To the Members of
Best Eastern Hotels Limited
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying standalone financial statements of Best EasternHotels Limited ("the Company") which comprise the Balance Sheet as at 31stMarch-2022 the Statement of Profit and Loss (including Other Comprehensive Income) thestatement of Changes in Equity and the Statement of Cash Flow for the year then ended onthat date and a summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as "standalone financial statements")
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 Companies Act 2013 ("the Act") in the manner so required and give a trueand fair view in conformity with the Indian Accounting Standards prescribed under section133 of the Act read with the Companies (Indian Accounting Standards) Rules 2015 asamended ("Ind AS") and other accounting principles generally accepted in Indiaof the state of affairs of the Company as at 31st March 2022; its Loss totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.
Basis of Opinion
We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing (SAs) specified under section 143(10) of the Act. Our responsibilityunder those Standards are further described in the Auditor's Responsibilities for theAudit of the Standalone Financial Statements section of our report. We are independent ofthe Company in accordance with the Code of Ethics issued by the Institute of CharteredAccountants of India (ICAI) together with the ethical requirements that are relevant toour audit of the standalone financial statements under the provisions of the Act and theRules made thereunder and we have fulfilled our other ethical responsibilities inaccordance with these requirements and the ICAI's Code of Ethics. We believe that theaudit evidence we have obtained is sufficient and appropriate to provide a basis for ouraudit opinion on the standalone financial statements.
Key Audit Matters
Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the standalone financial statements of the current period.These matters were addressed in the context of our audit of the standalone financialstatements as a whole and in forming our opinion thereon and we do not provide a separateopinion on these matters. We have determined that there are no key audit matters tocommunicate in our report.
Information Other than the Standalone Financial Statements and Auditor's Report Thereon
The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the ManagementDiscussion and Analysis Board's Report including Annexures to Board's Report BusinessResponsibility Report Corporate Governance and Shareholder's information but does notinclude the standalone financial statements and our auditor's report thereon.
Our opinion on the standalone financial statements does not cover the other informationand we do not express any form of assurances conclusion thereon.
In connection with our audit of the standalone financial statements our responsibilityis to read the other information and in doing do consider whether the other informationis materially inconsistent and with the standalone financial statements or our knowledgeobtained during the course of our audit or otherwise appears to be materially misstated.If based on the work we have performed we conclude that there is material misstatementof this other information we are required to report that fact. We have nothing to reportin this regard.
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 preparationand presentation of these standalone financial statements that give a true and fair viewof the financial position financial performance total comprehensive income changes inequity and cash flows of the Company in accordance with the Ind AS and accountingprinciples generally accepted in India. This responsibility also includes maintenance ofadequate accounting records in accordance with the provisions of the Act for safeguardingthe 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 standalone financial statements that give a true andfair view and are free from material misstatement whether due to fraud or error.
In preparing the standalone financial statements management is responsible forassessing the Company's ability to continue as a going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessmanagement either intends to liquidate the Company or to cease options or has norealistic alternative but to do so.
The Board of Directors are responsible for overseeing the Company's financial reportingprocess.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the standalonefinancial 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. Reasonable assuranceis a high level of assurance but is not a guarantee that an audit conducted in accordancewith SAs will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if individually or in theaggregate they could reasonably be expected to influence the economic decisions of userstaken on the basis of these standalone 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 Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness 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 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 misstatement in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements 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 2020 ("the Order")issued by the Central Government in terms of Section 143(11) of the Act we give in theAnnexure-A a statement on the matters specified in the paragraph 3 and 4 of the order tothe extent applicable.
2. 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 Statement of Profit & Loss including Other ComprehensiveIncome Statement of Change in Equity and Cash Flow Statement dealt with by this reportare in agreement with the books of account;
d. In our opinion the aforesaid standalone (Ind AS) financial statements comply withthe Ind Accounting Standards specified under Section 133 of the Act read with relevantrules issued thereunder;
e. On the basis of the written representations received from the directors as on31.03.2022 and taken on record by the Board of Directors we report that none of thedirectors is disqualified as on 31st March 2022 from being appointed as director in termsof Section 164 (2) of the Act;
f. With respect to the adequacy of internal financial controls over financial reportingof the Company and the operating effectiveness of such controls refer to our separatereport in Annexure-B. Our report expresses an unmodified opinion on the adequacy andoperating effectiveness of the Company's internal financial controls over financialreporting.
g. In our opinion and to the best of our information and according to the explanationsgiven to us the managerial remuneration paid/provided by the Company to its directors forthe year ended 31st March 2022 is in accordance with the provisions of section197 of the Act read with Schedule V to the Act.
h. 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 does not have any pending litigation which would impact its financialposition;
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 to theInvestor Education and Protection Fund by the Company during the year.
iv. (a) The management has represented that to the best of its knowledge and beliefno funds have been advanced or loaned or invested by the company to or in any otherperson(s) or entities including foreign entities ("Intermediaries") with theunderstanding whether recorded in writing or otherwise that the intermediary shallwhether directly or indirectly lend or invest in other persons or entities identified inany manner by or on behalf of the company (Ultimate Beneficiaries) or provide anyguarantee security or the like on behalf of ultimate beneficiaries.
