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EIH Ltd.

BSE: 500840 Sector: Services
NSE: EIHOTEL ISIN Code: INE230A01023
BSE 00:00 | 09 Apr 91.80 -1.05
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NSE 00:00 | 09 Apr 91.95 -0.95
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92.90

HIGH

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OPEN 92.85
PREVIOUS CLOSE 92.85
VOLUME 20355
52-Week high 112.50
52-Week low 53.65
P/E
Mkt Cap.(Rs cr) 5,741
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 92.85
CLOSE 92.85
VOLUME 20355
52-Week high 112.50
52-Week low 53.65
P/E
Mkt Cap.(Rs cr) 5,741
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

EIH Ltd. (EIHOTEL) - Auditors Report

Company auditors report

To

The Members of EIH Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone financial statements of EIH Limited("the Company") which comprise the Balance Sheet as at March 31 2020 and theStatement of Profit and Loss (including Other Comprehensive Income) the Statement of CashFlows and the Statement of Changes in Equity for the year then ended and a summary ofsignificant accounting policies and other explanatory information.

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 March 31 2020 and its profit totalcomprehensive income its cash flows and the changes in equity for the year ended on thatdate.

Basis for Opinion

We conducted our audit of the standalone financial statements in accordance with theStandards on Auditing specified under section 143(10) of the Act (SAs). Ourresponsibilities under those Standards are further described in the Auditor'sResponsibility for the Audit of the Standalone Financial Statements section of our report.We are independent of the Company in accordance with the Code of Ethics issued by theInstitute of Chartered Accountants of India (ICAI) together with the ethical requirementsthat are relevant to our audit of the standalone financial statements under the provisionsof the Act and the Rules made thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the ICAI's Code of Ethics. Webelieve that the audit evidence obtained by us is sufficient and appropriate to provide abasis for our audit 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 aseparate opinion on these matters. We have determined the matter described below to be thekey audit matter to be communicated in our report.

Sr. No. Key Audit Matter Auditor's Response
1 Assessment of Impairment of investment in a wholly owned subsidiary of the Company (Refer Note 1(l)(iii)8 38 53 to the Ind AS Standalone Financial Statements) Principal audit procedures performed:
The Company has a non-current investment in EIH Flight Services Limited (EIHFSL) Mauritius a wholly owned subsidiary of the company amounting to INR 1184.88 Million. The Company is of the view that the operations of its subsidiary represent a single cash-generating unit ('CGU'). • We have understood and tested the design implementation and operating effectiveness of the management controls over the assessment and conclusion over the impairment evaluation with regard to the investment in a wholly owned subsidiary of the Company.
The Company performed an impairment assessment and concluded that the recoverable amount was lower than the carrying amount as at March 31 2020 and accordingly the Company recognised an impairment loss of INR 161.40 Million in the Statement of Profit and Loss which has been recognised under "Exceptional items". (Refer Note 38). • Assessed the appropriateness of the valuation model to determine the recoverable amount (Value in use).
• Tested the key assumptions used in determining the recoverable amount and assessed the reasonableness of the future cash flow projections the growth rates and the discount rate.
• Performed an assessment of the reasonableness of the previously prepared projections to determine management's ability to forecast adequately and understand the reason for material variances.
Due to the multitude of factors and assumptions involved in determining the forecasted revenues/cash flows and discount rate in the projection period significant judgments are required to estimate the recoverable value. • Considered sensitivity of reasonable possibility of changes in the key assumptions and inputs to determine the effect on the recoverable amount.
Hence this is considered as a key audit matter. • Checked mathematical accuracy of the model.
• We involved our internal fair valuation specialist to test the valuation model and the discount rates used.
• Assessed the adequacy of related disclosures in the notes to the standalone financial statements and their compliance with Ind AS.

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

• The Company's Board of Directors is responsible for the other information. Theother information comprises the information included in the Management Discussion andAnalysis Directors' report including annexures to the Directors' Report Report onCorporate Governance but does not include the consolidated financial statementsstandalone financial statements and our auditor's report thereon.

• Our opinion on the standalone 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 standalone financial statements ourresponsibility is to read the other information and in doing so consider whether theother information is materially inconsistent with the standalone financial statements orour knowledge obtained during the course of our audit or otherwise appears to bematerially misstated.

• If based on the work we have performed we conclude that there is a materialmisstatement of this other information we are required to report that fact. We havenothing to report in 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 Act with respect to the preparation of these standalone financial statementsthat give a true and fair view of the financial position financial performance includingother comprehensive income cash flows and changes in equity of the Company in accordancewith the Ind AS and other accounting principles generally accepted in India. Thisresponsibility also includes maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding 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 standalone financialstatement that give a true and fair view and are free from material misstatement whetherdue 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 operations or has norealistic alternative but to do so.

