To the Members of HLV Limited
(Formerly Known as Hotel Leelaventure Limited) Report on the Standalone FinancialStatements Opinion
We have audited the accompanying financial statements of HLV Limited (Formerly Knownas Hotel Leelaventure Limited) ("the Company") which comprise the BalanceSheet as at 31st March 2021 the Statement of Profit and Loss (including OtherComprehensive Income) the Statement of Changes in Equity and the Statement of Cash Flowsfor the year ended on that date and notes to the financial statements including asummary of significant accounting policies and other explanatory information (hereinafterreferred 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 Indian Accounting Standards (Ind AS) specified undersection 133 of the Act and other accounting principles generally accepted in India of thestate of affairs of the Company as at 31st March 2021 and Loss includingOther Comprehensive Income changes in equity and its cash flows for the year ended onthat date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing specified undersection 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditors Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India (ICAI) together with theethical requirements that are relevant to our audit of the financial statements under theprovisions of the Act and the Rules thereunder and we have fulfilled our other ethicalresponsibilities in accordance with these requirements and the Code of Ethics. We believethat the audit evidence we have obtained is sufficient and appropriate to provide a basisfor our opinion.
Emphasis of Matter
We draw attention to the following matters in notes to the financial statements: -
Note 34.1(a) relating to enhancement in lease rentals unilateral termination of leaseagreement of 18000 sq. mtrs. of land by Airports Authority of India (AAI) relating toMumbai hotel and eviction proceedings initiated by them which the Company is legallycontesting. Disputed amount not provided in the Books for the period up to 31st March2021 cumulatively amounts to Rs. 8000lakhs (Previous Year Rs. 6592 lakhs).
Note 34.1(b) relating to the demands made by AAI relating to Royalty Minimum GuaranteeFees in respect of 11000 sq. mts. of land in Mumbai cumulatively amounting to Rs. 80705lakhs up to 31st January 2019 (Previous Year Rs. 28537 lakhs up to 31st January2017) not provided in the Books as the liability is disputed and not crystalized as perthe legal opinion and the additional cost the company may have to incur towardsrestoration of FSI which is not ascertainable.
Note 34.12 relating to the uncertainty and impact of Covid-19 pandemic on thecompanys operation and the results as assessed by the Management. The actual resultsmay differ from such estimates depending on future developments.
Material uncertainty related to Going Concern
We draw attention to Note no.34.4 in the Financial Statements regarding the preparationof financial statements on going concern basis for the reasons stated therein. Howevermatters stated in Emphasis of Matter above indicate that a material uncertainty existsthat may cast significant doubt on companys ability to continue as a going concern.As stated in Note no. 34.4 the appropriateness of assumption of going concern isdependent upon getting favorable judgment / orders / settlement in respect of disputeswith Airports Authority of India and the impact of Covid-19 in continuing the Mumbai Hoteloperations.
Our conclusion is not modified in respect of this matter.
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.
We have determined the matters described below to be the key audit matter to becommunicated in our Report
|Key audit matter ||How our audit addressed the key audit matter |
|Contingent Liabilities in respect of claim made by Airport Authority of India (AAI) (Ref. Note No.34.1 ||Obtained Lease Agreements and supplementary Agreement with Airport Authority of India (AAI). Correspondence from and with AAI eviction orders judgment of Arbitrator Judgment of Delhi High court. Petition filed before Supreme Court and their judgment. Petition filed before Eviction officer and their revised claim various Legal opinions case filed before Bombay City Civil Court application made before Settlement Advisory Committee constituted by the Board of AAI submissions made before them on various meetings. |
Information Other than the Financial Statements and Auditors Report thereon
The Companys Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the AnnualReport but does not include the financial statements and our auditors 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 during thecourse of our audit or otherwise appears to be materially 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.
Responsibilities of Management for the Financial Statements
The Companys 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 total comprehensiveIncome changes in equity and cash flows of the Company in accordance with the accountingprinciples generally accepted in India including the Ind AS specified under section 133of the Act. This responsibility also includes maintenance of adequate accounting recordsin accordance with the provisions of the Act for safeguarding of the assets of the Companyand for preventing and detecting frauds and other irregularities; selection andapplication of appropriate accounting policies; making judgments and estimates that arereasonable and prudent; and design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the accuracy andcompleteness of the accounting records relevant to the preparation and presentation ofthe financial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.
In preparing the financial statements management is responsible for assessing theCompanys 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 are also responsible for overseeing the companys 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 ahigh level of assurance but is not a guarantee that an audit conducted in accordance withStandards on Auditing will always detect a material misstatement when it exists.Misstatements can arise from fraud or error and are considered material if individuallyor in the aggregate they could reasonably be expected to influence the economic decisionsof users taken on the basis of these financial statements.
