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Arambhan Hospitality Services Ltd.

BSE: 539403 Sector: Services
NSE: N.A. ISIN Code: INE800S01017
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OPEN 41.00
CLOSE 41.00
VOLUME 5000
52-Week high 51.50
52-Week low 17.35
P/E
Mkt Cap.(Rs cr) 21
Buy Price 38.25
Buy Qty 5000.00
Sell Price 42.00
Sell Qty 5000.00

Arambhan Hospitality Services Ltd. (ARAMBHANHOSPIT) - Auditors Report

Company auditors report

INDEPENDENT AUDITORS' REPORT

To

The Board of Directors

Arambhan Hospitality Services Ltd

(formerly known as Cawasji Behramji Catering Services Ltd)

Report on the Standalone Financial Statements

1. We have audited the accompanying Standalone financial statement of ArambhanHospitality Services Ltd (formerly known as Cawasji Behramji Catering Services Ltd)("the company") which comprises the Balance Sheet as at 31 March 2017 theStatement of Profit and Loss the Cash Flow Statement for the year then ended and asummary of significant accounting policies and other explanatory information.

Management's Responsibility for the Standalone Financial Statements

2. The Company's Board of Directors is responsible for the matters stated in thesection 134(5) of the Companies Act 2013 ("the Act") with respect to thepreparation of these financial statements that give a true and fair view of the financialposition financial performance and cash flows of the Company in accordance with theaccounting principles generally accepted in India including the Accounting Standardsspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.

This responsibility also includes the maintenance of adequate accounting records inaccordance with the provision of the Act for safeguarding the assets of the Company andfor preventing and detecting the frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditor's Responsibility

3. Our responsibility is to express an opinion on these standalone financial statementsbased on our audit.

4. 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 there under and the Order under section 143 (11)of the Act.

5. We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act and other applicableauthoritative pronouncements issued by The Institutes of Chartered Accountant of India.Those Standards and pronouncements require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether the financialstatements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amountsand disclosures in the financial statements. The procedures selected depend on theauditor's judgment including the assessment of the risks of material misstatement of thefinancial statements whether due to fraud or error. In making those risk assessments theauditor considers internal financial control relevant to the Company's preparation of thefinancial statements that give true and fair view in order to design audit procedures thatare appropriate in the circumstances. An audit also includes evaluating theappropriateness of accounting policies used and the reasonableness of the accountingestimates made by Company's Directors as well as evaluating the overall presentation ofthe financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone financial statements.

Basis for Qualified Opinion

8. The Company has recognized the Employees benefits of Rs. 396547/- and Rs.116058/-towards Gratuity and Leave Encashment. In absence of actuarial valuation reportas required by AS-15 Employee Benefits (Revised) as on 31st March 2017 we are unable tocomment on the adequacy of provision as required for the same.

9. Investment includes Investment made by the Company having carrying value of Rs.100000/- and Loans and Advances includes under the sub head of Loan Rs. 4491084/- towholly owned subsidiary of the Company as on 31st March 2017. As per certified trialbalance provided by the Management as on 31.03.2017 the net worth of the wholly ownedsubsidiary is negative by Rs. 4586514/-. In view of absence of future cash flows of thewholly owned subsidiary the same requires provision towards impairment. In view of thesame if due provision was made expenses would be higher by Rs.4586514/- and loss forthe year would have been higher by Rs.4586514/- with the consequential effect oninvestments long term loans and advances and shareholder's funds with consequent effecton cash flow statement for a like amount.

10. Sundry debtors includes outstanding amount of Rs.79300660/- as at 31 March 2017(previous year Rs. 70300660/-) and Current Liabilities includes Advances given tosupplier Rs. 5540000/- against supply of material outstanding for a very long period oftime. Based on our audit assessment and procedures performed in our opinion the saidamount of Sundry Debtors and Advance to supplier are doubtful in the nature of recovery.In view of the same the management was required to provide/ accrue for the diminution invalue of the said trade receivable and advance to supplier as a result the carryingvalue of the trade receivables would have been lower by Rs 79300660/- and advances tosupplier would have been lower by Rs. 5540000/- and accordingly the loss to the Companywould have been increased by Rs. 84840660/- for the year under review.

