TO THE MEMBERS OF GUJARAT HOTELS LIMITED
Report on the Standalone Financial Statements
1. We have audited the accompanying standalone Ind AS financial statements of M/s.GUJARAT HOTELS LIMITED
("the Company") which comprise the Balance Sheet as at March 31 2017 theStatement of Profit and Loss (including Other Comprehensive Income) the Cash FlowStatement and the Statement of Changes in Equity for the year then ended and a summary ofthe significant accounting policies and other explanatory information.
Management's Responsibility for the Financial Statements
2. 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 standalone Ind AS financial statements to give a true and fair view of the financialposition financial performance including other comprehensive income cash flows andchanges in equity of the company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards (Ind AS) notified undersection 133 of the Companies Act 2013(the Act) Companies (Indian Accounting Standards)Rules 2015. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting 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 standalone Ind AS financial statements that give a true and fair view and arefree from material misstatement whether due to fraud or error.
3. Our responsibility is to express an opinion on these standalone Ind ASfinancial statements based on our audit. We have taken into account the provisions of theAct and the Rules made there under including the accounting standards and matters whichare required to be included in the audit report. We conducted our audit of standalone IndAS financial statements in accordance with the Standards on Auditing specified underSection 143(10) of the Act and other applicable authoritative pronouncements issued by theInstitute of Chartered Accountants of India. Those Standards and pronouncements requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements arefree from material misstatement.
4. An audit involves performing procedures to obtain audit evidence about the amountsand the disclosures in the standalone Ind AS financial statements. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due tofraud or error. In making those risk assessments the auditor considers internal financialcontrol relevant to the Company's preparation of the standalone Ind AS financialstatements that give a true and fair view in order to design audit procedures that areappropriate in the circumstances. 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 standaloneInd AS financial statements.
5. We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financialstatements.
6. In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at March 31 2017 and its Profit total comprehensive incomeits cash flow and the changes in equity for the year ended on that date.
Report on Other Legal and Regulatory Requirements
7. 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 including Other ComprehensiveIncome the Cash Flow Statement and the Statement of Changes in Equity dealt with by thisReport are in agreement with the books of account.
d. In our opinion the aforesaid standalone Ind AS financial statements complywith the Indian Accounting Standards (Ind AS) notified under section 133 of the CompaniesAct 2013 (the Act) Companies (Indian Accounting Standards) Rules 2015.
e. On the basis of the written representations received from the directors as on March31 2017 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2017 from being appointed as a director under section 164(2) of theCompanies Act 2013.
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 to this report.
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 as amended inour opinion and to the best of our knowledge and belief and according to the informationand explanations given to us:
i. The Company has disclosed the impact of pending litigations if any as at March 312017 on its financial position in its standalone Ind AS financial statements;
ii. The Company did not have any outstanding long-term contracts including derivativecontracts as at March 31 2017 for which there were any material foreseeable losses; and
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 standalone Ind ASfinancial statements as regards its holding and dealings in Specified Bank Notes asdefined in the Notification S. O. 3407 (E) dated 8th November 2016 of theMinistry of Finance during the period from 8th November 2016 to 30th December 2016. Basedon audit procedures performed and representations provided to us by the management wereport that the disclosures are in accordance with the books of accounts maintained by thecompany and as produced to us by the Management.
8. As required by the Companies (Auditor's Report) Order 2016' issued by theCentral Government of India in terms of sub-section (11) of section 143 of the Act(hereinafter referred to as the "CARO 2016") and on the basis of such checks ofthe books and records of the Company as we considered appropriate and according to theinformation and explanations given to us we give in the Annexure B'' astatement on the matters specified in paragraphs 3 and 4 of the Order.
For Talati & Talati Chartered Accountants Firm Registration No.110758W
CA. Manish A. Baxi Partner Membership No. 045011 Place : New Delhi Date : 22nd April2017
Annexure A: (Annexure to the Independent Auditor's Report)
Referred to in paragraph 7(f) of the Independent Auditor's Report of even date to themembers of M/s. Gujarat Hotels Limited on the Financial Statements for the yearended 31st March 2017.
Report on the Internal Financial Controls Over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")
We have audited the Internal Financial Controls over Financial Reporting of M/s.Gujarat Hotels Limited ("the Company") as of March 31 2017 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon 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 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.
