TO THE MEMBERS OF ADVANI HOTELS & RESORTS (INDIA) LIMITED
Report on the Financial Statements
We have audited the accompanying financial statements of ADVANI HOTELS & RESORTSINDIA LIMITED ("the Company") which comprise of Balance Sheet as at 31st March2017 the Statement of Profit and Loss and the Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
The Company's Board of Directors is responsible for the matters stated in Section134(5) of the Companies Act 2013 ("the
Act") with respect to the preparation of these financial statements that give atrue and fair view of the financial position financial performance and cash flows of theCompany in accordance with the accounting principles generally accepted in Indiaincluding the Accounting Standards specified under the Section 133 of the Act read withRule 7 of the Companies (Accounts) Rules 2014 and the Companies (Accounting Standards)Amendment Rules 2016. This responsibility also includes maintenance of adequateaccounting records in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting frauds and other irregularities;selection and application of appropriate accounting policies; making judgments andestimates that are reasonable and prudent; and design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theaccuracy and completeness of the accounting records relevant to the preparation andpresentation of the financial statements that give a true and fair view and are free frommaterial misstatement whether due to fraud or error.
Our responsibility is to express an opinion on these financial statements based on ouraudit.
We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder. We conducted our audit in accordancewith the Standards on Auditing specified under Section 143(10) of the Act. Those Standardsrequire that we comply with the ethical requirements and plan and perform the audit toobtain reasonable assurance about whether the financial statements are free of materialmisstatement. An audit involves performing procedures to obtain audit evidence about theamounts and disclosures in the financial statements.
The procedures selected depend on the auditor's judgment including the assessment ofthe risks of material misstatement of the financial statements whether due to fraud orerror. In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the financial statements that give a true andfair view in order to design audit procedures that are appropriate in the circumstancesbut not for the purpose of expressing an opinion on whether the Company has in place anadequate internal financial controls system over financial reporting and the operatingeffectiveness of such controls. An audit also includes evaluating the appropriateness ofthe accounting policies used and the reasonableness of the accounting estimates made bythe Company's Directors as well as evaluating the overall presentation of the financialstatements.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the financial statements.
In our opinion and to the best of our information and according to the explanationsgiven to us the financial statements give the information required by the Act in themanner so required and give a true and fair view in conformity with the accountingprinciples generally accepted in India of the state of affairs of the Company as at 31stMarch 2017 and its profit and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure "A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.
2. 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 bestof our knowledge and belief were necessary for the purpose of our audit.
(b) In our opinion proper books of account as required by law have been kept by theCompany so far as appears from our examination of those books.
(c) The Balance Sheet the Statement of Profit and Loss and the Cash Flow Statementdealt with by this report are in agreement with the books of account.
(d) In our opinion the aforesaid financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules. 2014 and the Companys (Accounting Standard) Amendment Rules 2016.
(e) On the basis of written representations received from the directors as on 31stMarch 2017 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2017 from being appointed as a director in terms of Section164 (2) of the Act.
(f) Our report on adequacy of internal financial controls over financial reporting ofthe Company and the operating effectiveness of such controls is given in Annexure"B".
(g) With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies
(Audit and Auditors) Rules 2014 in our opinion and to the best of our information andaccording to the explanations given to us: (i) The Company has disclosed the impact ofpending litigations on its financial position in its financial statements ReferNote 26 (m) to the financial statements.
(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses.
(iii) There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
(iv) The Company has provided requisite disclosures in the financial statements as tothe holdings as well as dealings in Specified Bank Notes during the period from 8thNovember 2016 to 30th December 2016 and the same are in accordance with the books ofaccounts maintained by the Company. Refer Note 17.2 to the financial statements.
ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT
The Annexure referred to in paragraph 1 under Report on Other Legal andRegulatory Requirements' in our report of even date to the members of ADVANI HOTELS &RESORTS (INDIA) LIMITED for the year ended 31st March 2017. We report that:
1. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(b) Some of the fixed assets were physically verified during the year by the managementin accordance with a phased programme of verification which in our opinion provides forphysical verification of all the fixed assets at reasonable intervals. No materialdiscrepancies between the books records and physical inventory have been noticed.
(c) According to the records of the Company examined by us and the information andexplanations given to us the title deeds of immovable properties are held in the name ofthe company.
2 In our opinion physical verification of inventories has been conducted by themanagement at reasonable intervals. The discrepancies noticed on such verification by themanagement have been properly dealt with in the books of account.
3 The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the Register maintained undersection 189 of the Act hence clause 3 (iii) (a) 3 (iii) (b) and 3 (iii) (c) of the Orderare not applicable to the Company.
