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Advani Hotels & Resorts (India) Ltd.

BSE: 523269 Sector: Services
NSE: ADVANIHOTR ISIN Code: INE199C01026
BSE 00:00 | 05 Aug 79.30 2.60
(3.39%)
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78.00

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80.35

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76.60

NSE 00:00 | 05 Aug 79.65 2.95
(3.85%)
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77.70

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80.00

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OPEN 78.00
PREVIOUS CLOSE 76.70
VOLUME 12400
52-Week high 108.20
52-Week low 61.25
P/E 21.15
Mkt Cap.(Rs cr) 366
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 78.00
CLOSE 76.70
VOLUME 12400
52-Week high 108.20
52-Week low 61.25
P/E 21.15
Mkt Cap.(Rs cr) 366
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Advani Hotels & Resorts (India) Ltd. (ADVANIHOTR) - Auditors Report

Company auditors report

TO THE MEMBERS OF ADVANI HOTELS & RESORTS (INDIA) LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Advani Hotels & Resorts(India) Limited ("the Company") which comprise the Balance Sheet as at 31stMarch 2021 and the Statement of Profit and Loss Statement of Changes in Equity andStatement of Cash Flows for the year then ended and notes to the financial statementsincluding a summary of significant accounting policies and other explanatory information(hereinafter referred to as "the financial statements").

In our opinion and to the best of our information and according to theexplanations given to us the aforesaid financial statements give the information requiredby the Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the accounting principles generally accepted in India ofthe state of affairs of the Company as at 31st March 2021 and loss and othercomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing(SAs) specified under section 143(10) of the Act. Our responsibilities under those SAs arefurther described in the Auditor's Responsibilities for the Audit of the FinancialStatements section of our report. We are independent of the Company in accordance with theCode of Ethics issued by the Institute of Chartered Accountants of India together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgmentwere of most significance in our audit of the financial statements of the current period.These matters were addressed in the context of our audit of the financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matters.

S.No. Key Audit Matter Response to Key Audit Matter
1 Refer Note 32 of the financial statements. For legal regulatory and tax matters our procedures included examining external legal opinions obtained by management meeting and discussions with the management and examining relevant correspondence; discussing litigations with the Company's legal and tax consultants assessing management's conclusions through understanding precedents set in similar cases.
The Company has significant tax and other litigations against it. There is a high level of judgement required in estimating the level of provisioning required and appropriateness of disclosure of those litigations as contingent liabilities.
We also involved our internal tax specialists to gain an understanding and to determine the level of exposure for direct and indirect tax litigations of the Company.
Considering the above we examined the level of provisions recorded and assessed the adequacy of disclosures in financial statements.

Emphasis of Matter

We draw attention to:

(a) Note 35 to the financial statements regarding themanagement's impairment assessment of property plant and equipment right-of-useassets intangible assets investments trade receivables inventories and other currentassets appearing in the financial statements of the Company as at 31 March 2021 beingconsidered unimpaired/recoverable based on its internal and external sources ofinformation and estimates and its judgments on implication expected to arise fromCOVID-19 pandemic. This being an unprecedented event which' is difficult to estimatethe actual implications could vary. The economic/ social consequences of this event areimpacting the very operation of the hotel and consumer demand.

(b) Note 27.3 to the financial results regarding remuneration of Rs.992123/- and Rs. 659200/- paid to the Chairman & Managing Director and ExecutiveDirector of the Company respectively for the month of March 2021 which is approved by theNomination and Remuneration Committee and is subject to approval of the members of theCompany in the ensuing Annual General Meeting of the Company.

Our opinion is not modified in respect of the above matters.

Information Other than the Financial Statements and Auditor'sReport Thereon

The Company's management and Board of Directors are responsiblefor the other information. The other information comprises the information included in theCompany's annual report but does not include the financial statements and ourauditor's report thereon.

Our opinion on the financial statements does not cover the otherinformation and we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the financial statements or ourknowledge obtained in the audit or otherwise appears to be materially misstated. If basedon the work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of Management and Those Charged with Governance forthe Financial Statements

The Company's Board of Directors is responsible for the mattersstated in section 134(5) of the Act with respect to the preparation of these financialstatements that give a true and fair view of the financial position financialperformance changes in equity and cash flows of the Company in accordance with6 theaccounting principles generally accepted in India including the Indian AccountingStandards specified in the Companies (Indian Accounting Standards) Rules 2015 (asamended) under section 133 of the Act. 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 statement that give a true and fair view andare free from material misstatement whether due to fraud or error.

