You are here » Home » Companies » Company Overview » Benares Hotels Ltd

Benares Hotels Ltd.

BSE: 509438 Sector: Services
NSE: N.A. ISIN Code: INE664D01019
BSE 00:00 | 28 Jul 1670.15 -14.85
(-0.88%)
OPEN

1643.30

HIGH

1690.10

LOW

1630.00

NSE 05:30 | 01 Jan Benares Hotels Ltd
OPEN 1643.30
PREVIOUS CLOSE 1685.00
VOLUME 723
52-Week high 1835.40
52-Week low 1145.00
P/E
Mkt Cap.(Rs cr) 217
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 1643.30
CLOSE 1685.00
VOLUME 723
52-Week high 1835.40
52-Week low 1145.00
P/E
Mkt Cap.(Rs cr) 217
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Benares Hotels Ltd. (BENARESHOTELS) - Auditors Report

Company auditors report

TO THE MEMBERS OF BENARES HOTELS LIMITED

Report on the Audit of the Financial Statements

Opinion

We have audited the financial statements of Benares Hotels Limited ("theCompany") which comprise the balance sheet as at 31 March 2020 and the statement ofProfit and Loss including other comprehensive income 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.In our opinion and to the best of our information and according to the explanations givento us the aforesaid financial statements give the information required by the CompaniesAct 2013 ('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 31 March 2020 profit and other comprehensive income changesin equity and its cash flows for the year ended on that date.

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 (ICAI) 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.

Expansion and renovation of one of the hotel properties of the Company

During the year the company completed expansion and renovation which comprised asignificant portion of additions to the Property Plant and Equipment of the year. Theprocess of additions involves completion of all the related construction contracts jobworks and other related civil electrical landscaping and interior works finaldetermination of the cost including allocation of indirect costs and ready to use dates.This involves reconciliation of related vendor accounts and obtaining technicalconfirmations. Any incorrect determination of costs due to error or management bias inallocation of indirect costs could lead to material misstatements. Refer Property Plantand Equipment at Note 4 to Financial Statements for the additions made during the year.

How we addressed it in our audit

After obtaining a thorough understanding of the project break down structure relevantgroup policies and accounting policies adopted our tests included:

• Test of controls related to system of authorization of capital procurementsaccounting and classification of related vendor bills reconciliations of vendor accountsand approval for journal & payment entries.

• Verification of final determination of quantities contract dues and vendoraccount reconciliations

• Validating the assumptions used in the allocation of indirect costs

• Comparison of the costs with the budgets and enquiring in to the reasons forvariations and ensuring infructuous costs if any do not getting added

• Verifying the classification of additions into various asset classes and theuseful life used for purpose of depreciation calculations Our tests did not reveal anymaterial exceptions.

Emphasis of matter

We draw attention to:

Note 2(d) and Note 37(f) to the financial statements regarding the management'simpairment assessment of property plant and equipment intangible assets investmentstrade receivables valuation as at 31 March 2020 being considered recoverable based on itsinternal and external sources of information and estimates and its judgments onimplication expected to arise from COVID-19 pandemic. This being an unprecedented eventwhich is difficult to estimate the actual implications could vary. The economic/socialconsequences of this event are impacting the very operation of the hotels and consumerdemand.

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

Information Other than the Financial Statements and Auditors' Report Thereon

The Company's management and Board of Directors are responsible for the preparation ofthe other information.

The other information comprises the information included in the Directors report andManagement Discussion and Analysis the Financial Performance but does not include thefinancial statements and our auditors' report thereon.

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 during 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 the Management and Those Charged with Governance for FinancialStatements

The Company's management and Board of Directors are responsible for the matters statedin section 134(5) of the Act with respect to the preparation of these financial statementsthat give a true and fair view of the financial position financial performance and totalcomprehensive income changes in equity and cash flows of the Company in accordance withthe accounting principles generally accepted in India including the Indian accountingStandards (Ind AS) prescribed under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error. In preparing thefinancial statements management and Board of Directors are 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.

