconsumed sessions
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transactions recorded during the period closer to the year end to
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under deferred revenue account;
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determine whether revenue was recognised in the correct period.
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Performed cash to revenue reconciliation and other analytical
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• the accounting for rendering of services is
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procedures and where appropriate, conducted further enquiries and
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susceptible to the Company's override of controls through the recording of fictitious manual journals in the accounting records or the manipulation of inputs used to assess revenue recorded in respect of unused sessions; and
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testing.
verified the breakage provision which is recorded (based on past trends) for deferral of revenue in respect of partly consumed packages, on their normal expiry.
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• at year-end a significant amount of deferred
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Assessed manual journals posted to revenue to identify unusual items.
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revenue related to these services is recognised
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on the balance sheet.
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Assessed the adequacy and appropriateness of the disclosures made in accordance with the relevant accounting standard.
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Impairment evaluation of Investment in subsidiaries
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See Note 2A (g) and 5 to standalone financial statements
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The key audit matter
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How the matter was addressed in our audit
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The recoverable amounts of investment in subsidiaries Our audit procedures included:
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have been determined by the Company based on certain assumptions and estimates
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Assessed the Company's process for identification of indicators of impairment based on Company's evaluation of the financial
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The recoverable amounts so determined have been considered for the impairment evaluation by the Company.
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performance of each subsidiary.
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Verified the recoverable amount determined of each subsidiaries based on the contractual value.
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Due to the judgment involved in determining
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recoverable amount we have considered these to be
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Assessed the appropriateness of the related disclosures in the
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a key audit matter.
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standalone financial statements.
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Impairment evaluation of Property plant and equipments
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See Note 2A (g) and 3 to standalone financial statements
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The key audit matter
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How the matter was addressed in our audit
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Certain clinics which were incurring operating losses were identified by the Company and the PPE therein was accordingly evaluated for impairment
Value in use for each clinic is determined by the Company based on certain assumptions and estimates of future performance.
Due to the judgment involved in forecasting performance, and the estimates involved in discounting future cash flows, we have considered this to be a key audit matter.
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Our audit procedures included:
• Assessed the Company's process for identification of indicators of impairment based on Company's evaluation of the financial performance of each clinic.
• Involved our valuation specialists to assess the valuation methodology and challenged the assumptions used to determine the value in use.
• Performed sensitivity analysis on the key assumptions, to ascertain which adverse changes, both individually or in aggregate, could impact the analysis.
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Assessed the appropriateness of the related disclosures in the standalone financial statement
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Other Information
The Company's Management and Board of Directors are responsible for the other information. The other information comprises the information included in the Company's annual report, but does not include the financial statements and auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
Management's and Board of Directors' Responsibilities for the Standalone Financial Statements
The Company's Management and Board of Directors are responsible for the matters stated in Section 134(5) of the Act with respect to the preparation of these standalone financial statements that give a true and fair view of the state of affairs, profit/ loss and other comprehensive income, changes in equity and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under Section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.
In preparing the standalone financial statements, the Management and Board of Directors are responsible for assessing the Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board of Directors is also responsible for overseeing the Company's financial reporting process.
Auditor’s Responsibilities for the Audit of the Standalone Financial Statements
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with SAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under Section 143(3)(i) of the Act, we are also responsible for expressing our opinion on whether the company has adequate internal financial controls with reference to financial statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the Management and Board of Directors.
• Conclude on the appropriateness of the Management and Board of Directors use of the going concern basis of accounting in preparation of standalone financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor's report to the related disclosures in the standalone financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor's report. However, future events or conditions may cause the Company to cease to continue as a going concern.
• Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor's report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2020 (“the Order”) issued by the Central Government of India in terms of Section 143(11) of the Act, we give in the “Annexure A” a statement on the matters specified in paragraphs 3 and 4 of the Order, to the extent applicable.