In preparing the financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing asapplicable matters related to going concern and using the going concern basis ofaccounting unless management either intends to liquidate the Company or to ceaseoperations or has no realistic alternative but to do so.

The Board of Directors is also responsible for overseeing theCompany's financial reporting process.

Auditor's Responsibilities for the Audit of the FinancialStatements

Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement whether due to fraudor error and to issue an auditor's report that includes our opinion. Reasonableassurance is a high level of assurance but is not a guarantee that an audit conducted inaccordance with SAs will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.

As part of an audit in accordance with SAs we exercise professionaljudgment and maintain professional skepticism throughout the audit.

We also:

• Identify and assess the risks of material misstatement of thefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal control relevant to theaudit in order to design audit procedures that are appropriate in the circumstances. Undersection 143(3)(i) of the Act we are also responsible for expressing our opinion onwhether the company has adequate internal financial controls system in place and theoperating effectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of thegoing concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor'sreport to the related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditionsmay cause the Company to cease to continue as a going concern.

• Evaluate the overall presentation structure and content of thefinancial statements including the disclosures and whether the financial statementsrepresent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the financialstatements that individually or in aggregate makes it probable that the economicdecisions of reasonably knowledgeable user of the financial statements may be influenced.We consider quantitative materiality and qualitative factors in (i) planning the scope ofour audit work and in evaluating the results of our work: and (ii) to evaluate the effectof any identified misstatements in the financial statements.

We communicate with those charged with governance regarding amongother matters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

We also provide those charged with governance with a statement that wehave complied with relevant ethical requirements regarding independence and tocommunicate with them all relationships and other matters that may reasonably be thoughtto bear on our independence and where applicable related safeguards.

From the matters communicated with those charged with governance wedetermine those matters that were of most significance in the audit of the financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes publicdisclosure about the matter or when in extremely rare circumstances we determine that amatter should not be communicated in our report because the adverse consequences of doingso would reasonably be expected to outweigh the public interest benefits of suchcommunication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016("the Order") issued by the Central Government of India in terms of sub-section(11) of section 143 of the Act we give in the "Annexure-A" a statement on thematters specified in paragraphs 3 and 4 of the Order to the extent applicable.

2. In our opinion and according to the information and explanationsgiven to us the remuneration paid by the Company to its directors during the current yearis in accordance with the provisions of Section 197 of the Act except that remuneration ofRs. 9.92 lakhs and Rs. 6.59 lakhs paid to the Chairman & Managing Director andExecutive Director of the Company respectively for the month of March 2021 which isapproved by the Nomination and Remuneration Committee in its meeting held on 11th February2021 and is subject to the approval of the shareholders of the Company in the ensuingannual general meeting of the Company. Reference is invited to Note 27.3 to the financialstatements. The remuneration paid to any director is not in excess of the limit laid downunder Section 197 of the Act. The Ministry of Corporate Affairs has not prescribed otherdetails under Section 197(16) of the Act which are required to be commented upon by us.

3. As required by Section 143(3) of the Act we report that:

(a) We have sought and obtained all the information and explanationswhich to the best of our knowledge and belief were necessary for the purposes of ouraudit.

(b) 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 the Statementof Changes in Equity and the Cash Flow Statement dealt with by this Report are inagreement with the books of account.

(d) In our opinion the aforesaid financial statements comply with theIndian Accounting Standards specified in the Companies (Indian Accounting Standards)Rules 2015 (as amended) under Section 133 of the Act read with Rule 7 of the Companies(Accounts) Rules 2014.

(e) On the basis of the written representations received from thedirectors as on 31st March 2021 taken on record by the Board of Directors none of thedirectors is disqualified as on 31st March 2021 from being appointed as a director interms of Section 164 (2) of the Act.

(f) With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

(g) With respect to the other matters to be included in theAuditor's Report in accordance with Rule 11 of the Companies (Audit and Auditors)Rules 2014 in our opinion and to the best of our information and according to theexplanations given to us:

i) The Company has disclosed the impact of pending litigations on itsfinancial position in its financial statements - Refer Note 32(f) to the financialstatements.

ii) The Company did not have any long-term contracts includingderivative contracts for which there were any material foreseeable losses.

iii) There has been no delay in transferring amounts required to betransferred to the Investor Education and Protection Fund by the Company

>
For JMT & Associates
Chartered Accountants
(Firm Registration No. 104167W)
Amar Bafna
Partner
Membership No. 048639
UDIN: 21048639AAAAFO6993
Mumbai: 26th June 2021

ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in paragraph 1 under ‘Report on OtherLegal and Regulatory Requirements' in our report of even date to the members ofADVANI HOTELS & RESORTS (INDIA) LIMITED for the year ended 31s1 March 2021.We report that:

1. (a) The Company has maintained proper records showing fullparticulars including quantitative details and situation of fixedassets.

