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Advani Hotels & Resorts (India) Ltd.

BSE: 523269 Sector: Services
NSE: ADVANIHOTR ISIN Code: INE199C01026
BSE 16:00 | 21 Jun 65.85 -1.30
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NSE 15:44 | 21 Jun 65.60 -1.45
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OPEN 65.20
PREVIOUS CLOSE 67.15
VOLUME 9631
52-Week high 69.70
52-Week low 38.30
P/E
Mkt Cap.(Rs cr) 304
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 65.20
CLOSE 67.15
VOLUME 9631
52-Week high 69.70
52-Week low 38.30
P/E
Mkt Cap.(Rs cr) 304
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 2020 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 the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2020 and profit 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) specifiedunder section 143(10) of the Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statements sectionof our report. We are independent of the Company in accordance with the Code of Ethicsissued by the Institute of Chartered Accountants of India together with the ethicalrequirements 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 judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters.

S.No. Key Audit Matter Response to Key Audit Matter
1 Refer Note 30 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:

Note 33 to the financial statements regarding the management's impairment assessmentof property plant and equipment right-of-use assets intangible assets investmentstrade receivables inventories and other current assets appearing in the financialstatements of the Company as at 31st March 2020 being consideredunimpaired/recoverable based on its internal and external sources of information andestimates and its judgments on implication expected to arise from COVID-19 pandemic. Thisbeing an unprecedented event which is difficult to estimate the actual implicationscould vary. The economic/social consequences of this event are impacting the veryoperation of the hotel and consumer demand.

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

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our auditor's reportthereon.

Our opinion on the financial statements does not cover the other information and we donot express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is a material misstatement of this other information weare required to report that fact. We have nothing to report in this regard.

Responsibilities of Management and those charged with Governance for the FinancialStatements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance changes in equityand cash flows of the Company in accordance with the accounting principles generallyaccepted in India including the Indian Accounting Standards specified in the Companies(Indian Accounting Standards) Rules 2015 (as amended) under Section 133 of the Act. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; selection and application of appropriateaccounting policies; making judgments 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 statement that givea true and fair view and are free from material misstatement whether due to fraud orerror.

In preparing the financial statements management is responsible for assessing theCompany's ability to continue as a going concern disclosing as applicable mattersrelated to going concern and using the going concern basis of accounting unless managementeither intends to liquidate the Company or to cease operations or has no realisticalternative but to do so.

The Board of Directors is also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financialstatements as a whole are free from material misstatement whether due to fraud or errorand to issue an auditor's report that includes our opinion. Reasonable assurance is a highlevel of assurance but is not a guarantee that an audit conducted in accordance with SAswill always detect a material misstatement when it exists. Misstatements can arise fromfraud or error and are considered material if individually or in the aggregate theycould reasonably be expected to influence the economic decisions of users taken on thebasis of these financial statements.

As part of an audit in accordance with SAs we exercise professional judgment andmaintain professional skepticism throughout the audit.

We also:

• Identify and assess the risks of material misstatement of the financialstatements whether due to fraud or error design and perform audit procedures responsiveto those risks and obtain audit evidence that is sufficient and appropriate to provide abasis for our opinion. The risk of not detecting a material misstatement resulting fromfraud is higher than for one resulting from error as fraud may involve collusionforgery intentional omissions misrepresentations or the override of internal control.

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls system in place and the operating effectiveness ofsuch controls.

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

• Conclude on the appropriateness of management's use of the going concern basisof accounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on the Company'sability to continue as a going concern. If we conclude that a material uncertainty existswe are required to draw attention in our auditor's report to the related disclosures inthe financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of reasonablyknowledgeable user of the financial statements may be influenced. We consider quantitativemateriality and qualitative factors in (i) planning the scope of our audit work and inevaluating the results of our work: and (ii) to evaluate the effect of any identifiedmisstatements in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosure about the matter orwhen in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

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 ofthe Act we give in the "Annexure-A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order to the extent applicable.

2. In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act. The Ministry ofCorporate Affairs has not prescribed other details under Section 197(16) of the Act whichare 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 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 the Statement of Changes inEquity and the Cash Flow Statement dealt with by this Report are in agreement with thebooks of account.

(d) In our opinion the aforesaid financial statements comply with the IndianAccounting 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 the Directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164 (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 B".

(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 30(f) to the financial statements.

ii) The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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

For Amar Bafna & Associates
Chartered Accountants
(Firm Registration No. 114854W)
Amar Bafna
Partner
Membership No. 048639
UDIN: 20048639AAAACO2343
Mumbai: 30th June 2020

ANNEXURE "A" TO THE INDEPENDENT AUDITORS' REPORT

The Annexure referred to in paragraph 1 under 'Report on Other Legal and RegulatoryRequirements' in our report of even date to the members of ADVANI HOTELS & RESORTS(INDIA) LIMITED for the year ended 31st March 2020. We report that:

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

(b) Some of the fixed assets were physically verified after the close of the financialyear by the management in accordance with a phased programme of verification which in ouropinion provides for physical verification of all the fixed assets at reasonableintervals. No material discrepancies between the books records and physical inventory havebeen noticed.

(c) According to the records of the Company examined by us and the information andexplanations given to us the title deeds of immovable properties are held in the name ofthe company.