2 A. As required by Section 143(3) of the Act, we report that:
a. We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purposes of our audit.
b. In our opinion, proper books of account as required by law have been kept by the Company so far as it appears from our examination of those books, except for the instances mentioned below:
i) Matters as stated in the paragraph (2B(f)) below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014
ii) The back-up of the accounting software used for maintaining general ledger (which forms part of the ‘books of account and other relevant books and papers in electronic mode') has not been kept on servers physically located in India on a daily basis during 01 April 2023 till 20 October 2023.
iii) The daily back-up relating to the period 11 August 2022 to 31 March 2023 for the accounting software used for maintaining general ledger (which forms part of the ‘books of account and other relevant books and papers in electronic mode') has not been preserved by the Company in accordance with the provisions of the Companies Act, 2013.
c. The standalone balance sheet, the standalone statement of profit and loss (including other comprehensive income), the standalone statement of changes in equity and the standalone statement of cash flows dealt with by this Report are in agreement with the books of account.
d. In our opinion, the aforesaid standalone financial statements comply with the Ind AS specified under Section 133 of the Act.
e. On the basis of the written representations received from the directors as on various dates in the month of April 2024 taken on record by the Board of Directors, none of the directors is disqualified as on 31 March 2024 from being appointed as a director in terms of Section 164(2) of the Act.
f. the modifications relating to the maintenance of accounts and other matters connected therewith are as stated in the paragraph [2A(b)] above on reporting under Section 143(3)(b) and paragraph [2B(f)] below on reporting under Rule 11(g) of the Companies (Audit and Auditors) Rules, 2014.
g. With respect to the adequacy of the internal financial controls with reference to financial statements of the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure B”.
B. With respect to the other matters to be included in the Auditor's Report in accordance with Rule 11 of the Companies
(Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations
given to us
a. The Company has disclosed the impact of pending litigations as at 31 March 2024 on its financial position in its standalone financial statements - Refer Note 41 and 29 to the standalone financial statements.
b. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses.
c. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company.
d. (i) The management has represented that, to the best of its knowledge and belief, as disclosed in the Note
44(vii) to the standalone financial statements, no funds have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign entities (“Intermediaries”), with the understanding, whether recorded in writing or otherwise, that the Intermediary shall directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Company (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(ii) The management has represented that, to the best of its knowledge and belief, as disclosed in the Note 44(vii) to the standalone financial statements, no funds have been received by the Company from any person(s) or entity(ies), including foreign entities (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever by or on behalf of the Funding Parties (“Ultimate Beneficiaries”) or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries.
(iii) Based on the audit procedures performed that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above, contain any material misstatement.
e. The Company has neither declared nor paid any dividend during the year.
f. Based on our examination which included test checks, except for the instances mentioned below, the Company has used accounting softwares for maintaining its books of account which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recorded in the software:
• The feature of recording audit trail (edit log) was not enabled at the database layer to log any direct data changes for the accounting software used for maintaining the books of account relating to general ledger. Further, the feature of recording audit trail (edit log) facility was not enabled for certain changes which were performed by users having privileged access rights for the accounting software used for maintaining the books of accounts relating to the general ledger for the period 1 April 2023 till 9 October 2023.
• The feature of recording audit trail (edit log) was not enabled at the application layer for the accounting software used for maintaining books of account relating to recognition of clinic sales . Further, in the absence of reporting on compliance with the audit trail requirements in the independent auditor's report in relation to controls at the service organisation for the said accounting software, which is operated by third-party software service provider, we are unable to comment whether the audit trail feature at the database level of the said software to log any direct data changes, was enabled and operated throughout the year for all relevant transactions recorded in the software.
• In the absence of sufficient and appropriate reporting on compliance with the audit trail requirements in the independent auditor's report of a service organization for the accounting softwares used for maintaining books of account relating to consolidation process and leases, we are unable to comment whether audit trail feature for the said software was enabled and operated throughout the year for all relevant transactions recorded in the software.
Further, for the periods where audit trail (edit log) facility was enabled and operated for the respective softwares
we did not come across any instance of the audit trail feature being tampered with during the course of the audit.
C. With respect to the matter to be included in the Auditor's Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the Company has not paid any remuneration to its directors during the year. The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are required to be commented upon by us.
For B S R & Co. LLP
Chartered Accountants Firm's Registration No.:101248W/W-100022
Jaclyn Desouza
Partner
Place: Mumbai Membership No.: 124629
Date: 27 May 2024 ICAI UDIN:24124629BKGUNX7788
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