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

Auditors' 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 auditors' 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 financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3)(i) of the Act we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls with reference to the financialstatements in place and the operating effectiveness of such 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 auditors' 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 auditors'report. However future events or conditions may cause the Company to cease to continue asa going concern; and

• 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.

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 withthose charged with governance we determine those matters that were of most significancein the audit of the financial statements of the current period and are therefore the keyaudit matters. We describe these matters in our auditors' report unless law or regulationprecludes public disclosure about the matter or when in extremely rare circumstances wedetermine that a matter should not be communicated in our report because the adverseconsequences of doing so would reasonably be expected to outweigh the public interestbenefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' 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 matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. As required by Section 143(3) of the Act we report that: (a) We have sought andobtained all the information and explanations which to the best of our knowledge andbelief 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 Statement of Changes in Equity and the statement of cash flows dealt with bythis Report are in agreement with the books of account. (d) In our opinion the aforesaidfinancial statements comply with the Indian Accounting Standards

(Ind AS) prescribed under Section 133 of the Act.

(e) On the basis of the written representations received from the directors as on 31March 2020 taken on record by the Board of Dir-ectors none of the directors isdisqualified as on 31 March 2020 from being appointed as a director in terms of Section164 (2) of the Act.

(f) At this juncture we are unable to comment whether the matter described in theEmphasis of Matter paragraph above may have an adverse effect on the functioning of theCompany. (g) With respect to the adequacy of the internal financial controls withreference to the financial statements of the Company and the operating effectiveness ofsuch controls refer to our separate Report in "Annexure B".

(h) With respect to the other matters to be included in the Auditors' 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. TheCompany has disclosed the impact of pending litigations on its financial position in itsfinancial statements Refer Note 30 to the financial statements; ii. the Company did nothave any long-term contracts including derivative contracts for which there were anymaterial foreseeable losses. iii. There has been no delay in transferring amountsrequired to be transferred to the Investor Education and Protection Fund by the Companyduring the year ended 31 March 2020.

3. With respect to the matter to be included in the Auditors' Report under section197(16): 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.

For PKF Sridhar & Santhanam LLP
Chartered Accountants
Firm's Registration No.003990S/S200018
R. Suriyanarayanan
Partner
Membership No. 201402
UDIN: 20201402AAAAAT1445
Place of Signature: Mumbai
Dated: 28th May 2020

Annexure-A to Independent Auditors' Report

Referred to in paragraph 1 on ‘Report on Other Legal and Regulatory Requirements'of our report of even date to the members of Benares Hotels Limited ("theCompany") on the financial statements as of and for the year ended 31 March 2020.

i. In respect of the Company's fixed assets: (a) The Company has maintained properrecords showing full particulars including quantitative details and situation of fixedassets.

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three years. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets. Pursuant to the programme none of thefixed assets were due for physical verification by the management during the year.

(c) According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds provided to us we report thatthe title deeds comprising all the immovable properties of the land and buildings whichare freehold are held in the name of the Company as at Balance Sheet date. In respect ofimmovable properties of land and building that have been taken on lease and disclosed asright of use assets in the financial statements the lease agreements are in the name ofthe Company. ii. The inventory has been physically verified by the management atreasonable intervals during the year. In our opinion the frequency of such verificationis reasonable. The discrepancies noticed on verification between the physical stocks andthe book records were not material and have been dealt with in the books of account. iii.Based on our audit procedures & according to the information and explanation given tous the Company has not granted any loans secured or unsecured to parties covered in theregister maintained under section 189 of the Act and hence 3(iii) of the Order is notapplicable to the Company.

iv. Based on our audit procedures & according to the information and explanationgiven to us the Company has neither given any loan guarantees or security nor made anyinvestment during the year covered under section 185 and 186 of the Act. Therefore clause3(iv) of the Order is not applicable to the Company.

v. Based on our audit procedures & according to the information and explanationgiven to us the Company has not accepted any deposits from the public within the meaningof the Act and the rules made there under and hence clause 3(v) of the Order is notapplicable.

vi. The Company is not required to maintain cost records specified by the CentralGovernment under sub section (1) of section 148 of the Act.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us except for few delays the Company has generally beenregular in depositing undisputed statutory dues including provident fund employees' stateinsurance income-tax duty of customs duty of excise Goods and Services Tax (GST) cessand any other statutory dues as applicable with the appropriate authorities.

