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Royal Orchid Hotels Ltd.

BSE: 532699 Sector: Services
NSE: ROHLTD ISIN Code: INE283H01019
BSE LIVE 15:51 | 13 Dec 159.40 -3.50
(-2.15%)
OPEN

162.80

HIGH

167.30

LOW

158.15

NSE 15:55 | 13 Dec 159.85 -2.15
(-1.33%)
OPEN

162.00

HIGH

167.80

LOW

159.10

OPEN 162.80
PREVIOUS CLOSE 162.90
VOLUME 10196
52-Week high 182.75
52-Week low 70.20
P/E 36.56
Mkt Cap.(Rs cr) 435
Buy Price 0.00
Buy Qty 0.00
Sell Price 159.40
Sell Qty 28.00
OPEN 162.80
CLOSE 162.90
VOLUME 10196
52-Week high 182.75
52-Week low 70.20
P/E 36.56
Mkt Cap.(Rs cr) 435
Buy Price 0.00
Buy Qty 0.00
Sell Price 159.40
Sell Qty 28.00

Royal Orchid Hotels Ltd. (ROHLTD) - Auditors Report

Company auditors report

To the Members of Royal Orchid Hotels Limited

Report on the Standalone Financial Statements

We have audited the accompanying standalone financial statements of ROYAL ORCHIDHOTELS LIMITED (the "Company") which comprise the Balance Sheet asat March 31 2016 the Statement of Profit and Loss and the Cash Flow Statement for theyear then ended and a summary of the significant accounting policies and otherexplanatory 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 preparation ofthese standalone 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 Standardsprescribed under section 133 of the Act as applicable.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness ofthe accounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

Auditors’ 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 thereunder and the Order under section143 (11) of the Act.

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under Section 143(10) of the Act. Those Standards requirethat we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the financial statements are free from materialmisstatement.

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 ofthe financial statements whether due to fraud or error. In making those risk assessmentsthe auditor considers internal financial control relevant to the Company’spreparation of the financial statements that give a true and fair view in order to designaudit procedures that are appropriate in the circumstances. An audit also includesevaluating the appropriateness of the accounting policies used and the reasonableness ofthe accounting estimates made by the Company’s Directors as well as evaluating theoverall 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 March 31 2016 and its profit and its cash flows for the year ended on that date.

Emphasis of Matter

We draw attention to Note 2 of the financial statements. As stated therein theCompany’s current liabilities exceeded its current assets as at the balance sheetdate by Rs. 1512.10 lakhs. Further the Company is committed to provide financial andoperational support to a jointly controlled entity and two of its subsidiaries. Theseconditions indicate the existence of a material uncertainty that may cast significantdoubt about the Company’s ability to continue as a going concern. However thefinancial statements of the Company have been prepared on a going concern basisconsidering the credit facility/term loan firmed up with a bank/ financial institutionmanagement’s assessment of future operational plans and cash flows to discharge itsliabilities in the normal course of business and other mitigation plans as described inthe said Note. The ability of the Company to continue as a going concern is dependent onthe successful outcome of the mitigation plans.

Our opinion is not qualified in respect of the above matter.

Report on Other Legal and Regulatory Requirements

1. 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 thebest of 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 bythe 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 FlowStatement dealt 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 prescribed under section 133 of the Act as applicable.

(e) On the basis of the written representations received from the directors as onMarch 31 2016 taken on record by the Board of Directors none of the directors isdisqualified as on March 31 2016 from being appointed as a director in terms of Section164 (2) of the Act.

(f) The going concern matter described under the Emphasis of Matter paragraphabove in our opinion may have an adverse effect on the functioning of the Company.

(g) 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". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company’s internal financial controlsover financial reporting.

(h) With respect to the other matters to be included in the Auditor’s Reportin accordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in ouropinion and 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 derivativecontracts for which there were any material foreseeable losses; and

(iii) There has been no delay in transfering amounts required to be transferredto the Investor Education and Protection Fund by the Company.

2. As required by the Companies (Auditor’s Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure B" a statement on the matters specified in paragraphs 3 and 4of the Order.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm’s Registration No. 117366W/W-100018)

Monisha Parikh

Partner

(Membership No. 47840)

BENGALURU

May 30 2016

ANNEXURE "A" TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 1(g) under ‘Report on Other Legal and RegulatoryRequirements’ section of our report of even date)

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 ROYALORCHID HOTELS LIMITED ("the Company") as of March 31 2016 in conjunctionwith our audit of the standalone financial statements of the Company as of and for theyear 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 Reporting (the"Guidance Note") issued by the Institute of Chartered Accountants of India.These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company’s policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Act.

Auditors’ Responsibility

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 issued by the Institute of Chartered Accountants of India and theStandards on Auditing prescribed under Section 143(10) of the Act to the extentapplicable to an audit of internal financial controls. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was established and maintained and if such controls operatedeffectively 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 controlssystem over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

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 (1) pertain to themaintenance of records that in reasonable detail accurately and fairly reflect thetransactions and dispositions of the assets of the company; (2) 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 authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised 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.