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 Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated 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 I/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 of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
2. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorisations of management and directors of the company; and
3. provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial 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 March 31 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 Talati & Talati Chartered Accountants Firms Registration No. 110758W
CA. Manish A. Baxi Membership No. 045011 Place : New Delhi Date : 22nd April 2017
Annexure B: To the Independent Auditors' Report
(As referred to in paragraph 8 under the heading of Report on other Legal andRegulatory requirements' of our report of even date on the Financial Statements of M/s.Gujarat Hotels Limited ("the Company") for the year ended on March 31 2017)
i. In respect of Fixed Assets:
a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets;
b) As explained to us the fixed assets have been physically verified by the managementat reasonable intervals which in our opinion is reasonable having regard to the size ofthe company and nature of the fixed assets. No material discrepancy has been noticed onsuch verification.
c) With respect to immovable properties the company has filed a writ petition in theGujarat High Court seeking that the Gujarat State Government be directed to take action onCompany's application to have the leasehold land of the Hotel converted to freehold andtransferred to Company as per the existing government policy in this regard.
ii. In respect of Inventories:
There is no inventory; and hence the related paragraphs of CARO 2016 are notapplicable.
iii. In respect to loans secured or unsecured in our opinion and according to theinformation and explanation given to us the Company has not granted any loans secured orunsecured to companies firms Limited LiabilityPartnerships or other parties covered inthe register maintained under section 189 of the Companies Act 2013.
iv. In respect to loans investments guarantees and security in our opinion andaccording to the information and explanation given to us the company has complied withthe provisions of section 185 and 186 of the Companies Act 2013.
v. According to the information and explanations given to us thecompany has notaccepted any deposit during the year and accordingly the question of complying withSectiona 73 and 76 of the Companies Act 2013 does not arise. In respect of unclaimeddeposits the company has complied with the provisions of Sections 74 and 75 or any otherrelevant provisions of the Companies Act 2013. According to the information andexplanations given to us no order has been passed by the Company Law Board or theNational Company Law Tribunal or the Reserve Bank of India or any Court or any otherTribunal on the company.
vi. We have been informed by the management of the Company that no cost records havebeen prescribed by the Central Government under sub-section (1) of section 148 of theCompanies Act 2013.
vii. In respect to statutory dues:
a) According to the information and explanation given to us and based on the recordsexamined by us the Company has been regular in depositing undisputed statutory duesincluding provident fundemployees' state insurance income-tax sales-tax service taxduty of customs duty of excise value added tax cess andany other statutory dues to theappropriate authorities.
b) According to the records of the Company there are no dues of income tax or salestax or service tax or duty of customs or duty of excise or value added tax which have notbeen deposited on account of any dispute.
viii. Based on the information provided to us the Company does not have any loans orborrowing from a financial institution bank Government or debenture holders.
ix. According to the information and records available with us the Company has notraised moneys by way of initial public offer or further public offer (including debtinstruments) and term loans during the financial year under audit. However such moniesraised earlier were applied for the purposes for which those are raised.
x. According to the information available with us no fraud by the company or on theCompany by its officers or employees has been noticed or reported during the year.
xi. In our opinion and according to the information available with us the Company haspaid or provided the managerial remuneration in accordance with the requisite approvalsmandated by the provisions of section 197 read with Schedule V to the Companies Act 2013.
xii. As per the information available with us and understanding of business of thecompany it is not a Nidhi Company. Hence the related paragraphs of CARO 2016 are notapplicable.
xiii. In our opinion all transactions with the related partiesare in compliance withsections 177 and 188 of Companies Act2013 where applicable and the details have beendisclosed in the standalone Ind AS
Financial Statements etc. as required by the applicable Indian accounting standards.
xiv. According to the information and records available with us the Company has notmade any preferential allotment or private placement of shares or fully or partlyconvertible debentures during the year under review and hence reporting under under clause(xiv) of the Order is not applicable to the Company.
xv. According to the information and records available with us the Company has notentered into any non-cash transactions with directors or persons connected with him.
xvi. As per the information available with us and understanding of business of thecompany the company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934
For Talati & Talati Chartered Accountants Firm's Registration No. 110758W
CA. Manish A. Baxi
Membership No. 045011
Place : New Delhi
Date : 22nd April 2017