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

Auditor's Responsibility for the Audit of the Standalone 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 standalonefinancial 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 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 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 the 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 standalone financial statements or if such disclosures are inadequate to modify ouropinion. Our conclusions are based on the audit evidence obtained up to the date of ourauditor's report. However future events or conditions may cause the Company to cease tocontinue as a going concern.

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

Materiality is the magnitude of misstatements in the standalone financial statementsthat individually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the standalone financial statements may be influenced. Weconsider quantitative materiality and qualitative factors in (i) planning the scope of ouraudit work and in evaluating the results of our work; and (ii) to evaluate the effect ofany identified misstatements in the standalone 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 standalone financial statementsof the current period and are therefore the key audit matters. We describe these mattersin our auditor's report unless law or regulation precludes public disclosure about thematter or when 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.

Other Matters

The management was able to perform year end physical verification of inventories onlyat certain units prior to the year end. We were able to physically observe the physicalstock verification at one unit before the year end. On account of COVID-19 relatedlockdown restrictions physical verification of inventories was performed by themanagement at certain units subsequent to the year end. We were not able to physicallyobserve the stock verification. Consequently we have performed alternate procedures toaudit the existence of inventory as per the guidance provided in SA501 "AuditEvidence - Specific Considerations for Selected Items" and have obtained sufficientappropriate audit evidence. Our report is not modified in respect of this matter.

Our opinion on the standalone financial statements and our report on Other Legal andRegulatory Requirements below is not modified in respect of these matters.

Report on Other Legal and Regulatory Requirements

1. As required by Section 143(3) of the Act based on our audit 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 including Other ComprehensiveIncome the Statement of Cash Flows and Statement of Changes in Equity dealt with by thisReport are in agreement with the relevant books of account.

d) In our opinion the aforesaid standalone financial statements comply with the Ind ASspecified under Section 133 of the Act.

e) On the basis of the written representations received from the directors as on March31 2020 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2020 from being appointed as a director in terms of Section 164(2) of theAct.

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 A". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's internal financial controls overfinancial reporting.

g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of section 197(16) of the Act as amended in our opinionand to the best of our information and according to the explanations given to us theremuneration paid by the Company to its directors during the year is in accordance withthe provisions of section 197 of 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its standalone financial statements. Refer Note 44 of the Standalone FinancialStatements.

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses. Refer Note 41 of the StandaloneFinancial Statements.

iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company. Refer Note 45 of the StandaloneFinancial Statements.

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

For Deloitte Haskins and Sells LLP
Chartered Accountants
( Firm's Registration No. 117366W/W-100018)
Manjula Banerji
Place: New Delhi Partner
Date: June 26 2020 Membership No. 086423
(UDIN: 20086423AAAAAG2322)

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

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

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

We have audited the internal financial controls over financial reporting of EIH Limited("the Company") as of March 31 2020 in conjunction with our audit of thestandalone Ind AS financial statements 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 and maintaining internalfinancial controls based on "the internal control over financial reporting criteriaestablished by the Company considering the essential components of internal control statedin the Guidance Note on Audit of Internal Financial Controls Over Financial Reportingissued by the Institute of Chartered Accountants of India". 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 respective Company's policies the safeguarding of itsassets the prevention and detection of frauds and errors the accuracy and completenessof the accounting records and the timely preparation of reliable financial informationas required under the Companies Act 2013.

Auditor's Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting of the Company based on our audit. We conducted ouraudit in accordance with the Guidance Note on Audit of Internal Financial Controls OverFinancial Reporting (the "Guidance Note") issued by the Institute of CharteredAccountants of India and the Standards on Auditing prescribed under Section 143(10) of theCompanies Act 2013 to the extent applicable to an audit of internal financial controls.Those Standards and the Guidance Note require that we comply with ethical requirements andplan and perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 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 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 financial statements for external purposes in accordance with generallyaccepted accounting principles. A Company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the Company are being made only in accordance with authorisations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorised acquisition use or disposition of theCompany's assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting

Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.

Opinion

In our opinion to the best of our information and according to the explanations givento us the Company has in all material respects an adequate internal financial controlssystem over financial reporting and such internal financial controls over financialreporting were operating effectively as at March 31 2020 based on "the criteria forinternal financial control over financial reporting established by the respective Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Reporting issued by the Institute ofChartered Accountants of India".

For Deloitte Haskins and Sells LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Manjula Banerji
Place: New Delhi Partner
Date: June 26 2020 Membership No. 086423
(UDIN: 20086423AAAAAG2322)

ANNEXURE B TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2 under 'Report on Other Legal and Regulatory Requirements'section of our report of even date)

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

(b) The Company has a programme of verification of fixed assets to cover all the itemsin a phased manner over a period of three years which in our opinion is reasonablehaving regard to the size of the Company and the nature of its assets. Pursuant to theprogramme certain fixed assets were physically verified by the Management during theyear. According to the information and explanations given to us no material discrepancieswere noticed on such verification.