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 March 31 2016 based on the internal controlover financial reporting criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note on Audit of Internal FinancialControls Over Financial Reporting issued by the Institute of Chartered Accountants ofIndia.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm’s Registration No. 117366W/W-100018)

Monisha Parikh

Partner

(Membership No. 47840)

BENGALURU

May 30 2016

ANNEXURE B TO THE INDEPENDENT AUDITORS’ REPORT

(Referred to in paragraph 2 under ‘Report on Other Legal and RegulatoryRequirements’ section of our report of even date)

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

(b) The Company has a program of verification of fixed assets to cover all the itemsover a period of three years which in our opinion is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the program certain fixedassets were physically verified by the management during the year. According to theinformation and explanations given to us no material discrepancies were noticed on suchverification.

(c) According to the information and explanations given to us and based on theexamination of the lease agreements we report that in respect of building constructed onleased land the lease agreements are in the name of the Company where the Company is thelessee in the agreement.

With respect to freehold land where the Company has a share of undivided land jointlywith other entities according to the information and explanations given to us and basedon the examination of registered sale deed provided to us we report that the title deedscomprising of such immovable property as at the balance sheet date is held in the name ofthe Company. (ii) As explained to us the inventories were physically verified during theyear by the Management at reasonable intervals and no material discrepancies were noticedon physical verification.

(iii) According to the information and explanations given to us the Company hasgranted unsecured loans to companies covered in the register maintained under section 189of the Companies Act 2013 in respect of which:

(a) The terms and conditions of the grant of such loans are in our opinion primafacie not prejudicial to the Company’s interest.

(b) The schedule of repayment of principal and payment of interest has not beenstipulated and in the absence of such schedule we are unable to comment on the regularityof the repayments or receipts of principal amounts and interest.

(c) The schedule of repayment is not stipulated and in the absence of such schedule weare unable to comment on the overdue amount if any remaining outstanding as at thebalance sheet date.

(iv) The Company has not granted any loans that are covered under the provisions ofsection 185 of the Act and provisions of section 186 of the Act in respect to granting ofloans making investments and providing guarantees and securities are not applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposit during the year and does not have any unclaimed deposits.

(vi) Having regard to the nature of the Company’s business / activities reportingunder clause (vi) of CARO 2016 is not applicable.

(vii) According to the information and explanations given to us in respect ofstatutory dues:

(a) Undisputed statutory dues including Employee State Insurance Provident FundService Tax Profession tax Tax deducted at source Luxury Tax Value Added Tax andother material statutory dues as applicable have not generally been regularly depositedwith appropriate authorities and there have been delays in many cases.

There were no undisputed amounts payable in respect of Provident Fund Employees’State Insurance Income-tax Sales Tax Service Tax Customs Duty Excise DutyValue Added Tax cess and other material statutory dues in arrears as at March 31 2016for a period of more than six months from the date they became payable other than asreported below.

Name of Statute Nature of Dues Amount (Rs.) Period to which the Amount Relates Due Date
Delhi Value Added Tax Act 2004 Value added taxes 8179328 April 2012 - March 2013 20th of the following month

(b) Details of dues which have not been deposited as on March 31 2016 on account ofdisputes are given below:

Name of Statute Nature of Dues Forum where Dispute is Pending Period to which the Amount Relates Amount (Rs.)
Income tax Act1961 Income Tax Commissioner of Income Financial year 2008-09 22745640
Tax- Appeals Financial year 2010-11 19874500
Financial year 2011-12 2282302
Customs Act1962 Customs Duty Commissioner of Customs Financial year 2006-07 332680
Appeals

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to financialinstitutions and banks. The Company has no borrowings from government and has not issuedany debentures.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause (ix) ofthe Order is not applicable.

(x) To the best of our knowledge and according to the information and explanationsgiven to us no fraud by the Company and no fraud on the Company by its officers oremployees has been noticed or reported during the year.

(xi) 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.

(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of CARO2016 Order is not applicable.

(xiii) In our opinion and according to the information and explanations given to us theCompany is in compliance with Section 188 and 177 of the Companies Act 2013 whereapplicable for all transactions with the related parties and the details of related partytransactions have been disclosed in the financial statements etc. as required by theapplicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or privateplacement of shares or fully or partly convertible debentures and hence reporting underclause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or persons connected with him and hence provisions of section 192 of theCompanies Act 2013 are not applicable.

(xvi) The Company is not required to be registered under section 45-I of the ReserveBank of India Act 1934.

For DELOITTE HASKINS & SELLS LLP

Chartered Accountants

(Firm’s Registration No. 117366W/W-100018)

Monisha Parikh

Partner

(Membership No. 47840)

BENGALURU

May 30 2016