(b) Some of the fixed assets were physically verified after the closeof the financial year by the management in accordance with a phased programme ofverification which in our opinion provides for physical verification of all the fixedassets at reasonable intervals. No material discrepancies between the books records andphysical inventory have been noticed.

(c) According to the records of the Company examined by us and theinformation and explanations given to us the title deeds of immovable properties are heldin the name of the company.

2 In our opinion physical verification of inventories has beenconducted by the management at reasonable intervals. The discrepancies noticed on suchverification by the management have been properly dealt with in the books of account.

3 The Company has not granted any loans secured or unsecured tocompanies firms limited liability partnerships or other parties covered in the Registermaintained under section 189 of the Act hence clause 3 (iii) (a) 3 (iii) (b) and 3 (iii)(c) of the Order are not applicable to the Company.

4 In respect of investment made by the Company in acquisition of unitsof certain mutual funds it has complied with the provisions of Section 186 of the Act.The Company has not given any loans or issued any guarantee or provided any securitycovered under section 185 and 186 of the Act during the year.

5 The Company has not accepted any deposits from the public within themeaning of Section 73 to 76 of the Act and the rules framed there under. We are informedthat the Company Law Board or National Company Law Tribunal or Reserve Bank of India orany court has not passed any Order.

6 The maintenance of cost records has not been prescribed for any ofthe products of the of the Company under sub-section (1) of section 148 of the Act.

7 (a) According to the records of the Company the Company is generallyregular in depositing with appropriate authorities undisputed statutory dues includingprovident fund employees' state insurance income-tax customs duty value addedtax goods and service tax cess and other material statutory dues applicable to it thoughthere have been slight delays in few cases mainly due to Covid-19. According to theinformation and explanations given to us there are no arrears of undisputed amountspayable in respect of above statutory dues which were outstanding as on the last day ofthe financial year for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us thereare no cases of non-deposit with appropriate authorities of disputed dues of income-taxcustoms duty goods and service tax value added tax or cess except the following:

Name of the statute Nature of dues Amount (Rs. in lakhs) Period to which the amount relates Forum where the dispute is pending
Income-tax Act 1961 Tax on regular assessment under Section 143 (1)(a) 22.52 AY 2017-18 Commissioner (Appeals)
Income-tax Act 1961 Tax on regular assessment under Section 143 (1)(a) 60.31 AY 2018-19 Commissioner (Appeals)
Customs Act 1962 Differential duty on equipment imported under EPCG Scheme and Penalty 42.60 49.60 Plus Interest 2000 Customs Excise and Service Tax Appellate Tribunal

8. According to the records of the Company examined by us and theinformation and explanations given to us the Company has not defaulted in repayment ofloans or borrowings dues to banks. The Company has not taken any loan from any financialinstitution or from government and by way of issue of debentures.

9. In our opinion on an overall basis and according to the informationand explanations given to us the term loans were applied for the purpose for which theloans were obtained. The Company has not raised any money by way of initial public offeror further public offer (including debt instruments) during the year.

10. During the course of our examination of the books of account andrecords of the Company carried out in accordance with the generally accepted auditingpractices in India and according to the information and explanations given to us we havecome across an instance of fraud on the Company committed by an employee Mr. Sachin Jainthe Ex-Chief Financial Officer (ex- CFO) during the year involving an amount of Rs. 12.40lakhs by indulging in certain financial irregularities of not recordings certain receiptsallowing unauthorized discounts to customers unauthorized purchase of fixed asset forpersonal use manipulation of payroll records etc. The Company has initiated appropriateaction against the ex-CFO and a sum of Rs. 3.61 lakhs has been recovered till 31stMarch 2021 and further sum of Rs. 3.30 lakhs after the close of the financial year. Exceptthe above we have not neither come across any other instances of fraud by the Company orany fraud on the Company by its officers and employees was noticed or reported during theyear nor have we been informed of any such instance by the management.

