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Balaji Hotels & Enterprises Ltd.

BSE: 530471 Sector: Others
NSE: BALAJHOTEL ISIN Code: INE454A01011
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Balaji Hotels & Enterprises Ltd. (BALAJHOTEL) - Auditors Report

Company auditors report

INDEPENDENT AUDITORS' REPORT TO THE MEMBERS OF BALAJI HOTELS AND ENTERPRISES LTD

I. Report on the Financial Statements

We have audited the accompanying financial statements of BALAJI HOTELS &ENTERPRISES LTD (the "Company") which comprise the Balance Sheet as at March31 2015 Statement of Profit and Loss and Cash Flow Statement for the year then endedand a summary of significant accounting policies and other explanatory information theyear then ended.

II. 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 ofthese financial statements that give a true and fair view of the financial positionfinancial performance and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Accounting Standards specified undersection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe preparation of the Act for safeguarding the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgements and estimates that are reasonable and prudent; anddesign implementation and maintenance of adequate internal financial controls that wereoperating effectively for ensuring the accuracy and completeness of the accountingrecords relevant to the preparation and presentation of the financial statements thatgive a true and fair view and are free from material misstatement whether due to fraud orerror.

III. Auditors' Responsibility

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 there under.

We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Those Standards require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetherthe financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts anddisclosures in the financial statements. The procedures selected depend on the auditor'sjudgement including the assessment of the risks of material misstatement of the financialstatements whether due to fraud or error. In making those risk assessments the auditorconsiders internal financial control relevant to the Company's preparation of thefinancial statements that give a true and fair view in order to design audit proceduresthat are appropriate in the circumstances but not for the purpose of expressing anopinion on whether the Company has in place an adequate internal financial control systemover financial reporting and the operating effectiveness of such controls. An audit alsoincludes evaluating the appropriateness of the accounting policies used and thereasonableness of the accounting estimates made by the Company's Directors as well asevaluating the overall presentation of the financial statements.

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

IV. Basis for Qualified Opinion:

The Company has borrowed Rs. 15.12 crores at 12% interest per annum. For its failure toservice the loan the creditor has filed suit for recovery. The Company has not providedforthe annual interest of Rs. 1.81 Croresand the accumulated interest of Rs. 22.63 Crores.

Non Provision for such an enforceable liability is against fundamental accountingprinciple of accrual and prudence. An amount of Rs. 22.63 Crores would have been requiredto increase the unsecured creditors and accordingly the unsecured creditors would haveincreased by Rs. 22.63 Crores the loss for the year would have been higher by Rs. 1.81Crores and the Share holders funds would have decreased by Rs. 22.63Crores.

V. Qualified Opinion:

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters as described in 'Basis for QualifiedOpinion' paragraph above the accompanying financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2015 its Loss and its Cash Flows for the year ended on that date;

VI. Report on Other Legal and Regulatory Requirements

1. As required by 'the Companies (Auditor's Report) Order 2015 ("the Order") issued by the Central Government in terms of section 143(11) of the Act we give inAnnexure a statement on matters specified in paragraph 3 and 4 of the said order.

2. As required by Section 143(3) of theAct 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) Except for the effects of the matter described in the Basis for QualifiedOpinion paragraph above in our opinion proper books of account as required by law havebeen kept by the Company so far as it 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.

(e) The matter described in the Basis for Qualified Opinion paragraph above in ouropinion may have an adverse effect on the functioning in the Company.

(f) On the basis of the written representations received from the directors as on 31stMarch2015 taken on record by the Board of Directors none of the directors aredisqualified as on 31st March2015 from being appointed as a director in terms of section164(2) of the Act.

(g) 77Rse qualification relating to maintenance of accounts and other mattersconnected therewith are as stated in the Basis for Qualified Opinion paragraph.

(h) 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 of pending litigations on its financialposition in its financial statements;

(ii) The Company did not have any long-term contracts including derivative contractsfor which there were any material foreseeable losses;

(iii) There were no amounts which were required to be transferred to the InvestorEducation and Protection Fund by the Company.

