We have audited the accompanying Standalone financial statements of KHFM Hospitality & Facility Management Services
Ltd (“the Company”), which comprises of the Balance Sheet as at 31st March, 2025, and the Statement of Profit and Loss
(including Other Comprehensive Income), the Cash Flow Statement and the Statement of Changes in Equity for the year
then ended, and notes to the standalone financial statements, including a summary of the significant accounting policies and
other explanatory information^ hereinafter referred to as “the Standalone financial statements”)
In our opinion and to the best of our information and according to the explanations given to us, the aforesaid standalone
financial statements give the information required by the Companies Act,2013 (“the act”) in the manner so required and
give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of
the Company as at 31st March, 2025, and its profit (including other comprehensive income), its cash flows and the changes
in equity for the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the standards on Auditing (SAs) specified under Section 143(10) of the Act.
Our responsibilities under those SAs are further described in the 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 provision of the Act and the Rules there under, and we have fulfilled our
other ethical responsibilities in accordance with these requirements and the Code of Ethics. We believe that the audit
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion on standalone financial statements.
Emphasis of Matter
We draw attention to -
a) Note 30 of Standalone Financial Statements. The Company is exposed to various laws and regulations.
Consequently, provisions and contingent liabilities disclosures may arise from direct and indirect tax
proceedings, legal proceedings including employment/labour claims and other government regulatory matters.
The company assesses the need to make provisions or to disclose a contingent liability on case-to-case basis
considering the underlying facts of each litigation. As at 31st March, 2025, the Company has ascertained
contingent liabilities of Rs. 3,040.54 lakhs which includes disputed Service tax, GST, ESIC, Income Tax
liabilities and bank guarantees. The eventual outcome of the litigations may remain uncertain and estimation at
balance sheet date for ascertained/unascertained liabilities involves extensive judgement of management
including input from legal counsel due to complexity of each litigation. But considering the facts of the case, the
company and the tax advisors believe that the outcome should be in the favor of the company for its ascertained
contingent liabilities.
b) Note 39 of Standalone Financial Statements- Balances of certain trade receivables, trade and other payables
(including payables to micro, small and medium enterprises, capital creditors), and loans & advances are subject
to third party confirmations. The management is confident that this process will not have any material impact on
the financial statements.
c) Note 11 of Standalone Financial Statements- Contract Assets disclosed in the standalone financial results, where
there is an area of enhanced professional judgment relating to the recoverable work in progress (Contract Assets)
amounting to Rs. 3911.04 lakhs representing the value of work completed but are pending to be billed on
completion of billing milestones as on 31st March 2025. Recognition of unbilled revenue and related contract
assets depends on various factors and judgements, contractual commitments, shifts in the scope of work, client-
induced delays, negotiation processes, and modifications to the billing cycle period including few of those which
are awaiting final confirmations with clients of the company.
While we note that the recoverability of such assets is subject to future outcome, we consider this to be an area
of enhanced professional judgment due to the materiality of the amount. The management has represented that
these balances are fully recoverable based on the progress of underlying projects. However, requisite provisions
have been made against the same.
d) Note 26 & Note 11 of Standalone Financial Statements. The recording system regard to site expenses and related
site advances needs advancement to ensure completeness and relevant transaction trail. However, according to
the management estimates, the said transactions are fairly stated in the financial statements.
Our Opinion is not modified in respect of aforesaid Matters.
Key Audit Matters
Key audit matters (‘KAM’) are those matters that, in our professional judgment, were of most significance in our audit of
the standalone financial statements of the current period. These matters were addressed in the context of our audit of the
standalone financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion
on these matters.
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The key audit matters
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How our audit addressed the key audit matter
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Revenue recognition
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Revenue recognition was identified as key Audit Matter
since-
• There is an inherent risk around the accuracy and
existing of revenues recognized considering the
customized and complex nature of these contracts.
• Application of Revenue Recognition accounting
standard (Ind As 115 - Revenue from contracts with
customers) is complex and involves a number of
key judgements and estimates in mainly identifying
performance obligations, related transaction price
and estimating the future cost to completion of these
contracts, which is used to determine the percentage
of completion of the relevant performance
obligation.
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Our Audit Procedures on revenue recognized from fixed
price contracts included:
• Obtained an understanding of the systems, process
and controls implemented by the management for
recording and computing revenue and the
associated contract assets.
• On selected specific/statistical samples of contracts,
we tested that the revenue recognized is in
accordance with the revenue recognition
accounting standard.
• We selected a sample of continuing and new
contracts and performed the following procedures:
> We read the agreements with the customers
to identify the distinct performance
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• Due to large variety and complexity of contractual
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obligations, the transaction price and its
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terms, significant judgements are required to
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allocation to the performance obligations in
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estimate the amounts. If the actual amount differs
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the contract and the classification of the
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from the amount estimated, this will have an impact
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contract for the basis of revenue
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on the the revenue recognized in the current period.
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recognition in accordance with Ind As 115.
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• These contracts may involve onerous obligations
which requires critical assessment of foreseeable
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> For Fixed maintenance contracts, we
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losses to be made.
