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Hotel Rugby Ltd.

BSE: 526683 Sector: Services
NSE: HOTELRUGBY ISIN Code: INE275F01019
BSE 00:00 | 22 Oct 3.89 0.18
(4.85%)
OPEN

3.89

HIGH

3.89

LOW

3.71

NSE 00:00 | 22 Oct 3.50 0.15
(4.48%)
OPEN

3.50

HIGH

3.50

LOW

3.50

OPEN 3.89
PREVIOUS CLOSE 3.71
VOLUME 6324
52-Week high 5.13
52-Week low 0.91
P/E
Mkt Cap.(Rs cr) 6
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 3.89
CLOSE 3.71
VOLUME 6324
52-Week high 5.13
52-Week low 0.91
P/E
Mkt Cap.(Rs cr) 6
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Hotel Rugby Ltd. (HOTELRUGBY) - Auditors Report

Company auditors report

To the Members of Hotel Rugby Limited

Report on the Audit of the Financial Statements Qualified Opinion

We have audited the accompanying financial statements of Hotel Rugby Limited ("theCompany") which comprise the balance sheet as at 31st March 2020 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 the significant accounting policies and other explanatoryinformation.

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matter described in the Basis for QualifiedOpinion section of our report the aforesaid financial statements give the informationrequired by the Companies Act 2013 ("Act") in the manner so required and give atrue and fair view in conformity with the accounting principles generally accepted inIndia of the state of affairs of the Company as at 31st March 2020 and loss and othercomprehensive income changes in equity and cash flows for the year ended on that date.

Basis for Qualified Opinion

a. We are unable to verify the non current investment amounting to Rs. 400000 and thevaluation thereof as the supporting evidences for the same has not been produced for ourverification.

These investments in Equity Instruments are taken at cost and not valued at Fair Valuethrough profit or loss or fair value thorough comprehensive Income as required by Ind As109 (Refer Note 1.1)

b. The accounts are prepared on a going concern basis and all the property plant andequipment of the company have been disposed off long back and company is exploring to newbusiness areas.(Refer Note 20) We conducted the audit in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Act. Our responsibilities underthose SAs are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the Act and the Rules thereunder and we havefulfilled our other ethical responsibilities in accordance with these requirements and theCode of Ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our opinion.

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.

Description of Key Audit Matter

A. Non Current Investments

The Company has made non current investments in equity shares of certain co-operativebanks which have been stated at cost in the financial statements. The key audit matter inthe above investments was value at which these are recognized in the financial statementsand whether the same is as per the requirements of IND AS 109.(Refer note 1.1)

How the matter was addressed in the audit

The audit procedures included:

- Identification:

For the purpose of identification we sought the share certificates for the investmentsmade in each of the equity shares stated at an aggregate cost of Rs. 400000 in thefinancial statements. This evidence was required for

identification of investments made.

- Controls:

The ownership control of the investments could be ascertained if the invested shareswere in the custody of the management. The production of these investments could establishthe control of the management on the above investments.

- Completeness and accuracy of the value at which stated:

The equity investments are required to be valued at fair value in accordance with INDAS 109. To ascertain the same the financial statements of the investee entities as at31st March 2020 were sought for the purpose of valuation. Alternative valuation report ofa valuer could establish the completeness and accuracy in the valuation of the investmentsin above equity shares.

As the financial statements of the investee entities were not made available noralternative valuation for the correctness of the investment value at which these arestated our opinion is qualified in this respect.

Description of Key Audit Matter

B. Current Investments

The Company has made current investments in debt oriented mutual funds which have beenstated at cost in the financial statements. The key audit matter in the above investmentswas value at which these are recognised in the financial statements and whether the sameis as per the requirements of IND AS 109. (Refer note 3.1).

How the matter was addressed in the audit The audit procedures included:

- Identification:

For the purpose of identification We have sought the depository statement / statementof mutual funds for the investments made in each of the mutual funds and the transactionsstatement for purchase and sell of the investments stated at aggregate value of1757664/- in the financial statements. This evidence was required for identification ofinvestments made/disposed off during the year.