As part of an audit in accordance with Standards on Auditing we exercise professionaljudgment and maintain professional skepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the financial statementswhether due to fraud or error design and perform audit procedures responsive to thoserisks and obtain audit evidence that is sufficient and appropriate to provide a basis forour opinion. The risk of not detecting a material misstatement resulting from fraud ishigher than for one resulting from error as fraud may involve collusion forgeryintentional omissions misrepresentations or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit in orderto 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 reasonableness ofaccounting estimates and related disclosures made by management.
Conclude on the appropriateness of managements use of the going concern basis ofaccounting and based on the audit evidence obtained whether a material uncertaintyexists related to events or conditions that may cast significant doubt on theCompanys ability to continue as a going concern. If we conclude that a materialuncertainty exists we are required to draw attention in our auditors report to therelated disclosures in the financial statements or if such disclosures are inadequate tomodify our opinion. Our conclusions are based on the audit evidence obtained up to thedate of our auditors report. However future events or conditions may cause theCompany to cease to continue as a going concern.
Evaluate the overall presentation structure and content of the financial statementsincluding the disclosures and whether the financial statements represent the underlyingtransactions 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 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 ourauditors 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.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order 2016 ("theOrder") issued by the Central Government in terms of Section 143(11) of the Act wegive in "Annexure A" a statement on the matters specified in paragraph 3 and 4of the Order.
2. 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 financial statements dealt with by this report are in agreement with the booksof accounts.
d. In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder Section 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.
e. The matter described in paragraph relating to Emphasis of Matter may have an adverseeffect on the functioning of the company.
f. On the basis of the written representations received from the directors as on 31stMarch 2021 taken on record by the Board of Directors out of six directors two directorsviz. Mr. Vinay Kapadia and Mr. Vijay Sharma are disqualified as on 31st March2021 from being appointed as a director in terms of Section 164 (2) of the Act.
g. 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".
h. As required by section 197(16) of the Act we report that the Company has notpaid/provided remuneration to its Director during the year.
i. 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. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements (Refer Note 34.5 to the financial statements);
ii. The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long-term contracts. We areinformed that the company did not have any pending derivative contracts.
iii. There has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company.
For n. S. Shetty & Co.
FRNo. : 0110101W
n. S. Shetty
M. No. 035083
Date: 19th June 2021
AnnEXuRE - A TO THE IndEpEndEnT AudITORS REpORT
(Referred to in paragraph 1 under "Report on Other Legal and RegulatoryRequirements section of our report of even date)
Based on the audit procedures performed for the purpose of reporting a true and fairview on the financial statements of the Company and taking into consideration theinformation and explanations given to us and the books of account and other recordsexamined by us in the normal course of audit and to the best of our knowledge and beliefwe report that:
i. (a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets.
(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.Pursuant to the programme certain fixed assets were physically verified during the year.However due to 2nd wave of COVID-19 and Lockdown in Mumbai final report is awaited. Inour opinion this periodicity of physical verification is reasonable having regard to thesize of the Company and the nature of its assets.
(c) Except disputes relating to the title deeds/renewal of lease agreement as detailedhereunder according to the information and explanations given to us and on the basis ofour examination of the records of the Company the title deeds of immovable propertiesdisclosed in the Financial Statements are held in the name of the Company.
|particulars ||number of cases ||Carrying value as on 31st March 2021 (Rs. In lakhs) ||Remarks |
|Land at Hyderabad ||Five ||1269.01 ||Title deeds are under dispute |
|Building constructed on leasehold land at Mumbai ||One ||21316.04 ||Lease agreement not renewed since 11th January 2016 (refer Note-34.1) to the Financial Statements. |
ii. The management has conducted physical verification of Inventory at reasonableintervals. In our opinion the frequency of such verification is reasonable. Thediscrepancies noticed on such verification between the physical stock and book recordswere not material and have been properly dealt in the books of account.
iii. The Company has not granted secured or unsecured loans to Companies firmsLimited Liability Partnerships or other parties covered in the register maintained underSection 189 of the act during the year. Hence reporting under clause 3 (iii) of the Orderis not applicable to the company.
iv. The Company has not granted any loans or provided any guarantees or security to theparties covered in Section 185 of the Act. The company has complied with the provisions ofSection 186 of the Act in respect of investments.
v. The Company has not accepted any deposits within the meaning from Section 73 to 76of the Act and the Companies (Acceptance of Deposits) Rules 2014 (as amended) during theyear. Hence reporting under clause 3(v) of the Order is not applicable to the company.
vi. The Central Government has not prescribed the maintenance of cost records underSection 148 (1) of the Act for any of the services rendered by the Company. vii.According to the information and explanations given to us in respect of Statutory dues :
(a) The Company has generally been regular in depositing undisputed statutory duesincluding Provident Fund Employees State Insurance Income Tax Goods and ServiceTax Customs Duty Cess and other material statutory dues applicable to it with theappropriate authorities.
(b) There were no undisputed amounts payable in respect of Provident FundEmployees State Insurance Income Tax Goods and Service Tax Customs Duty Cess andother material statutory dues in arrears as at 31st March 2021 for a period ofmore than six months from the date they became payable.