(c) According to the information and explanations given to us and the records examinedby us and based on the examination of the registered sale deed / transfer deed /conveyance deed provided to us we report that the title deeds comprising all theimmovable properties of land and buildings which are freehold are held in the name of theCompany as at the balance sheet date. In respect of immovable properties of land andbuildings that have been taken on lease and disclosed as fixed assets in the financialstatements the lease agreements are in the name of the Company where the Company is thelessee in the agreement.

(ii) As explained to us the management was able to perform year end physicalverification of inventories only at certain units prior to the year end. We were able tophysically observe the physical stock verification at one unit before the year end. Onaccount of COVID-19 related lockdown restrictions physical verification of inventorieswas performed by the management at certain units subsequent to the year end. We were notable to physically observe the stock verification. Consequently we have performedalternate procedures to audit the existence of inventory as per the guidance provided inSA501 "Audit Evidence - Specific Considerations for Selected Items" and haveobtained sufficient appropriate audit evidence. As explained to us no materialdiscrepancies were noticed on physical verification.

(iii) 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 Companies Act 2013.

(iv) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 185 and 186 of the Companies Act2013 in respect of grant of loans making investments and providing guarantees andsecurities as applicable.

(v) According to the information and explanations given to us the Company has notaccepted any deposits during the year.

(vi) The maintenance of cost records has not been specified by the Central Governmentunder section 148(1) of the Companies Act 2013.

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

(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees' State Insurance Income-tax Goods and Services TaxCustoms Duty Luxury Tax cess and other material statutory dues applicable to it to theappropriate authorities.

(b) There were no undisputed amounts payable in respect of Provident Fund Employees'State Insurance Income-tax Goods and Services Tax Customs Duty Luxury Tax cess andother material statutory dues in arrears as at March 31 2020 for a period of more thansix months from the date they became payable.

(c) Details of dues of Income-tax Sales Tax Service Tax Customs Duty Value AddedTax and Luxury Tax which have not been deposited as on March 31 2020 on account ofdisputes are given below:

(Rupees million)

S. No Name of Statute Nature of Dues Forum where Dispute is Pending Period to which the Amount Relates(1) Amount unpaid(2)
1 Income Income Tax Assessing Officer 2008-09 and 2009-10 -
Tax Act 1961 Appellate Authority up to Commissioner of Income Tax Appeals 2000-01 2007-08 2008-09 2010-11 2011-12 2012-13 201314 2014-15 2015-16 and 2016-17
Total -
2 Finance Act 1994 Service Tax Customs Excise and Service Tax Appellate Tribunal 2011 to 2015 2012 to 2016 11.57
The Honorable Supreme Court of India 2004 to 2006 3.86
Total 15.43
3 Sales Tax Sales Tax and Value Added Tax Appellate Authority upto Commissioner level 2005-06 2010-11 2013-14 2014 -15 2016-17 23.82
Rajasthan Tax Board 2011-12 2012-13 2013-14
West Bengal Appellate and Revisional Board 2008-09 2009-10 2013-14 2014-15 2015-16 6.20
Mumbai High Court 1999-00 1.23
Total 31.25
4 Customs Act 1962 Customs Duty Delhi High Court 2008-09 429.66
Total 429.66
5 Rajasthan Tax on Luxuries (In Hotel and Lodging Houses) Act 1990 Luxury Tax Jodhpur High Court 2010-11 to 2013-14 1.11
Total 1.11

(1) Period in respect of income tax represent assessment year.

(2) Net of INR 341.40 million paid under protest.

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in the repayment of loans or borrowings to banks. TheCompany has neither taken any loans or borrowings from financial institutions andgovernment nor has issued any debentures.

(ix) In our opinion and according to the information and explanations given to us theterm loans have been applied by the Company during the year for the purposes for whichthey were obtained. The Company has not raised moneys by way of initial public offer orfurther public offer (including debt instruments).

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

(xi) In our opinion and according to the information and explanations given to us theCompany has paid / provided managerial remuneration in accordance with the requisiteapprovals mandated by the provisions of section 197 read with Schedule V to the CompaniesAct 2013.

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

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

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

(xv) In our opinion and according to the information and explanations given to usduring the year the Company has not entered into any non-cash transactions with itsdirectors or directors of its holding subsidiary or associate company or personsconnected with them and hence provisions of section 192 of the Companies Act 2013 are notapplicable.

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

For Deloitte Haskins and Sells LLP
Chartered Accountants
(Firm's Registration No. 117366W/W-100018)
Manjula Banerji
Place: New Delhi Partner
Date: June 26 2020 Membership No. 086423
(UDIN: 20086423AAAAAG2322)

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