For PA REDDY & CO For CNGSN & ASSOCIATES
Chartered Accountants Chartered Accountants
Registration No: 007368S Registration No; 004915S
P ASHOK REDDY C N GANGADARAN
Partner Partner
Membership No: 023202 Membership No: 011205
Place: Chennai
Date : May 29 2015

ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT OF BALA JI HOTELS AND ENTERPRISES LIMITED

Based on the information and explanations furnished to us and the books and recordsexamined by us in the normal course of our audit we report that to the best of ourknowledge and belief:

i. In respect of fixed assets:

a) The company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.

b) We are informed that during the year the fixed assets have been physically verifiedby the management. In our opinion physical verification has been conducted at reasonableintervals having regard to the size of the company nature and value of its assets. Nomaterial discrepancies were noticed on such verification.

ii. In respect of inventories;

The Company being neither a trading nor a manufacturing concern holding of inventoriesat any point of the year does notarise.

iii. In respect of loans secured or unsecured granted to companies firms or otherparties covered in the register maintained under section 189 of the Companies Act 2013;

The Company has not granted any loans to any Company firm or other parties covered inthe register maintained under section 189 of the Companies Act 2013

iv. In respect of internal control procedures

There is adequate Internal Control System commensurate with the size of the company andthe nature of its business for the purchase of inventories fixed assets and sale of goodsand services. Further on the basis of our examination of the books and records of theCompany and according to the information and explanations given to us we have neithercome across nor have been informed of any continuing failure to correct major weaknessesin the aforesaid internal control system.

v. In respect of deposits accepted by the Company:

The Company has not accepted any deposits. Therefore the provisions of section 73 and76 of the Companies Act 2013 and the Companies (Acceptance of Deposits) Rules 2014 withregard to the deposits accepted from the public and from the members are not applicable tothe Company

vi. In respect of cost records:

In our opinion and according to the information and explanations given to us therequirement for maintenance of cost records pursuant to the Companies (Cost Records andAudit) Rules 2014 specified by the Central Government of India under Section 148 of theCompanies Act 2013 are not applicable to the Company for the year under audit.

vii. In respect of statutory dues:

a) The Company has been generally regular in depositing undisputed dues of ProvidentFund Investor Education and Protection Fund Employees State Insurance Income Tax SalesTax Wealth Tax Service Tax Customs Duty Excise Duty Cess and other applicableStatutory dues with the appropriate authorities during the year.

b) In respect of Income Tax Sales Tax Service tax Customs duty Excise duty or ValueAdded Tax or cess there are no undisputed amounts outstanding as at March 312015 for aperiod of more than six months from the date they became payable.

c) The details of dues of income tax / wealth tax which have not been deposited due todisputes are as under:

Period to which the Demand relates (Assessment Year) Disputed Tax Rs Lakhs Forum where the dispute is pending
1990-91 to 1993-94 (wealth tax) 58.08 High Court Chennai
2008-09 (Income tax) 1693.44 Commissioner of Income Tax Chennai

viii. In respect of losses:

The accumulated losses of the Company as adjusted after taking in to account thequalifications in the audit report to the extent the qualifications are quantified aremore than 50% of its net worth. The company has not incurred cash losses during thefinancial year covered by our audit and in the preceding financial year.

ix. In respect of repayment of dues to financial institutions banks and / or debentureholders: During the year there were no dues to debentures holders banks and / orfinancial institutions.

x. In respect of guarantees given by the Company for the loan taken by others frombanks or financial institutions:

During the year the company has not given any guarantees for the loans taken by othersfrom banks and financial institutions.

xi. In respect of utilization of term loans:

The company has not raised any Term Loans.

xii. In respect of frauds:

In our opinion and according to the information and explanation given to us no fraudon or by the Company has been noticed or reported during the year that causes thefinancial statements to be materially misstated

For PA REDDY & CO For CNGSN & ASSOCIATES
Chartered Accountants Chartered Accountants
Registration No: 007368S Registration No: 004915S
P ASHOK REDDY C N GANGADARAN
Partner Partner
Membership No: 023202 Membership No: 011205
Place: Chennai
Date : May 29 2015

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