(c) Details of disputed Sales Tax Service Tax Luxury Tax and Value Added Tax whichhave not been deposited as at 31st March 2021 are as under:
|name of the statute ||nature of dues ||Amount (in lakhs)* ||period to which the amount relates ||Forum where dispute is pending |
|Finance Act 1994 ||Service Tax Interest and penalty ||2591.24 ||FY 2007-08 to 2011-12 ||CESTAT Bangalore |
|Maharashtra VAT 2002 ||VAT with interest and penalty ||342.29 ||2007-082009-10 to 2011-12 and 2013-14 ||Jt. Commissioner of Appeals-VAT Mumbai |
|Maharashtra VAT 2002 ||VAT ||39.73 ||FY 2008-09 ||VAT Tribunal Mumbai |
|Finance Act 1994 ||Service Tax with Penalty ||122.94 ||July 2012 to March 2015 ||CESTAT Mumbai |
|Kerala Tax on Luxury 1976 ||Luxury Tax interest and penalty ||68.88 ||2010-11 2011-12 ||Deputy Commissioner of (Appeals) Thiruvananthapuram |
|KGST and KVAT Act ||KGST and KVAT ||46.58 ||FY 2011-12 ||Matter remanded back to the Assessing Officer by High Court. |
|Income Tax Act 1961 ||TDS ||74.83 ||2012-13 ||CIT Appeals New Delhi |
* Net of amounts paid under protest.
viii. (a) The Company has not defaulted in repayment of loans / dues to banks andfinancial institutions except few days delays.
(b) As explained the Company did not have any outstanding loans or borrowing fromGovernment during the year.
ix The Company did not raise any money by way of initial public offer or further publicoffer including debt instruments. However the Term Loan availed during the year from Bankhas been utilized for the purpose for which it has been taken.
x. No material fraud by the Company or on the Company by its officers or employees hasbeen noticed or reported during the period covered by our audit.
xi. The Company has not paid/provided for managerial remuneration during the year.Hence reporting under clause 3 (xi) of the order is not applicable to the company.
xii. In our opinion and according to the information and explanations given to us theCompany is not a nidhi company. Hence reporting under clause 3 (xii) of the order is notapplicable to the company.
xiii. In our opinion all transactions with the related parties are in compliance withSection 177 and 188 of the Act where applicable and the requisite details have beendisclosed in the financial statements as required by the applicable Indian AccountingStandards.
xiv. The Company has not made any preferential allotment or private placement of sharesor fully or partly convertible debentures during the year. Hence reporting under clause 3(xiv) of the order is not applicable to the company.
xv. In our opinion the Company has not entered into non-cash transactions withdirectors or persons connected with them covered under Section 192 of the Act during theyear.
xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934.
For n. S. Shetty & Co.
FRNo. : 0110101W
n. S. Shetty
M. No. 035083
Date: 19th June 2021
AnnEXuRE - B TO THE IndEpEndEnT AudITORS REpORT
(Referred in para 2(g) 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 HLVLimited (Formerly Known as Hotel Leelaventure Limited) ("the Company") as of31st March 2021 in conjunction with our audit of the financial statements ofthe Company for the year ended on that date.
Managements 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. 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 respective companys policies thesafeguarding 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 Companies Act 2013.
Our responsibility is to express an opinion on the internal financial controls overfinancial reporting of the Company based on our audit. We conducted our audit inaccordance with the Guidance Note on Audit of Internal Financial Controls Over FinancialReporting (the "Guidance Note") issued by the Institute of Chartered Accountantsof India and the Standards on Auditing prescribed under Section 143(10) of the CompaniesAct 2013 to the extent applicable to an audit of internal financial controls. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand 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 performingprocedures to obtain audit evidence about the adequacy of the internal financial controlssystem over financial reporting and their operating effectiveness. Our audit of internalfinancial controls over financial reporting included obtaining an understanding ofinternal financial controls over financial reporting assessing the risk that a materialweakness exists and testing and evaluating the design and operating effectiveness ofinternal control based on the assessed risk. The procedures selected depend on theauditors judgement including the assessment of the risks of material misstatementof the financial statements whether due to fraud or error. We believe that the auditevidence we have obtained is sufficient and appropriate to provide a basis for our auditopinion on the internal financial controls system over financial reporting of the Company.
Meaning of Internal Financial Controls Over Financial Reporting
A companys internal financial control over financial reporting is a processdesigned to provide reasonable assurance regarding the reliability of financial reportingand the preparation of financial statements for external purposes in accordance withgenerally accepted accounting principles. A companys 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 financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the company are being made only inaccordance with authorizations of management and directors of the company; and
(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the companys assets that could havea material effect on the financial statements.
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 31st March 2021 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting issued by the Institute of CharteredAccountants of India.
For n. S. Shetty & Co.
Chartered Accountants FRNo. : 0110101W
n. S. Shetty
M. No. 035083
Date: 19th June 2021