According to the information and explanation given to us and the records of the Companyexamined by us no undisputed amounts payable in respect of provident fund employees'state insurance income-tax duty of customs duty of excise Goods and Services Tax(GST) cess and any other statutory dues were in arrears as at 31 March 2020 for a periodof more than six months from the date they became payable.

(b) According to the information and explanations given to us and based on ourexamination of the records of the Company there are no dues of Income-tax Sales TaxService tax Goods and Services Tax (GST) Duty of customs Excise duty and Value addedtax as at 31 March 2020 which have not been deposited with the appropriate authorities onaccount of any dispute except as stated below:

Name of the Statute Name of Dues Amount (in INR Lakhs) Period to which amounts relates Forum where the dispute is pending
U. P. Trade Tax Act Demand 26.27* FY 2006-07 & FY 2007-08 1st Appellate Authority UP VAT

*net of amounts paid under protest

viii. Based on our audit procedures and as per the information and explanations givenby the management the Company does not have any loans or borrowings from the governmentfinancial institution bank or debenture holders during the year. ix According to theinformation and explanations given to us the Company did not raise money by way ofinitial public offer or further public offer (including debt instruments) and term loansduring the year. Accordingly reporting under the clause 3(ix) of the Order is notapplicable to the Company. x To the best of our knowledge and belief and according to theinformation and explanations given to us we report that no fraud by the Company or on theCompany by its officers or employees has been noticed or reported during the year nor havewe been informed of such case by the management. xi According to the information andexplanations given to us the managerial remuneration has been paid/ provided inaccordance with the requisite approvals mandated by the provisions of section 197 readwith Schedule V to the Act. xii The Company is not a Nidhi company in accordance withNidhi Rules 2014. Accordingly the provisions of clause (xii) of the Order are notapplicable.

xiii Based on our audit procedures and according to the information and explanationsgiven to us all the transactions entered into with the related parties during the yearare in compliance with Section 177 and Section 188 of the Act where applicable and thedetails have been disclosed in the financial statements as required by the applicableIndian accounting standards. xiv Based on our audit procedures and according to theinformation and explanations given to us the Company has not made any preferentialallotment of shares or private placement of shares or fully or partly paid convertibledebentures during the year under review. Accordingly the provisions of clause (xiv) ofthe Order are not applicable. xv Based on our audit procedures and according to theinformation and explanations given to us the Company has not entered into any non-cashtransactions with directors or persons connected with them. xvi Based on our auditprocedures and according to the information and explanations given to us the Company isnot required to be registered under Section 45-IA of Reserve Bank of India Act 1934.

For PKF Sridhar & Santhanam LLP
Chartered Accountants
Firm's Registration No.003990S/S200018
R. Suriyanarayanan
Partner
Membership No. 201402
UDIN: 20201402AAAAAT1445
Place of Signature: Mumbai
Dated: 28th May 2020

Annexure-B to Independent Auditors' Report

Referred to in paragraph 2(g) on ‘Report on Other Legal and RegulatoryRequirements' of our report of even date Report on the Internal Financial Controls withreference to the aforesaid financial statements under Clause (i) of Subsection 3 ofSection 143 of the Companies Act 2013

We We have audited the internal financial controls with reference to financialstatements of Benares Hotels Limited ("the Company") as of 31 March 2020 inconjunction with our audit of the financial statements of the Company for the year endedon that date.

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal control with referenceto financial 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. These responsibilities include the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013(hereinafter referred to as "the Act").

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin 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 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 with reference 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 statements 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 expenditures 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 maintained in all material respects an adequateinternal financial controls with reference to financial statements and such internalfinancial controls were operating effectively as at 31 March 2020 based on the internalfinancial 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 PKF Sridhar & Santhanam LLP
Chartered Accountants
Firm's Registration No. 003990S/S200018
R. Suriyanarayanan
Partner
Membership No. 201402
UDIN: 20201402AAAAAT1445
Place: Mumbai
Dated: 28th May 2020

.