Companies

8K Miles management, auditors lock horns

Our Bureau Chennai | Updated on November 04, 2019

Promoters of the Chennai-based firm resigned on Saturday

The management of the city-based 8K Miles Software Services Ltd and its auditors Deloitte Haskins & Sells LLP are engaged in a tussle over the audit of the standalone and consolidated financial statements of 8K Miles for the year ended 31 March 2019.

The audit firm in its 21-page report said that it came across certain transactions that raised suspicions that offences involving fraud have been committed. The company gave rejoinder to each and every point that was raised by Deloitte, and submitted to the Bombay Stock Exchange.

The BSE and NSE had earlier announced the suspension of the company’s shares from Monday (November 4) for not disclosing the FY19 results as scheduled.

RS Ramani and Gurumurthi Jayaraman, promoter directors of 8K Miles Software Services resigned on Saturday from the company. The company board, which met to consider the quarter and annual results for the period ended March 2019, accepted the resignations.

8K Miles Software Services’ auditor, Deloitte Haskins and Sells, in an audited results note said that it had informed the Central government about the suspected fraud in the company.

In its observations, Deloitte said there were several instances of inconsistencies between declarations provided by Directors and information available in the public forum, which demonstrated the existence of probable related parties that were not disclosed previously. This includes certain transactions which were not disclosed or approved by the Audit Committee/Board of Directors.

However, the company responded stating that the Directors have provided the appropriate documents as required under the law and there are no related parties, which were undisclosed.

In another objection, the audit firm pointed out several instances of inconsistencies between the initial bank statements and the subsequent bank statements provided for verification in certain subsidiaries. However, the company rebutted stating that the subsidiary accounts have been audited by the auditor in the domicile of subsidiary and not reported any such inconsistencies.

Deloitte added that transactions with certain customers, wherein the company was not able to provide it 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 customer.

However, the company said that the proper time sheets and nature of the services rendered were submitted to the audit team during the audit along with the acknowledgement received from such customers.

Confirmation 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.

Published on November 04, 2019

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