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verified the period of the contract with the
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• As at March 31st, 2025, contract assets of
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customer agreements and the determination
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business operation comprises of Rs. 3911.04 lacs.
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of the revenue. We verified if the revenue
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Recoverability of certain contract
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was recognized appropriately over the
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assets are impacted due to several factors like
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period of contract of services being
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the customer profile, delays in completion
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rendered and whether the revenue
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certification in certain projects due to long
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recognized was based on the estimate of the
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project tenure and project disputes and financial
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amount of consideration to which the
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ability of the customers, etc. The assessment of the
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Company is entitled in exchange for
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impairment of such contract assets requires
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transferring the services.
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significant management judgement.
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> For Fixed price contracts, we have verified
the measurement of revenue for the extent
of delivery of performance obligations with
the actual and estimated cost of efforts as
per the projected budgets.
• Evaluated the identification of performance
obligations and the prescribed transaction.
• Tested the management’s computation of the
estimation of contract costs and onerous
obligations, if any.
• We performed analytical procedures as applicable
for reasonableness of revenues disclosed and
service offerings.
• We:
> Assessed that the estimates of costs to
complete were reviewed and approved by
appropriate designated management
personnel;
> Performed a retrospective analysis of costs
incurred with estimated costs to identify
significant variations and verified whether
those variations are required to be
considered in estimating the remaining
costs to complete the contract; and
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> Inspected underlying documents and
performed analytics to determine
reasonableness of contract costs.
• Our audit procedures included the following:
> We evaluated the Company processes and
controls relating to the monitoring of trade
receivables and review of credit risks of
customers. We assessed the design and
tested the operating effectiveness of
relevant controls in relation to the process
adopted by management for testing the
impairment of these contract assets.
> As a part of substantive audit procedures,
we tested the ageing of contract assets. We
examined the Our audit procedures
included the following and ability to repay
the debt based on historical payment trends
and the reason for delay in collection of
trade receivables including any project
disputes. Further, we assessed the expected
credit loss impairment and the receipts and
certification after year-end. We assessed the
disclosures on the contract assets in Note 11
of financial statements.
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Allowance for doubtful debts/ Provision for Expected Credit Loss
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Allowance for doubtful debts was identified as key Audit
Matter since-
• Receivables comprise a significant portion of the liquid
assets of the Company.
• There is an inherent risk around the accuracy of the
company’s trade receivables being appropriately
provided for, particularly in cases where resolution is in
progress.
• The estimation of the allowance for trade receivables is
a significant judgement area and accordingly is
therefore considered a key audit matter.
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• We assessed the validity of material long
outstanding receivables by considering, past
payment history and unusual patterns to identify
potentially impaired balances.
• The assessment of the appropriateness of the
allowance for trade receivables comprised a
variety of audit procedures including:
> Verifying the appropriateness and
reasonableness of the assumptions applied
in the management’s assessment of the
receivables allowance.
> To address the risk of management bias, we
evaluated the results of our procedures
against audit procedures on other key
balances to assess whether or not there was
an indication of bias.
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Information other than Financial Statements and Auditor’s Report thereon
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 standalone financial statements
and our auditor’s report thereon. The Annual Report is expected to be made available to us after the date of this Auditor’s
Report.
Our opinion on the standalone financial statements does not cover the other information and we do not express any form of
assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility is to read the other information and,
in doing so, consider whether the other information is materially inconsistent with the standalone financial statements or
our knowledge obtained in the audit or otherwise appears to be materially misstated.
When we read the Annual Report, If, we conclude that there is a material misstatement therein, we are required to
communicate the matter to those charged with governance and take necessary actions as applicable under the relevant laws
and regulations.
Management’s Responsibility for the Standalone Financial Statements
The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 with
respect to the preparation of these standalone financial statements that give a true and fair view of the financial position,
financial performance including other comprehensive income, cash flows and changes in equity of the Company in
accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS)
prescribed under section 133 of the Act. This responsibility also includes maintenance of adequate accounting records in
accordance with the provisions of the Act for safeguarding the assets of the Company and for preventing and detecting
frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates
that are reasonable and prudent; and design, implementation and maintenance of adequate internal financial controls, that
were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation
and presentation of the standalone financial statements that give a true and fair view and are free from material misstatement,
whether due to fraud or error.
In preparing the standalone financial statements, management and Board of Directors are responsible for assessing the
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 management either intends to liquidate the Company or to cease operations, of
has no realistic alternative but to do so.
Board of Directors are also responsible for overseeing the company’s financial reporting process.
Auditor’s Responsibility
Our objectives are to obtain reasonable assurance about whether the standalone financial statements as a whole are free
from material misstatement, whether due to fraud of error, and to issue an 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
of error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient
and appropriate to provide a basis for our opinion. The risks of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omission,
misrepresentation, of the override of internal control.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are
appropriate in the circumstance. Under Section 143(3)(i) of the Act, we are also responsible for expressing our
opinion on whether the company has adequate internal financial control with reference to standalone financial
statements in place and the operating effectiveness of such controls.
• Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related
disclosures made by management and Board of Directors.
• Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the
audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast
significant doubt on the company ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the standalone financial
statements or, if such disclosers are inadequate, to modify our opinion. Our conclusions are based on the audit
evidence obtained up to the date of our 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 transaction and events in a
manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the standalone financial statements that, individually or in aggregate make
it probable that the economic decision of a reasonably knowledgeable user of the financial statements may be influenced.
We consider quantitative materiality and qualitative factors in (i) planning the scope of our audit work and in evaluating the
results of our work and (ii) to evaluate the effect of any identified misstatements in the standalone financial statements.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the
audit and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought
to bear on our independence, and where applicable, related safeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most
significance in the audit of the standalone financial statements of the currents period and are therefore the key audit matter.
We describe these matters in our 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.
Other Matters
a. The standalone financial statements of the company for the year ended March 31st, 2024 were audited by another
auditor who expressed an unmodified opinion on those statements as on 30th May 2024.
b. The figures for the previous periods / year are re-classified / re-arranged / re-grouped by the Management of the
Company to make them comparable with current period.
Our Opinion is not modified in respect of aforesaid Other Matters.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (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 to the extent applicable that:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and
belief were necessary for the purposes of our audit.
b) In our opinion, proper books of account as required by law have been kept by the Company so far as it
appears from our examination of those books.
c) The Standalone financial statements dealt with by this Report are in agreement with the relevant books of
account.
d) In our opinion, the aforesaid standalone financial statements comply with the Indian Accounting Standards
prescribed under section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.
e) On the basis of the written representations received from the directors as on 31 st March 2025 taken on record
by the Board of Directors, none of the directors is disqualified as on 31st March, 2025 from being appointed
as a director in terms of Section 164(2) of the Act.
f) The modifications relating to the maintenance of accounts and other matters connected therewith are as
stated in the paragraph 2B(f) below on reporting under Rule 11(g) of the Companies (Audit and Auditors)
Rules, 2014.
g) With respect to the adequacy of the internal financial controls over financial reporting of the Company, and
the operating effectiveness of such controls, refer to our separate Report in “Annexure B”
B. With respect to the other matters to be included in the Auditor’s Report in accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information
and according to the explanations given to us:
a. The Company has disclosed the impact of pending litigation as at 31st March 2025 on its financial
position in its standalone financial statements- Refer Note 30 of the standalone financial statements.
b. The Company has made provision, as required under the applicable law or accounting standards,
for material foreseeable losses, if any. The Company did not have any long-term derivative
contracts.
c. There has been no delay in transferring amounts, required to be transferred, to the Investor Education
and Protection Fund by the Company.
d. i. The Management has represented that, to the best of its knowledge and belief, no funds have been
advanced or loaned or invested (either from borrowed funds or share premium or any other sources
or kind of funds) by the Company to or in any other person(s) or entity(ies), including foreign
entities ("Intermediaries"), with the understanding, whether recorded in writing or otherwise, that
the Intermediary shall, whether, directly or indirectly lend or invest in other persons or entities
identified in any manner whatsoever by or on behalf of the Company ("Ultimate Beneficiaries")
or provide any guarantee, security or the like on behalf of the Ultimate Beneficiaries;
ii. The Management has represented that, to the best of its knowledge and belief, no funds have been
received by the Company from any person(s) or entity(ies), including foreign entities ("Funding
Parties"), with the understanding, whether recorded in writing or otherwise, that the Company
shall, whether, directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding Party ("Ultimate Beneficiaries") or provide any
guarantee, security or the like on behalf of the Ultimate Beneficiaries. Based on reasonable audit
procedures adopted by us, nothing has come to our notice that such representation contains any
material misstatement.
iii Based on the audit procedures performed that have been considered reasonable and appropriate in
the circumstances, nothing has come to our notice that has caused us to believe that the
representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (i) and (ii) above,
contain any material misstatement
e. As stated in Note 54 of the standalone financial statements, the Board of Directors of the Company
have not declared or recommended any dividend for the financial year ended March 31, 2025.
f. Based on our examination, which included test checks, the Company has used accounting software
systems for maintaining its books of account for the financial year ended March 31st, 2025 which
has the feature of recording audit trail (edit log) facility and the same has operated throughout the
year for all relevant transactions recorded in the software systems. Further, during the course of our
audit we did not come across any instance of the audit trail feature being tampered with and the
audit trail has been preserved by the Company as per the statutory requirements for record retention.
C. With respect to the matter to be included in the Auditor’s Report under Section 197(16) of the Act:
In our opinion and according to the information and explanations given to us, the remuneration paid by the
Company to its directors during the current year is in accordance with the provisions of Section 197 of the
Act. The remuneration paid to any director is not in excess of the limit laid down under Section 197 of the Act
The Ministry of Corporate Affairs has not prescribed other details under Section 197(16) of the Act which are
required to be commented upon by us.
For YRKDAJ and Associates LLP
Chartered Accountants
Firm Registration No.: W100288
Rohit Teli
Partner
Membership No. 155581
UDIN : 25155581BMIHXP2979
Place: Mumbai
Date: 18th June, 2025
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