11. According to the records of the Company examined by us and theinformation and explanations given to us managerial remuneration has been paid / providedby the Company in accordance with the requisite approvals mandated by the provisions ofsection197 read with Schedule V to the Act except that remuneration of Rs. 992123/- andRs. 659200/- paid to the Chairman & Managing Director and Executive Director of theCompany respectively for the month of March 2021 is approved by the Nomination andRemuneration Committee in its meeting held on 11th February 2021 and is subjectto the approval of the shareholders of the Company in the ensuing annual general meetingof the Company. Refer Note 27.3 to the financial statements.

12 The Company is not a Nidhi Company hence our comments as requiredunder clause 3 (xii) of the Order are not given.

13 In our opinion and according to the records of the Company examinedby us and the information and explanations given to us the transactions entered into bythe Company during the year with related parties are in compliance with the provisions ofSection 177 and 188 of the Act where applicable and the details thereof have beendisclosed in the Financial Statements etc. as required by the accounting standards.

14 According to the information and explanations given to us. theCompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year. Therefore clause 3 (xiv) of the Order isnot applicable to the Company.

15 According to the records of the Company examined by us and theinformation and explanations given to us the Company has not entered into any non-cashtransactions referred to in section 192 of the Act with directors of the Company orpersons connected with them during the year.

16 According to the information and explanations given to us theCompany is not required to be registered under Section 45-IAof the Reserve Bank of IndiaAct 1934.

For JMT & Associates
Chartered Accountants
(Firm Registration No. 104167W)
Amar Bafna
Partner
Membership No. 048639
UDIN: 21048639AAAAFO6993
Mumbai: 26th June 2021

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

Report on the Internal Financial Controls under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

The Annexure referred to in paragraph 2 (f) under "Report on OtherLegal and Regulatory Requirements" in our report of even date to the members ofADVANI HOTELS & RESORTS (INDIA) LIMITED for the year ended 31st March 2021.We report that:

We have audited the internal financial controls overfinancialstatements of Advani Hotels & Resorts (India) Limited ("the Company") as of31st March 2021 in conjunction with our audit of the Ind AS financialstatements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

The Company's management is responsible for establishing andmaintaining internal financial controls based on the internal control with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the Institute ofChartered Accountants of India ("the Guidance Note"). 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 assetsthe prevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired under the Act.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company'sinternal financial controls with reference to the financial statements based on our audit.We conducted our audit in accordance with the Guidance Note and the Standards on Auditingprescribed under section 143(10) of the Act to the extent applicable to an audit ofinternal financial controls with reference to the financial statements. Those Standardsand the Guidance Note require that we comply with ethical requirements and plan andperform the audit to obtain reasonable assurance about whether adequate internal financialcontrols with reference to financial statements were established and maintained and ifsuch controls operated effectively in all material respects.

Our audit involves performing procedures to obtain audit evidence aboutthe adequacy of the internal financial controls with reference to financial statements andtheir operating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlsassessing 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 andappropriate to provide a basis for our audit opinion on the Company's internalfinancial controls with reference to financial statements.

Meaning of Internal Financial Controls with Reference to FinancialStatements

A company's internal financial control with reference to financialstatements is a process designed to provide reasonable assurance regarding the reliabilityof financial reporting and the preparation of financial statements for external purposesin accordance with generally accepted accounting principles. A company's internalfinancial control with reference to financial statement includes those policies andprocedures that (1) pertain to the maintenance of records that in reasonable detailaccurately and fairly reflect the transactions and dispositions of the assets of thecompany; (2) provide reasonable assurance that transactions are recorded as necessary topermit preparation of financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditure of the company are being madeonly in accordance with authorizations of management and directors of the company; and (3)provide reasonable assurance regarding prevention or timely detection of unauthorizedacquisition use or disposition of the company's assets that could have a materialeffect on the financial statements.

Inherent Limitations of Internal Financial Controls with Reference toFinancial Statements

Because of the inherent limitations of internal financial controls withreference to financial statements including the possibility of collusion or impropermanagement override of controls material misstatements due to error or fraud may occurand not be detected. Also projections of any evaluation of the internal financialcontrols with reference to financial statements to future periods are subject to the riskthat the internal financial control with reference to financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequateinternal financial controls system with reference to financial statements and suchinternal financial controls were operating effectively as at 31st March 2021based on the internal control with reference to financial statements criteria establishedby the Company considering the essential components of internal control stated in theGuidance Note on Audit of Internal Financial Controls Over Financial Reporting issued bythe Institute of Chartered Accountants of India.

For JMT & Associates
Chartered Accountants
(Registration No. 104167W)
Amar Bafna
Partner
Membership No. 048639
UDIN: 21048639AAAAFO6993
Mumbai: 26th June 2021

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