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Blue Coast Hotels Ltd.

BSE: 531495 Sector: Services
NSE: BLUECOAST ISIN Code: INE472B01011
BSE LIVE 14:49 | 02 Dec 124.40 5.85
(4.93%)
OPEN

124.40

HIGH

124.40

LOW

124.40

NSE LIVE 15:05 | 02 Dec 124.95 5.25
(4.39%)
OPEN

124.95

HIGH

124.95

LOW

124.95

OPEN 124.40
PREVIOUS CLOSE 118.55
VOLUME 5
52-Week high 173.00
52-Week low 56.05
P/E 11.12
Mkt Cap.(Rs cr) 158.61
Buy Price 0.00
Buy Qty 0.00
Sell Price 124.40
Sell Qty 269.00
OPEN 124.40
CLOSE 118.55
VOLUME 5
52-Week high 173.00
52-Week low 56.05
P/E 11.12
Mkt Cap.(Rs cr) 158.61
Buy Price 0.00
Buy Qty 0.00
Sell Price 124.40
Sell Qty 269.00

Blue Coast Hotels Ltd. (BLUECOAST) - Auditors Report

Company auditors report

To the Members of Blue Coast Hotels Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of Blue Coast HotelsLimited ('the Company') which comprise the balance sheet as at 31 March 2015 thestatement of profit and loss and 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

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 preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance and cash flows of the Company inaccordance with the accounting principles generally accepted in India including theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingof the assets of the Company and for preventing and detecting frauds and otherirregularities; selection and application of appropriate accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

Auditor's Responsibility

Our responsibility is to express an opinion on these standalone financial statementsbased on our audit. We have taken into account the provisions of the Act the accountingand auditing standards and matters which are required to be included in the audit reportunder the provisions 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 andthe 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 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 controls 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 audit opinion on the standalone financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone financial statements give the information requiredby the Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31st March 2015 and its loss and its cash flows for the year ended on that date.

Emphasis of Matter

Without qualifying our opinion we draw attention to the following Notes on thefinancial statements:-

a. Note No. 9(B)(b) to the financial statements regarding the alleged auction of hotelproperty "Park Hyatt Goa Resort & Spa" by the secured lender under theprovisions of the SARFAESI Act 2002 and the same has also been challenged by the Companyin its writ petition filed before the Hon'ble Bombay High Court. The Company also filed aseparate Writ Petition before the Hon'ble High Court of Bombay Goa Bench wherein theHon'ble Court has directed the secured lender and auction purchaser to maintain the"Status Quo" in respect of hotel property and the Hotel property continues to beoperated and managed by Hyatt International as hitherto under the agreements previouslyexecuted with the Company. This event indicates a material uncertainty that may castdoubts on the company's ability to continue as a going concern.

b. Note no. 9(A)(f) regarding default by the company towards debenture holder andfiling of suit by the debenture holder.

c. Note no. 19(i) & 19(ii) regarding Notice of Recall cum revocation of Guaranteeby secured lenders of associate company and resumption of hotel site by the lesser.

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 of India in terms of sub-section (11) of section 143 ofthe Act we give in the Annexure a statement on the matters specified in the paragraph 3and 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 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 the cash flow statementdealt with by this Report are in agreement with the books of account;

(d) in our opinion the aforesaid standalone financial statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014;

(e) on the basis of the written representations received from the directors as on 31stMarch 2015 taken on record '' ^

by the Board of Directors none of the directors is disqualified as on 31st March 2015from being appointed as

a director in terms of Section 164 (2) of the Act;

(f) with respect to the adequacy of the internal financial controls over financialreporting of the company and the operating effectiveness of such controls refer to ourseparate report in annexure A; and

(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 of pending litigations on its financialposition in its financial statements Refer Note 19 to the financial statements;

ii. The Company has long-term agreement with the term lender for buy back of equityshare capital with return on investment of subsidiary company Silver Resort Hotel India(P) Limited wherein company is responsible for shortfall of amount realizable on sale ofinvestment and amount committed in the event of company failing to buy back theinvestment. The company has not made provision for foreseeable losses if any as theamount is not ascertainable;

iii. No amount was required to be transferred to the Investor Education and ProtectionFund by the Company.

