You are here » Home » Companies » Company Overview » Indian Hotels Co Ltd

Indian Hotels Co Ltd.

BSE: 500850 Sector: Services
NSE: INDHOTEL ISIN Code: INE053A01029
BSE 00:00 | 20 Jul 127.05 -1.95
(-1.51%)
OPEN

127.15

HIGH

128.80

LOW

125.00

NSE 00:00 | 20 Jul 128.00 -1.15
(-0.89%)
OPEN

129.95

HIGH

129.95

LOW

125.15

OPEN 127.15
PREVIOUS CLOSE 129.00
VOLUME 574547
52-Week high 160.60
52-Week low 101.41
P/E 85.27
Mkt Cap.(Rs cr) 15,110
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 127.15
CLOSE 129.00
VOLUME 574547
52-Week high 160.60
52-Week low 101.41
P/E 85.27
Mkt Cap.(Rs cr) 15,110
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Indian Hotels Co Ltd. (INDHOTEL) - Auditors Report

Company auditors report

To

The Members of

The Indian Hotels Company Limited

Report on the Audit of the Standalone Ind AS Financial Statements

We have audited the accompanying standalone Ind AS financial statements of The IndianHotels Company Limited ("the Company") which comprise the Balance sheet as atMarch 31 2018 the Statement of profit and loss (including Other Comprehensive Income)the Statement of changes in equity and the Statement of cash flows for the year thenended and a summary of the Significant accounting policies and Other explanatoryinformation (hereinafter referred to as "standalone Ind ASfinancialstatements").

Management's Responsibility for the Standalone Ind AS 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 preparation ofthese standalone Ind AS financial statements that give a true and fair view of the stateof affairs profit (including Other Comprehensive Income) changes in equity and cashflows of the Company in accordance with the accounting principles generally accepted inIndia including the Indian Accounting Standards (Ind AS) prescribed under section 133 ofthe Act.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements and estimates that are reasonable andprudent; and 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 standalone Ind ASfinancial statements that give a true and fair view and are free from materialmisstatement whether due to fraud or error.

Auditors' Responsibility

Our responsibility is to express an opinion on these standalone Ind AS financialstatements based on our audit.

We have taken into account the provisions of the Act the accounting and auditingstandards and matters which are required to be included in the audit report under theprovisions of the Act and the Rules made thereunder.

We conducted our audit of the standalone Ind AS financial statements in accordance withthe Standards on Auditing specified under section 143(10) of the Act. Those Standardsrequire that we comply with ethical requirements and plan and perform the audit to obtainreasonable assurance about whether the standalone Ind AS financial statements are freefrom material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts andthe disclosures in the standalone Ind AS financial statements. The procedures selecteddepend on the auditors' judgement including the assessment of the risks of materialmisstatement of the standalone Ind AS financial statements whether due to fraud or error.In making those risk assessments the auditor considers internal financial controlrelevant to the Company's preparation of the standalone Ind AS financial statements thatgive a true and fair view in order to design audit procedures that are appropriate in thecircumstances. An audit also includes evaluating the appropriateness of the accountingpolicies used and the reasonableness of the accounting estimates made by the Company'sDirectors as well as evaluating the overall presentation of the standalone Ind ASfinancial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the standalone Ind AS financial statements.

Opinion

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid standalone Ind AS financial statements give the informationrequired by the Act in the manner so required and give a true and fair view in conformitywith the accounting principles generally accepted in India of the state of affairs of theCompany as at March 31 2018 its profit (including Other Comprehensive Income) changesin equity and its cash flows for the year ended on that date.

Other Matters

The audited Ind AS financial statements of the Company for the corresponding year endedMarch 31 2017 included in these standalone Ind AS financial statements have been auditedby the predecessor auditors whose audit report dated May 26 2017 expressed an unmodifiedopinion on those audited standalone Ind AS financial statements. Our opinion is notmodified in respect of this matter.

The figures for the year ended March 31 2017 included in the standalone financialstatements for the year ended March 31 2018 have been restated to give effects to thescheme of amalgamation of TIFCO Holdings Limited (a wholly owned subsidiary) with theCompany pursuant to an order of National Company Law Tribunal dated March 8 2018 fromthe beginning of the preceding year (i.e April 1 2016) in accordance with the Ind AS. Ouropinion is not modified in respect of the above matter.