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

3. The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the Register maintained underSection 189 of the Act hence clause 3 (iii) (a) 3 (iii) (b) and 3 (iii) (c) of the Orderare not applicable to the Company.

4. In respect of investment made by the Company in acquisition of units of certainmutual funds it has complied with the provisions of Section 186 of the Act. The Companyhas not given any loans or issued any guarantee or provided any security covered underSection 185 and 186 of the Act during the year.

5. The Company has not accepted any deposits from the public within the meaning ofSection 73 to 76 of the Act and the rules framed there under. We are informed that theCompany Law Board or National Company Law Tribunal or Reserve Bank of India or any courthas not passed any Order.

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

7. (a) According to the records of the Company the Company is generally regular indepositing with appropriate authorities undisputed statutory dues including providentfund employees' state insurance income-tax customs duty value added tax goods andservice tax cess and other material statutory dues applicable to it. 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 there are no cases ofnon-deposit with appropriate authorities of disputed dues of income-tax customs dutygoods and service tax value added tax or cess except the following:

Name of the statute Nature of dues Amount (' 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 Rectification before the Assessing officer
Income-tax Act 1961 Tax on regular assessment under Section 143 (1)(a) 58.43 AY 2018-19 Rectification before the Assessing officer
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 the information andexplanations given to us the Company has not defaulted in repayment of loans orborrowings 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 information and explanationsgiven to us the term loans were applied for the purpose for which the loans wereobtained. The Company has not raised any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year.

10. During the course of our examination of the books of account and records of theCompany carried out in accordance with the generally accepted auditing practices in Indiaand according to the information and explanations given to us we have neither come acrossany instances of fraud by the Company or any fraud on the Company by its officers andemployees was noticed or reported during the year nor have we been informed of any suchinstance by the management.

11. According to the records of the Company examined by us and the information andexplanations given to us managerial remuneration has been paid / provided by the Companyin accordance with the requisite approvals mandated by the provisions of Section 197 readwith Schedule V to the Act.

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

13. In our opinion and according to the records of the Company examined by us and theinformation and explanations given to us the transactions entered into by the Companyduring the year with related parties are in compliance with the provisions of Section 177and 188 of the Act where applicable and the details thereof have been disclosed in theFinancial Statements etc. as required by the accounting standards.

14. According to the information and explanations given to us the Company has not madeany preferential allotment or private placement of shares or fully or partly convertibledebentures during the year. Therefore clause 3 (xiv) of the Order is not applicable tothe Company.

15. According to the records of the Company examined by us and the information andexplanations given to us the Company has not entered into any non-cash transactionsreferred to in Section 192 of the Act with directors of the Company or persons connectedwith them during the year.

16. According to the information and explanations given to us the Company is notrequired to be registered under Section 45-IA of the Reserve Bank of India Act 1934.

For Amar Bafna & Associates
Chartered Accountants
(Firm Registration No. 114854W)
Amar Bafna
Partner
Membership No. 048639
Mumbai: 30th June 2020 UDIN: 20048639AAAACO2343

ANNEXURE "B" TO THE INDEPENDENT AUDITORS' REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")

The Annexure referred to in paragraph 2 (f) under "Report on Other Legal andRegulatory Requirements" in our report of even date to the members of ADVANIHOTELS & RESORTS (INDIA) LIMITED for the year ended 31st March 2020. We reportthat:

We have audited the internal financial controls over financial statements of AdvaniHotels & Resorts (India) Limited ("the Company") as of 31st March 2020 inconjunction with our audit of the Ind AS financial statements of the Company for the yearended 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 with reference to financial statementscriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note issued by the Institute of Chartered Accountants ofIndia. These responsibilities include the design implementation and maintenance ofadequate internal financial controls that were operating effectively for ensuring theorderly and efficient conduct of its business including adherence to company's policiesthe safeguarding 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 with reference to the financial statements based on our audit. We conducted ouraudit in accordance with the Guidance Note and the Standards on Auditing prescribed underSection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to the financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tofinancial statements were 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 with reference to financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls assessingthe risk that a material weakness exists and testing and evaluating the design andoperating 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 controls withreference to financial statements.

Meaning of Internal Financial Controls with reference to Financial Statements

A company's internal financial control with reference to financial statements is aprocess designed to provide reasonable assurance regarding the reliability of financialreporting and the preparation of financial statements for external purposes in accordancewith generally accepted accounting principles. A company's internal financial control withreference to financial statement includes those policies and procedures that (1) pertainto the maintenance of records that in reasonable detail accurately and fairly reflectthe transactions 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 expenditure of the company are being made only in accordance with authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to FinancialStatements

Because of the inherent limitations of internal financial controls with reference tofinancial statements including the possibility of collusion or improper managementoverride of controls material misstatements due to error or fraud may occur and not bedetected. Also projections of any evaluation of the internal financial controls withreference to financial statements to future periods are subject to the risk that theinternal financial control with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects an adequate internalfinancial controls system with reference to financial statements and such internalfinancial controls were operating effectively as at 31st March 2020 based on theinternal control with reference to financial statements criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India (the "Guidance Note").

For Amar Bafna & Associates
Chartered Accountants
(Registration No. 114854W)
Amar Bafna
Partner
Membership No. 048639
UDIN: 20048639AAAACO2343
Mumbai: 30th June 2020