Opinion

11. In our opinion and to the best of our information and according to the explanationsgiven to us the Statement give a true and fair view in conformity with the aforesaidAccounting Standard and other accounting principles generally accepted in India of the netLoss and other financial information of the Company for the year ended March 31 2017subject to our qualification for which basis has been given above Loss for the year endedis understated by Rs. 89427171/- advance to supplier is overstated by Rs. 5540000/-Loans and advances is overstated by Rs. 4491084/- Trade receivables are overstated byRs.79300660/- and investment is overstated by Rs. 95430/- as given.

Emphasis of Matter

12. One of the major customer of the Company M/s GOL Offshore Limited previously knownas

Great Offshore Ltd having total outstanding of Rs. 635.58 Lacs as per company books andsubject to reconciliation with the party recently the Hon'ble High Court of Bombay videits order dated May 5 2017 has issued direction for i) admission of petition forwinding-up of GOL and ii) Appointment of official liquidator as provisional liquidator.These winding up petition was filed by few lenders of the GOL offshore Limited.

13. Without qualifying our opinion we draw attention towards non-payment of undisputedstatutory dues aged more than 6 months on account of Service Tax of Rs. 312.08 Lacs TDSdefaults of Rs 40.75 Lacs. The ultimate outcome of the matter cannot presently bedetermined and no provision for any liability that may result has been made in theFinancial Statements.

Other Matters

14. The Statutory audit for the preceding financial year was not carried out by us. TheFigures numbers and details pertaining to previous year have been traced from thefinancial statements of the previous year audited by M/s Jagannath H. R. & Co.Chartered Accountants vide their report dated May 30 2016.

Report on other Legal and Regulatory Requirements

15. As required by the 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 purposes of our audit.

b) In our opinion proper books of account as required by law have been kept by theCompany so far as it appears from our examination of those books

c) The Balance Sheet the Statement of Profit and Loss and Cash Flow Statement dealtwith by this Report are in agreement with the books of account.

d) Except to the extent mentioned in our Basis of Qualified Opinion paragraph above inour opinion the aforesaid standalone financial statements comply with the AccountingStandards specified under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

e) On the basis of written representations received from the directors as on 31 March2017 taken on record by the Board of Directors none of the directors is disqualified ason 31 March 2017 from being appointed as a director in terms of Section 164(2) of theAct.

With respect to the adequacy of the internal financial controls over financialreporting of the f) company and the operating effectiveness of such controls refer to ourseparate report in Annexure A.

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 opinionand to the best of our information and according to the explanations given to us:

i. The Company has disclosed the impact if any of pending litigations as at March 312017 on its financial position in its financial statements –Refer Note No. 33 to thefinancial statement.

ii. The Company does not have any long-term contracts including derivatives contractsas at March 31 2017. iii There were no amounts which were required to be transferred tothe Investor Education and Protection fund by the Company.

iv. The Company has provided requisite disclosure in its Standalone FinancialStatements as to holdings as well as dealings in Specified Bank Notes during the periodfrom 8 November to 30 December 2016 and those are in accordance with the books ofaccounts maintained by the company .Refer to Note 30 to the Standalone FinancialStatements.

16. As required by the Companies (Auditor's Report) Order 2017 ("the Order")issued by the

Central Government of India in terms of Sub-section (11) of section 143 of the Act(hereinafter referred to as the "Order") and on the basis of such checks of thebooks and records of the Company as we considered appropriate and according to theinformation and explanations given to us we give in the Annexure B a statement on thematters specified in paragraph 3 and 4 of the Order.

For S. S. RATHI & CO.

Chartered Accountants

FRN:-108726W

(RAVI K JAGETIYA)

Partner

Membership No. 134691

Place: Mumbai

Date: 30th May 2017

TO THE MEMBERS OF

Arambhan Hospitality Services Ltd

(formerly known as Cawasji Behramji Catering Services Ltd)

Report on the Internal Financial Controls

1. We have audited the internal financial controls over financial reporting of ArambhanHospitality Services Ltd (formerly known as Cawasji Behramji Catering Services Ltd)("the Company") as of March 31 2017 in conjunction with our audit of thestandalone financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. 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 (ICAI). These responsibilitiesinclude the design implementation and maintenance of adequate internal financial controlsthat were operating effectively for ensuring the orderly and efficient conduct of itsbusiness including adherence to company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Companies Act 2013.