- Controls:

The ownership control of the investments could be ascertained if the invested mutualfunds were in the custody of the management. The production of the investments by way ofdepository statements (holding and transactions both) could establish the control of themanagement on the above investments.

- Completeness and accuracy of the value at which stated:

The mutual fund investments are required to be valued at fair value in accordance withIND AS 109. To ascertain the same the no. of units at the year end and the net assetvalue for each of the mutual funds were sought.

The relevant information in respect of the investments made/disposed off and thevaluation as at 31st March 2020 was made available and the same was found to be correct toour satisfaction.

C. Other Current Assets

The company has given mobilization advance of Rs.57650000/- for taking certainproject which had been outstanding for a long time and the audit matter was whether thesame is recoverable considering no progress on the project and the prevailing marketconditions.(Refer note 5.2)

How the matter was addressed in the audit The audit procedures included:

We made the enquiries from the management with regard to the probability of commencingthe project or recovery of the amount from the party.

The management informed that there is every possibility of recovery and negotiation ison however a possibility of loss in the credit cannot be ruled out and considering thepossibility of this 50% provision has already been made for doubtful advances.

D. Going Concern assumption

The Company operates only in one segment i.e. Hotels and substantial assets of the samewas disposed off to settle one time settlement dues of banker who had attached theproperties and took possession of the same. Thus the company is not carrying the hotelbusiness and till it explores other business avenues the assumption of going concern wasan issue of concern. (Refer note 20)

How the matter was addressed in the audit

The audit procedures included:

We made the enquiries from the management with regard to the going concern assumptionand the reasons for preparation of financial statements despite being no hotel propertiesto carry on the hotel business.

The management informed that the company now intends to go for diversified alliedbusiness apart from the hospitality activities and a mobilization advance is also given inthis respect.

Other Information

The Company's management and Board of Directors are responsible for the otherinformation. The other information comprises the information included in the Company'sannual report but does not include the financial statements and our 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 in theaudit or otherwise appears to be materially misstated. If based on the work we haveperformed we conclude that there is no material misstatement of other information whichwe are required to report and we have nothing to report in this regard.

Management's Responsibility for the Standalone Financial Statements

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 state of affairs profit/loss and othercomprehensive 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) specified under section 133 of the Act. The Board of Directors of theCompany is responsible for maintenance of adequate accounting records in accordance withthe provisions of the Act for safeguarding of the assets of the Company and for preventingand detecting frauds and other irregularities; the selection and application ofappropriate accounting policies; making judgments and estimates that are reasonable andprudent; and the design implementation and maintenance of adequate internal financialcontrols that were operating effectively for ensuring the accuracy and completeness of theaccounting records relevant to the preparation and presentation of the financialstatements that give a true and fair view and are free from material misstatement whetherdue to fraud or error which have been used for the preparation of the financial statementsby the Directors of the Company as aforesaid.

In preparing the financial statements the management and Board of Directors of theCompany are responsible for assessing the ability of the company to continue as a goingconcern disclosing as applicable matters related to going concern and using the goingconcern basis of accounting unless management either intends to liquidate the company orto cease operations or has no realistic alternative but to do so. The Board of Directorsof the Company is responsible for overseeing the financial reporting process of thecompany.

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

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

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

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Act we are also responsible for expressing our opinion on whether the company hasadequate internal financial controls with reference to financial statements in place andthe 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 in preparation of financial statement and based on the audit evidenceobtained whether a material uncertainty exists related to events or conditions that maycast significant doubt on the appropriateness of this assumption. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditor's report tothe related disclosures in the financial statements or if such disclosures areinadequate to modify our opinion. Our conclusions are based on the audit evidenceobtained up to the date of our auditor's report. However future events or conditions maycause the Company to cease to continue as a 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.

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 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 (Auditors' Report) Order 2016 ("the Order")issued by the Central Government in terms of section 143 (11) of the Act we give in the"Annexure A" a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.