(b) The management has represented that to the best of its knowledge and belief nofunds have been received by the company from any person(s) or entities including foreignentities ("Funding Parties") with the understanding whether recorded in writingor otherwise that such company shall whether directly or indirectly lend or invest inother persons or entities identified in any manner whatsoever by or on behalf of thefunding party (ultimate beneficiaries) or provide guarantee security or the like onbehalf of the Ultimate beneficiaries.
(c) Based on the audit procedures that have been considered reasonable and appropriatein the circumstances nothing has come to our notice that has caused us to believe thatthe above representations given by the management under sub-clause (i) and (ii) of Rule1(e) as provided under (a) and (b) above contain any material misstatement.
v. The Company has not declared any dividend during the year or in the previous year.
ANNEXURE A' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 1 under Report on Other Legal and RegulatoryRequirements' section of our report to the Best Eastern Hotels Limited of even date)
To the best of our information and according to the explanations provided to us by theCompany and the books of account and records examined by us in the normal course of auditwe state that:
i. In respect of the Company's Property Plant and Equipment and Intangible Assets:
(a) (A) The Company has maintained proper records showing full particulars includingquantitative details and situation of Property Plant and Equipment.
(B) The Company does not have any intangible assets.
(b) The Company has a program of physical verification of Property Plant and Equipmentso to cover all the assets once every three years which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. Pursuant to theprogram certain Property Plant and Equipment were due for verification during the yearand 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) Based on our examination of the property tax receipts and lease agreement for landon which building is constructed registered sale deed / transfer deed / conveyance deedprovided to us we report that the title in respect of self-constructed buildings andtitle deeds of all other immovable properties (other than properties where the company isthe lessee and the lease agreements are duly executed in favour of the lessee) disclosedin the financial statements included under Property Plant and Equipment are held in thename of the Company as at the balance sheet date.
(d) The Company has not revalued any of its Property Plant and Equipment (includingright- of-use assets) and intangible assets during the year.
(e) No proceedings have been initiated during the year or are pending against theCompany as at March 31 2022 for holding any benami property under the Benami Transactions(Prohibition) Act 1988 (as amended in 2016) and rules made thereunder.
ii. (a) In our opinion the inventories have been physically verified during the yearby the Management at reasonable intervals and in our opinion the frequency ofverification is reasonable. As explained to us no material discrepancies were noticed onsuch physical verification.
(b) The Company has not been sanctioned working capital limits in excess of ' 5 crorein aggregate at any points of time during the year from banks or financial institutionson the basis of security of current assets and hence reporting under clause 3(ii)(b) ofthe Order is not applicable.
iii. According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the Company has not made investments inprovided any guarantee or security or granted any loans or advances in the nature ofloans secured or unsecured to companies firms Limited Liability Partnership or anyother parties.Hence reporting under clause (vi) of the Order is not applicable to theCompany.
iv. The Company has complied with the provisions of Sections 185 and 186 of theCompanies Act 2013 in respect of loans granted investments made and guarantees andsecurities provided as applicable.
v. The Company has not accepted any deposit or amounts which are deemed to be deposits.Hence reporting under clause 3(v) of the Order is not applicable.
vi. The maintenance of cost records has not been specified by the Central Governmentunder sub- section (1) of section 148 of the Companies Act 2013 for the businessactivities carried out by the Company. Hence reporting under clause (vi) of the Order isnot applicable to the Company.
vii. In respect of statutory dues:
(a) In our opinion the Company has generally been regular in depositing undisputedstatutory dues including Goods and Services tax Provident Fund Employees' StateInsurance Income Tax Sales Tax Service Tax duty of Custom duty of Excise Value AddedTax Cess and other material statutory dues applicable to it with the appropriateauthorities.
There were no undisputed amounts payable in respect of Goods and Service tax ProvidentFund Employees' State Insurance Income Tax Sales Tax Service Tax duty of Custom dutyof Excise Value Added Tax Cess and other material statutory dues in arrears as at March31 2022 for a period of more than six months from the date they became payable.
(b) The Company did not have any statutory dues referred to in sub-clause (a) abovewhich have not been deposited as on March 31 2022 on account of disputes.
viii. There were no transactions relating to previously unrecorded income that havebeen surrendered or disclosed as income during the year in the tax assessments under theIncome Tax Act 1961 (43 of 1961).
ix. (a) The Company has not defaulted in repayment of loans or other borrowings or inthe payment of interest thereon to the lenders.
(b) The Company has not been declared willful defaulter by any bank or financialinstitution or government or any government authority.
(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company theTerm Loan taken by the Company during theyear has been applied for the purpose for which loans were obtained.
(d) On an overall examination of the financial statements of the Company funds raisedon short- term basis have prima facie not been used during the year for long-termpurposes by the Company.