Auditors' Responsibility

3. 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 deemed to be prescribedunder section 143(10) of the Act to the extent applicable to an audit of internalfinancial controls both applicable to an audit of internal financial controls and bothissued by the ICAI. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the 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 judgment including the assessment of the risks ofmaterial misstatement of the financial statements whether due to fraud or error.

5. 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

6. A company's internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A company's internal financial control overfinancial reporting includes those policies and procedures that a. pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; b. provide reasonableassurance that transactions are recorded as necessary to permit preparation of financialstatements in accordance with generally accepted accounting principles and that receiptsand expenditures of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and c. 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

7. 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.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at 31 March 2017 based on "the internalcontrol over financial reporting criteria established by the Company considering theessential components of internal control stated in the Guidance Note on Audit of InternalFinancial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India"

Emphasis of Matter

We Draw attention to Note No. 39 to the financial Statements regarding certainweakness/deficiencies regarding internal control system and how the same have beenmitigated/ are proposed to be mitigated. Our report is not qualified in respect of theabove

For S. S. RATHI & CO.

Chartered Accountants

FRN:-108726W

Sd/-

(RAVI K JAGETIYA)

Partner

Membership No. 134691

Place: Mumbai

Date: 30th May 2017

Annexure B to the Independent Auditors' Report

Referred to in Paragraph 15 of the Independent Auditors Report of even date to themembers of Arambhan Hospitality Services Ltd (formerly known as Cawasji Behramji CateringServices Ltd) On the financial statements as of and for the year ended March 31 2017.

1. A) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

B) We have been informed that the major fixed assets of the company have beenphysically verified by the management according to a phased program design to cover allthe items over a period of 3 years during the year. In our opinion the company has aprogram of verification which is reasonable having regard to the size of the company andthe nature of its assets and operations and we have been informed that no materialdiscrepancies were noticed on such verification.

C) According to the information and explanation given to us and on the basis of ourexamination of the records of the Company there is no immovable properties owned by theCompany therefore requirement of this clause is not applicable.

2. We have been informed by the Management that the physical verification of Inventoryis conducted as per the preset cyclical program on Half yearly basis during the year onall the major Installations in operation and no material discrepancies were noticed. Inour opinion the frequency of such physical verification of Inventory is reasonable. Inrespect of inventory on smaller Installation a system of physical verification ofinventory as of or close to the year end is yet to be introduced.

3. The Company has not granted any loan secured or unsecured to Companies firmsLimited Liability Partnerships or other parties covered in the registered maintained underSection 189 of the Act. Therefore the provision of clause 3(iii) (iii)(a) (iii)(b) and3(iii)(c) of the order are not applicable.

4. In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities.

5. According to the information and explanations given to us the Company has notaccepted any deposit during the year and hence compliance with the provisions of Sections73 to 76 or any other relevant provisions of the Companies Act 2013 and the Companies(Acceptance of Deposits) Rules 2014 as amended with regard to the deposits accepted isnot applicable to the Company.

6. The requirement of maintenance of cost records under sub-section (1) of section 148of the act in respect of the Company's activities is not applicable to the Company.

7. A) As per the information and explanations furnished to us and according to ourexamination of the records of the Company the Company has not been generally regular indepositing undisputed statutory dues on account of Employee State Insurance ProvidentFund Profession Tax TDS Service Tax Sales Tax and Works Contract Tax where there havebeen serious delays in a number of cases as applicable to the company with the appropriateauthorities during the year. Undisputed amounts payable outstanding for a period of morethan six months from the date they became payable are as stated below:

Name of the statute Nature of Dues Amount in INR Period to which the amount relates Due Date Date of Payment
Service Tax Department Service Tax 31208885.00 Prior to 6 months as on Various Dates Not Yet Paid
31.03.2017.
Income Tax TDS Short 1793743.00 A.Y. -2016-17 Various Not Yet Paid
Act 1961 payment 1553.00 A.Y. -2015-16 Dates Not Yet Paid
118226.00 A.Y. -2014-15 Not Yet Paid
21540.00 Prior Period Not Yet Paid
Income Tax TDS Short 4802.13 A.Y. -2017-18 Various Not Yet Paid
Act 1961 Deducted 15221.91 A.Y. -2016-17 Dates Not Yet Paid
90712.10 A.Y. -2015-16 Not Yet Paid
772199.72 A.Y. -2014-15 Not Yet Paid
344668.00 Prior Period Not Yet Paid
Income Tax Interest on 252264.00 A.Y. -2016-17 Various Not Yet Paid
Act 1961 Payment 84334.50 A.Y. -2015-16 Dates Not Yet Paid
Default u/s 57213.00 A.Y. -2014-15 Not Yet Paid
201 327349.00 Prior Period Not Yet Paid
Income Tax Interest on 8464.00 A.Y. -2017-18 Various Not Yet Paid
Act 1961 Deduction 910.00 A.Y. -2016-17 Dates Not Yet Paid
Default u/s 16991.00 A.Y. -2015-16 Not Yet Paid
201 54584.00 A.Y. -2014-15 Not Yet Paid
64470.00 Prior Period Not Yet Paid
Income Tax Late Filing 34200.00 A.Y. -2016-17 Various Not Yet Paid
Act 1961 Fees 10400.00 A.Y. -2015-16 Dates Not Yet Paid
8800.00 A.Y. -2014-15 Not Yet Paid
Income Tax Interest on 1770.00 A.Y. -2016-17 Various Not Yet Paid
Act 1961 late payment 1280.00 A.Y. -2015-16 Dates Not Yet Paid
of TDS
558.00 A.Y. -2014-15 Not Yet Paid
Employees ESIC 64692 Prior to 6 Various Not Yet Paid
State months as on Dates
Insurance 31.03.2017.
Corporation
act 1948.

B) According to the information and explanations given to us and records of the Companyexamined by us there are no dues outstanding on account of dispute related to sales taxor duty of custom or duty of excise or value added tax or cess and any other statutorydues except dues of as follows

1.Service Tax involving amount of Rs. 6.39 Lacs pending at Commissioner (Appeals) ofCentral Excise Thane II & Service Tax- I Bandra Mumbai

8. According to information and explanation given to us and as per our verification ofthe records of the company the company has defaulted in repayment of its dues to banksand financial institutions during the year. Following are the details of the default daysfor the financial year 2016-17 in repayment of dues:

Bank or Financial Institution Delay upto 60 Days Delay 61-90 Days
Fullerton India Credit Company Ltd. - 477292.78
Kotak Mahindra Prime Ltd. 526123.00 -
Aditya Birla Finance Ltd. 321704.00 -
Deutsche Bank 392419.75 -
HDFC Bank 312989.00 -
Kotak Mahindra Bank Ltd. 261216.00 -
Ratnakar Bank 311109.00 -
Total 2125561.50 477292.78

9. The Company has not raised any moneys by way of initial public offer further publicoffer (including debt instruments). The term loans also not obtained by the companytherefore the clause is not applicable.

10. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor have we been informed of any such case by theManagement.

11. In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of Section 197 read with Schedule V to the CompaniesAct 2013.

12. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order is not applicable.

13. The Company has entered in to transactions with related parties in compliance withthe provisions of

Sections 177 and 188 of the Act. The details of related party transactions have beendisclosed in the financial statements as required under Accounting Standard (AS) 18—‘Related Party Disclosures' specified under Section 133 of the Act read withRule 7 of the Companies (Accounts Rules) 2014.

14. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year. Accordingly the provisions ofClause 3(xiv) of the Order are not applicable.

15. The Company has not entered into any non cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable.

16. The Company is not required to be registered under section 45- IA of the ReserveBank of India Act

1934. Accordingly the provisions of Clause 3(xvi) of the Order are not applicable tothe Company

For S. S. RATHI & CO.

Chartered Accountants

FRN:-108726W

Sd/-

(RAVI K JAGETIYA)

Partner

Membership No. 134691

Place: Mumbai

Date: 30th May 2017