For M Kamal Mahajan And Co.
Chartered Accountants
Firm's Regn. No. 006855N
M. K. Mahajan
Place : New Delhi (Partner)
Date : 30th May 2015 Membership number 017418

Annexure to the Independent Auditors’ Report of Blue Coast Hotels Limited

The Annexure referred to in our Independent Auditors' Report to the members of theCompany on the standalone financial statements for the year ended 31March 2015 we reportthat:

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

(b) As explained to us most of the fixed assets have been physically verified by themanagement during the year and no material discrepancies were noticed on suchverification. In our opinion the frequency of physical verification is reasonable havingregard to the size of the Company and the nature of its assets.

(ii) (a) As explained to us the inventory has been physically verified at reasonableintervals by the management.

(b) In our opinion the procedures of physical verification of inventories followed bythe management are reasonable and adequate in relation to the size of the company and thenature of its business.

(c) The company is maintaining proper records of inventory. The discrepancies noticedon verification between the physical stocks and the book records were not material andhave been properly dealt with in the books of accounts.

(iii) According to the information and explanations furnished to us the company hasnot granted any fresh loan secured or unsecured to companies firms or other partiescovered in the register maintained under Section 189 of the Act hence provisions of thisclause are not applicable. However old interest free unsecured loan to two wholly ownedsubsidiary companies amounting to Rs. 463.97 lacs are outstanding as on 31.3.2015.Theterms of repayment have not been stipulated.

(iv) In our opinion and according to the information and explanations given to usthere is adequate internal control system commensurate with the size of the company andthe nature of its business for the purchases of inventory and fixed assets and for thesale of goods and service. Further during the course of audit we have not come across anyinstance of major weakness in internal control.

(v) The company has not accepted any public deposits.

(vi) As explained to us the Central Government has not prescribed any cost recordsunder section (1) of section 148 of the Act for the company.

(vii) (a) As per records of the company the company in general is regular indepositing undisputed statutory dues like provident fund employees' state insurancesales-tax wealth-tax service tax duty of custom duty of excise value added tax cessand other statutory dues with the appropriate authorities. However company is not regularin depositing undisputed statutory dues like income tax and tax deducted at source and anamount of Rs. 56.58 lacs and Rs. 445.50 lacs respectively are outstanding as at the dateof the balance sheet for a period exceeding six months from the date they became payable.

(b) There is no amount in respect of Income-tax Sales-tax Wealth tax Service-taxCustoms duty cess outstanding as at 31st March 2015 due to any dispute.

(c) As per records of the company no amount was required to be transferred to theInvestor Education and Protection Fund by the Company.

(viii) The accumulated losses of the company at the end of the financial year are notmore than fifty percent of its net worth. The company has incurred cash losses during thefinancial year covered by our audit and in the immediately preceding financial year.

(ix) Based on our audit procedures and on the information and explanations given by themanagement the company has defaulted in repayment of dues to a financial institution anddebenture holder as under:

S.No. Name Nature of dues Principal Amount (Rs. in lacs) Period of default
1 IFCI Ltd. Term Loan 11368.91 Up to 3 years
2 IFCI Ltd. Interest on term loan 319.36 Up to 1 year
3 PACL Limited Debentures principal amount 10000.00 Up to 2 years
4 PACL Limited Debentures interest 5353.17 Up to 4 years
5 PACL Limited Debentures redemption premium 2800.00 Up to 2 years

(x) Based on our audit procedures and according to the information and the explanationsgiven to us the Company has given guarantee of Rs. 6500.00 lacs to bank/financialinstitution for loans taken by associate company setting up a five star hotel project atChandigarh. (Refer Note no. 19(i) of financial statements)

(xi) According to the information and explanations given to us and on the basis of ourverification of books of accounts of the company we are of the opinion that the termloans have been applied for the purpose for which they were raised.

(xii) Based upon the audit procedures performed and information and explanations givenby the management we report that no fraud on or by the company has been noticed orreported during the year.

For M Kamal Mahajan And Co.
Chartered Accountants
Firm's Regn. No. 006855N
M. K. Mahajan
Place : New Delhi (Partner)
Date : 30th May 2015 Membership number 017418

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