2. (A) As required by Section 143(3) ofthe Act we report that:

a) we have sought and obtained all the information and explanations (except as statedabove in the para on basis for qualified opinion) 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 relevant books of account.

d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder section 133 of the Act except for the effects of the matter described in the Basisfor Qualified Opinion section of our report.

e) On the basis of the written representations received from the directors as on 31stMarch 2020 and taken on record by the Board of Directors none of the directors of theCompany is disqualified as on 31st March 2020 from being appointed as adirector in terms

of Section 164(2) ofthe Act.

f) With respect to the adequacy of the internal financial controls with reference tofinancial statements of the Company and the operating effectiveness of such controlsrefer to our separate Report in "Annexure B".

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 noremuneration is paid by the Company to its directors during the year to be reported is inaccordance with the provisions of section 197 ofthe Act.

(B) With respect to the other matters to be included in the Auditors' Report inaccordance with Rule 11 ofthe 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 litigations as at 31st March 2020having impact on the financial position in its financial statement.

ii. The company does not have any long-term contracts including derivative contractsfor which there there are any material foreseeable losses.

iii. There has been no amount due to be transferred to the Investor Education andProtection Fund by the Company.

As per our report of even date.

For B M Gattani & Co.

Chartered Accountants

Balmukund N Gattani (Proprietor)

Membership No. 47066 Place : Mumbai Dated : 29.07.2020

ANNEXURE "A" OF THE INDEPENDENT AUDITOR'S REPORT

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

The Annexure referred to in Independent Auditors' Report to the members of the Companyon the Ind AS financial statements for the year ended 31st March 2020 Wereport that:

1. The Company does not have any fixed assets. Therefore clause 3 (i)(a) 3(i)(b) and3(i)(c) of the Order are not applicable to the company.

2. The Company is not dealing in any goods and therefore there is no inventory held bythe company. Therefore Clause 3 (ii)(a) and 3(ii)(b) of the Order are not applicable tothe company.

3. The Company has not granted any loans secured or unsecured to companies firms LLPor other parties covered in the registered maintained under Section 189 ofthe CompaniesAct 2013. Accordingly Clause 3 (iii)(a) 3(iii)(b) and 3(iii) (c) ofthe Order are notapplicable to the company.

4. In our opinion and according to information and explanations given to me theCompany has complied with provisions of Section 185 and 186 ofthe Act in respect of grantof loans investments guarantees and securities as applicable.

5. The company has not accepted any deposits covered under the directives issued by theReserve Bank of India and the provisions of sections 73 to 76 or any other relevantprovisions of the Act and the rules framed thereunder. No order has been passed by CompanyLaw Board or National Company Law Tribunal or Reserve Bank of India or any court or anyother tribunal to be complied by the company.

6. As per the information and explanations given to us the Central Government has notspecified maintenance of cost records under sec 148 (1) of Companies Act 2013 for thecompany. Accordingly Clause 3(vi) of the Order is not applicable to the company.

7. In our opinion and according to the information and explanations given to us:

(a) the company is generally regular in depositing undisputed statutory dues with theappropriate authorities including income tax and there are no arrears of outstandingstatutory dues as at the last day of the financial year concerned for a period of morethan six months from the date they become payable. The Company is not liable for Providentfund Employees State Insurance fund value added tax goods and service tax cess or anyother statutory dues.

(b) the dues of income tax or sales tax or service tax or duty of customs or duty ofexcise or value added tax which have not been deposited on account of any dispute are asunder:

Name of Statute Nature of the dues *Amount (In Rs.) Period to which amount relates Forum where the Dispute is pending
Finance Act 1994 Interest on Service tax 707394 October 2004 to July 2006 Commissioner (Appeals) Mumbai
Penalty on Service tax 1641776

*Rs. 234917 has been deposited against the above disputed liabilities

8. In our opinion and according to the information and explanations given to us thecompany has not taken any loans from any financial institution banks government orissued any debentures. Therefore Clause 3 (viii) of the Order is not applicable to thecompany.

9. In our opinion and according to the information and explanations given to us thecompany has neither raised any money by way of initial public offer or further publicoffer nor taken any term loans. Therefore Clause 3 (ix) of the Order is not applicable tothe company.

10. As per the information and explanations given to us no fraud by the company or onthe company by its officers and employees has been noticed or reported during the year.