4 The Company has not given any loans or made investments or issued any guarantee orprovided any security covered under section 185 and 186 of the Act hence clause 3 (iv) ofthe Order is not applicable to the Company.
5 The Company has not accepted any deposits from the public within the meaning ofSection 73 to 76 of the Act and the rules framed there under. We are informed that theCompany Law Board or National Company Law Tribunal or Reserve Bank of India or any courthas not passed any Order.
6 The maintenance of cost records has not been prescribed for any of the activities ofthe of the Company under sub-section (1) of section 148 of the Act.
7 (a) According to the records of the Company the Company is generally regular indepositing with appropriate authorities undisputed statutory dues including providentfund employees' state insurance income-tax sales-tax service tax customs duty exciseduty value added tax cess and other material statutory dues applicable to it. Accordingto the information and explanations given to us there are no arrears of undisputedamounts payable in respect of above statutory dues which were outstanding as on the lastday of the financial year for a period of more than six months from the date they becamepayable.
(b) According to the information and explanations given to us there are no cases ofnon-deposit with appropriate authorities of disputed dues of income-tax sales-taxservice tax customs duty excise duty value added tax or cess except the following:
|Name of the statute ||Nature of dues ||Amount (Rs in lakhs) ||Period to which the amount relates ||Forum where the dispute is pending |
|Income-tax Act 1961 ||Income-tax on completion of regular assessment ||89.13 ||Asst Year 2012-13 ||Commissioner of Income-tax (Appeals) |
|Income-tax Act 1961 ||Income-tax on assessment of TDS (after rectification) ||2.57 ||Asst Years 2005-06 to 2008-09 ||Commissioner of Income-tax (Appeals) |
|Customs Act 1962 ||Differential duty on equipment imported under EPCG Scheme and Penalty ||42.60 ||2000 ||Customs Excise and Service Tax Appellate Tribunal |
| || ||49.60 Plus Interest || || |
|The Finance Act 1994 ||Service tax ||32.63 Plus Interest ||2011 to 2015 ||Customs Excise and Service Tax Appellate Tribunal |
8. According to the records of the Company examined by us and the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings dues to banks. The Company has not taken any loan from any financialinstitution or from government and by way of issue of debentures.
9. In our opinion on an overall basis and according to the information and explanationsgiven to us the term loans were applied for the purpose for which the loans wereobtained. The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year.
10. During the course of our examination of the books of account and records of theCompany carried out in accordance with the generally accepted auditing practices in Indiaand according to the information and explanations given to us we have neither come acrossany instances of fraud by the Company or any fraud on the Company by its officers andemployees was noticed or reported during the year nor have we been informed of any suchinstance by the management.
11. According to the records of the Company examined by us and the information andexplanations given to us managerial remuneration has been paid / provided by the Companyin accordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.
12. The Company is not a Nidhi Company hence our comments as required under clause 3(xii) of the Order are not given. 13. In our opinion and according to the records of theCompany examined by us and the information and explanations given to us the transactionsentered into by the Company during the year with related parties are in compliance withthe provisions of Section 177 and 188 of the Act where applicable and the details thereofhave been disclosed in the Financial Statements etc. as required by the applicableaccounting standards.
14. According to the information and explanations given to us. the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Therefore clause 3 (xiv) of the Order is not applicable tothe Company.
15. According to the records of the Company examined by us and the information andexplanations given to us the Company has not entered into any non-cash transactionsreferred to in section 192 of the Act with directors of the Company or persons connectedwith them during the year.
16. According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.
ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
The Annexure referred to in paragraph 2 (f) under "Report on Other Legal andRegulatory Requirements" in our report of even date to the members of ADVANI HOTELS& RESORTS INDIA LIMITED for the year ended 31st March 2017. We report that: We haveaudited the internal financial controls over financial reporting of Advani Hotels &Resorts (India) Limited ("the Company") as of 31st March 2017 in conjunctionwith our audit of the financial statements of the Company for the year ended on that date.
Management's Responsibility for Internal Financial Controls
The Company's management is responsible for establishing and maintaining internalfinancial controls based on the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Act.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls both applicable to an audit of Internal Financial Controlsand both issued by the Institute of Chartered Accountants of India. Those Standards andthe Guidance Note require that we comply with ethical requirements and plan and performthe audit to obtain reasonable assurance about whether adequate internal financialcontrols over financial reporting was established and maintained and if such controlsoperated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls Over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditure of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at 31st March 2017 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
| ||For J.G.VERMA & CO. |
| ||Chartered Accountants |
| ||(Registration No.111381W) |
| ||J.G.VERMA |
|Place: Mumbai ||Partner |
|Mumbai: 23rd May 2017 ||Membership No. 5005 |