Report on Other Legal and Regulatory Requirements

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

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 standalone Balance sheet the standalone Statement of Profit and Loss(including other comprehensive income) the standalone Statement of cash flows and thestandalone Statement of changes in equity dealt with by this report are in agreement withthe books of account;

(d) in our opinion the aforesaid standalone Ind AS financial statements comply withthe Indian Accounting Standards (Ind AS) prescribed under section 133 of the Act;

(e) on the basis of the written representations received from the directors as on March312018 taken on record by the board ofdirectors none of the directors isdisqualifiedasonMarch 31 2018 from being appointed as a director in terms of section 164(2) of the Act;

(f) with respect to the adequacy of the internal financial controls with reference tothe Ind AS financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B"; and

(g) 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 standalone Ind ASfinancial statements- Refer Note 29 and Note 36 to thestandalone Ind AS 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 includingderivative contracts;

iii. there has been no delay in transferring amounts required to be transferred tothe Investor Education and Protection Fund by the Company during the year ended March 312018; and

iv. the disclosure in the standalone Ind AS financial statements regarding holdings aswell as dealings in Specified Bank Notes during the period from November 82016 toDecember 30 2016 have not been made since they do not pertain to the financial year endedMarch 31 2018.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Vijay Bhatt
Partner
Mumbai May 25 2018 Membership No: 036647

Annexure 'A' to the Independent Auditor's Report

With reference to the Annexure A referred to in the Independent Auditors' Report to themembers of the Company on the standalone Ind AS financial statements for the year endedMarch 31 2018 we report the following:

(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 the fixed assets are verified in a phased manner over a period of three years.In accordance with this program a portion of the fixed assets has been physicallyverified by the management during the year and no material discrepancies have been noticedon such verification. In our opinion this periodicity of physical verification isreasonable having regard to the size of the Company and the nature of its assets.

(c) According to the information and explanations given to us and on the basis of ourexamination of the records of the Company the title deeds comprising all the immovableproperties of land and buildings are held in the name of the Company as at the BalanceSheet date except in respect of:

• one plot of leasehold land aggregating Rs.1.91 crore (Gross Block Rs.1.91crores) which is in physical possession of the Company and the settlement of the leasedeed in favour of the Company is being processed.

• one hotel building aggregating Rs.16.54 crores (Gross Block Rs.18.53 crores)which is built on land taken on lease and disclosed as a part of the fixed assets in thefinancial statements. The lease agreement has expired but the Company is permitted tocarry out its operations until the process of auction by the owners of the said land iscompleted and the premises is handed over to the winning bidder.

• one commercial/residential building aggregating to Rs.0.81 crores (Gross BlockRs.1.30 crores) constructed on the leased land which is in the possession of the Companyacquired pursuant to a scheme of amalgamation ofTlFCO Holding Limited (a wholly ownedsubsidiary). The lease of the said land has expired in the year 2000. TIFCO HoldingsLimited has filed a writ Petition in High Court of Mumbai on January 15 2013 for renewalof lease.

(ii) The inventory has been physically verified by the management during the year. Inour opinion the frequency of such verification is reasonable. The discrepancies noticedon verification between the physical stocks and the book records were not material andhave been properly dealt with in books of account.

(iii) According to the information and explanations given to us the Company has notgranted any loans secured or unsecured to companies firms limited liabilitypartnerships or other parties covered in the register maintained under section 189 of theCompanies Act 2013 ('the Act'). Accordingly paragraphs 3 (iii)(a) (b) and (c) of theOrder are not applicable to the Company.

(iv) In our opinion and according to the information and explanation given to us theCompany has not granted any loans or provided any guarantees or security to the partiescovered under section 185 of the Act. The Company has complied with the provisions ofsection 186 of the Act in respect of the investments and guarantees made. The Company hasnot provided any security to the parties covered under section 186 of the Act.

(v) In our opinion and according to the information and explanations given to us theCompany has not accepted deposits as per the directives issued by the Reserve Bank ofIndia and the provisions of sections 73 to 76 or any other relevant provisions of the Actand the rules framed thereunder. Accordingly paragraph 3(v) of the Order is notapplicable to the Company.

(vi) The Central Government has not prescribed maintenance of cost records undersection 148(1) of the Act. Accordingly paragraph 3(vi) of the Order is not applicable tothe Company.

(vii) (a) According to the information and explanations given to us and on the basis ofour examination of the records of the Company amounts deducted/accrued in the books ofaccount in respect of undisputed statutory dues including Provident Fund Employees StateInsurance Income-tax Duty of Customs Duty of Excise Sales-tax Service Tax ValueAdded Tax Goods and Services Tax Cess and other material statutory dues have beengenerally and regularly deposited during the year with the appropriate authorities.

According to the information and explanations given to us no undisputed amountspayable in respect of Provident Fund Employees State Insurance Profession TaxIncome-tax Duty of Customs Duty of Excise Sales-tax Service Tax Goods and ServicesTax Value Added Tax Cess and other material statutory dues were in arrears as at March31 2018 for a period of more than six months from the date they became payable.