(e) On an overall examination of the financial statements of the Company the Companyhas not taken any funds from any entity or person on account of or to meet the obligationsof its associate companies
(f) The Company has not raised any loans during the year on the pledge of securitiesandhence reporting on clause 3(ix)(f) of the Order is not applicable.
x. (a) The Company has not raised moneys by way of initial public offer or furtherpublic offer (including debt instruments) during the year and hence reporting under clause
3(x)(a) of the Order is not applicable.
(b) During the year the Company has not made any preferential allotment or privateplacement of shares or convertible debentures (fully or partly or optionally) and hencereporting under clause 3(x)(b) of the Order is not applicable.
xi. (a) No fraud by the Company and no material fraud on the Company has been noticedor reported during the year.
(b) No report under sub-section (12) of section 143 of the Companies Act has been filedin Form ADT-4 as prescribed under rule 13 of Companies (Audit and Auditors) Rules 2014with the Central Government during the year and upto the date of this report.
(c) We have taken into consideration the whistle blower complaints received by theCompany during the year (and upto the date of this report) while determining the naturetiming and extent of our audit procedures.
xii. The Company is not a Nidhi Company and hence reporting under clause (xii) of theOrder is not applicable.
xiii. In our opinion the Company is in compliance with Section 177 and 188 of theCompanies Act 2013 with respect to applicable transactions with the related parties andthe details of related party transactions have been disclosed in the standalone financialstatements as required by the applicable accounting standards.
xiv. (a) In our opinion the Company has an adequate internal audit system commensuratewith the size and the nature of its business.
(b) We have considered the internal audit reports for the year under audit issued tothe Company during the year and till date in determining the nature timing and extent ofour audit procedures.
xv. In our opinion during the year the Company has not entered into any non-cashtransactions with its directors or persons connected with its directors. and henceprovisions of section 192 of the Companies Act 2013 are not applicable to the Company.
xvi. (a) In our opinion the Company is not required to be registered under section45-IA of the Reserve Bank of India Act 1934. Hence reporting under clause 3(xvi)(a) (b)and (c) of the Order is not applicable.
(b) In our opinion there is no core investment company within the Group (as defined inthe Core Investment Companies (Reserve Bank) Directions 2016) and accordingly reportingunder clause 3(xvi)(d) of the Order is not applicable.
xvii. The Company has not incurred cash losses during the financial year covered by ouraudit and the immediately preceding financial year.
xviii. There has been no resignation of the statutory auditors of the Company duringthe year.
xix. On the basis of the financial ratios ageing and expected dates of realisation offinancial assets and payment of financial liabilities other information accompanying thefinancial statements and our knowledge of the Board of Directors and Management plans andbased on our examination of the evidence supporting the assumptions nothing has come toour attention which causes us to believe that any material uncertainty exists as on thedate of the audit report indicating that Company is not capable of meeting its liabilitiesexisting at the date of balance sheet as and when they fall due within a period of oneyear from the balance sheet date. We however state that this is not an assurance as tothe future viability of the Company. We further state that our reporting is based on thefacts up to the date of the audit report and we neither give any guarantee nor anyassurance that all liabilities falling due within a period of one year from the balancesheet date will get discharged by the Company as and when they fall due.
xx. The provisions of Section 135 is not applicable to the Company hence the reportingunder clause (xx) is not applicable.
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")
We have audited the internal financial controls over financial reporting of BestEastern Hotels Limited ("the Company") as of 31 March 2022 in conjunction withour audit of the standalone financial statements of the Company for the year ended on thatdate.
Management's Responsibility for Internal Financial Controls
The Board of Directors of the Company is responsible for establishing and maintaininginternal financial controls based on the internal control over financial reportingcriteria established by the Company considering the essential components of internalcontrol stated in the Guidance Note on Audit of Internal Financial Controls over FinancialReporting issued by the Institute of Chartered Accountants of India (ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls over Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain reasonable assurance about whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy ofthe internal financial controls system over financial reporting and their operatingeffectiveness. Our audit of internal financial controls over financial reporting includedobtaining an understanding of internal financial controls over financial reportingassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgment including the assessment of the risks ofmaterial misstatement of the standalone financial statements whether due to fraud orerror.
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 systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of standalone 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 the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the company;
2. provide reasonable assurance that transactions are recorded as necessary to permitpreparation of standalone financial statements in accordance with generally acceptedaccounting principles and that receipts and expenditures of the company are being madeonly in accordance with authorisations of management and directors of the company; and
3. provide reasonable assurance regarding prevention or timely detection ofunauthorised acquisition use or disposition of the company's assets that could have amaterial effect on the standalone financial statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
In our opinion 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 31 March 2022 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 Sancheti & Co. Chartered Accountants |
|(FRN : 000016C) |
|(Pradeep Sancheti) Partner |
|M.No. : 074930 |
|Place : Mumbai |
|Dated : 30th May 2022 |
|UDIN 22074930AJVQQG2408 |