11. As per the information and explanations given to us no managerial remuneration hasbeen paid by the company during the year. Therefore Clause 3 (xi) ofthe Order is notapplicable to the company.

12. In our opinion and according to the information and explanations given to us thecompany is not a Nidhi Company and therefore Clause 3 (xii) ofthe Order is not applicableto the company.

13. As per the information and explanations given to us all transaction with therelated party is in compliance with Section 177 and 188 of the Companies Act 2013 whereapplicable and the details have been disclosed in the financial statements as required bythe applicable accounting standard.

14. In our opinion and according to the information and explanations given to us thecompany has not made any preferential allotment or private placement of shares or fully orpartly convertible debentures during the year under review. Therefore Clause 3 (xiv)ofthe Order is not applicable to the company.

15. In our opinion and according to the information and explanations given to us thecompany has not entered into any non-cash transaction with a director or any personconcerned with him. Therefore Clause 3 (xv) of the order is not applicable to thecompany.

16. In our opinion and according to the information and explanations given to us thecompany's financial assets are not more than 50 per cent of its total assets (netted offby intangible assets if any) though the income from financial assets is more than 50 percent of the gross income. Since the company does not fulfill both the conditions thecompany is not required to be registered under Section 45 IA of Reserve Bank of India Act1934.

As per our report of even date.

For B M Gattani & Co.

Chartered Accountants

Balmukund N Gattani (Proprietor)

Membership No. 47066 Place : Mumbai Dated: 29/07/2020

ANNEXURE "B" OF THE INDEPENDENT AUDITOR'S REPORT

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

We have audited the internal financial controls with reference to financial statementsof Hotel Rugby Limited ("the Company") as at 31st March 2020 in conjunction withour audit of the financial statements of the Company for the year ended on that date.

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 financial controls with reference tofinancial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note. These responsibilities includethe design implementation and maintenance of adequate internal financial controls thatwere operating effectively for ensuring the orderly and efficient conduct of its businessincluding adherence to the company's policies the safeguarding of its assets theprevention and detection of frauds and errors the accuracy and completeness of theaccounting records and the timely preparation of reliable financial information asrequired 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 the financial statements based on our audit. We conducted myaudit in accordance with the Guidance Note and the Standards on Auditing prescribed undersection 143(10) of the Act to the extent applicable to an audit of internal financialcontrols with reference to the financial statements. Those Standards and the Guidance Noterequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether adequate internal financial controls with reference tothe financial 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 the financial statements and theiroperating effectiveness. Our audit of internal financial controls with reference tofinancial statements included obtaining an understanding of internal financial controlsassessing the risk that a material weakness exists and testing and evaluating the designand operating effectiveness of the internal controls based on the assessed risk. Theprocedures selected depend on the auditor's judgment including the assessment of therisks of material 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 internal financial controls with reference tothe financial statements.

Meaning of Internal Financial controls with Reference to Financial Statements

A company's internal financial controls 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 controlswith reference to financial statements includes those policies and procedures that (1)pertain to the maintenance of records that in reasonable detail accurately and fairlyreflect the transactions and dispositions of the assets of the company; (2) providereasonable assurance that transactions are recorded as necessary to permit preparation offinancial statements in accordance with generally accepted accounting principles and thatreceipts and expenditures of the company are being made only in accordance withauthorizations of management and directors of the company; and (3) provide reasonableassurance regarding prevention or timely detection of unauthorized acquisition use ordisposition of the company's assets that could have a material effect on the financialstatements.

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 controls with reference to financial statements may become inadequatebecause of changes in conditions or that the degree of compliance with the policies orprocedures may deteriorate.

Opinion

In our opinion the Company has in all material respects adequate internal financialcontrols with reference to financial statements and such internal financial controls wereoperating effectively as at 31stMarch 2020 based on the internal financialcontrols with reference to financial statements criteria established by the Companyconsidering the essential components of internal control stated in the Guidance Note onAudit of Internal Financial Controls Over Financial Report issued by the Institute ofChartered Accountants of India.

As per our report of even date.

For B M Gattani & Co.

Chartered Accountants

Balmukund N Gattani (Proprietor)

Membership No. 47066

Place : Mumbai

Dated: 29/07/2020

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