(b) According to the information and explanations given to us there are no dues ofIncome-tax Sales-tax Service Tax Duty of Customs Duty of Excise Goods and ServicesTax and Value Added Tax as at March 31 2018 which have not been deposited with theappropriate authorities on account of any dispute except as stated below:

(Rs. in crores)

Name of Act Nature of Dues Amount Demanded Amount not Deposited/Under Disputes Period to which amount relates (Financial Year) Forum where dispute is pending
Sales Tax and Value Added Tax Tax Penalty and Interest 6.06 4.76 1997 -1998 to 2004 - 2005 Joint Commissioner (Appeals)
10.10 9.30 2005 - 2009 & 2010 - 2011
0.18 0.18 2006 - 2008 Additional Commissioner
0.66 - 2010 - 2011 to 2015 - 2016
0.34 0.34 1992 -1993 to 1995 - 1996 Commissioner (Appeals)
1.91 1.91 2005 - 2006 to 2012 - 2013
0.02 0.02 2005 - 2006 Assistant/Deputy Commissioner
2.98 2.54 2011 - 2012 to 2017-2018
The Income Tax Act 1961 Tax and Interest 125.51 102.93 2012-2013 Commissioner (Appeals)
2.25 2.25 2009 - 2010 to 2013 - 2014 Assessing Officer
51.00 34.24 2009 - 2010 & 2011-2012 Tribunal
The Finance Act 1994 Tax Penalty and Interest 0.16 0.16 2002 - 2003 Commissioner (Appeals)
3.95 3.72 2006 - 2007 to 2016 - 2017
0.12 0.11 2012 - 2013 Additional Commissioner
0.88 0.87 2006 - 2007 to 2016 - 2017 Joint Commissioner (Appeals)
8.16 2.76 2006 - 2007 to 2012-2013 Tribunal
Property Tax Demand Penalty and Interest 0.10 - 1990-1991 High Court
315.42 244.92 2009 - 2010 to 2017-2018
0.30 0.30 2009 - 2010 Supreme Court

(viii) In our opinion and according to the information and explanations given to usthe Company has not defaulted in repayment of loans to banks and dues to debentureholders. The Company did not have any outstanding dues to financial institutions andgovernment during the year.

(ix) In our opinion and according to the information and explanations given to us andbased on our examination of the records of the Company the Company has utilised the moneyraised by way of rights issue of equity shares during the year except for unutilisedamount of' 51.81 crores which has been kept in fixed deposit. Moreover the term loanstaken by the Company have been applied by the Company during the year for the purposes forwhich they were raised. The Company has not raised money by way of initial public offer(including debt instruments) during the year.

(x) According to the information and explanations given to us no material fraud by theCompany or on the Company by its officers or employees has been noticed or reported duringthe course of our audit.

(xi) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has paid/provided for managerialremuneration in accordance with the requisite approvals mandated by the provisions ofsection 197 read with Schedule V to the Act.

(xii) In our opinion and according to the information and explanations given to us theCompany is not a Nidhi company and the Nidhi Rules 2014 are not applicable to it.Accordingly paragraph 3(xii) of the Order is not applicable to the Company.

(xiii) According to the information and explanations given to us and based on ourexamination of the records of the Company transactions with the related parties are incompliance with sections 177 and 188 of the Act. The details of such related partytransactions have been disclosed in the financial statements as required under IndianAccounting Standard (IndAS) 24.

(xiv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not made any preferentialallotment or private placement of shares or fully or partly convertible debentures duringthe year. Accordingly paragraph 3 (xiv) of the Order is not applicable to the Company.

(xv) According to the information and explanations given to us and based on ourexamination of the records of the Company the Company has not entered into any noncashtransactions with directors or persons connected with them. Accordingly paragraph 3(xv)of the Order is not applicable to the Company.

(xvi) In our opinion and according to the information and explanations given to us theCompany is not required to be registered under section 45-IA of the Reserve Bank of IndiaAct 1934. Accordingly paragraph 3(xvi) of the Order is not applicable to the Company.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Vijay Bhatt
Partner
Mumbai May 25 2018 Membership No: 036647

Annexure 'B' to the Independent Auditor's Report

(Referred to in our report of even date)

Report on the Internal Financial Controls under Clause (i) of subsection 3 of section143 of the Act

We have audited the internal financial controls over financial reporting of The IndianHotels Company Limited ("the Company") as of March 31 2018 in conjunction withour audit of the standalone Ind AS financial statements of the Company for the year endedon 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 FinancialReporting" issued by the Institute of Chartered Accountants of India ('the ICAI').These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to company's 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 Act.

Auditors' Responsibility

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 FinancialReporting" (the "Guidance Note") and the Standards on Auditing issued bythe ICAI and deemed to be prescribed under section 143(10) of the Act to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the ICAI. Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting was 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 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 auditors' judgement including the assessment of the risks ofmaterial misstatement of the standalone Ind AS financial statements whether due to fraudor 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 systemoverfinancial 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 the Company has in all material respects an adequate internalfinancial controls system over financial reporting and such internal financial controlsover financial reporting were operating effectively as at March 31 2018 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 bythe ICAI.

For B S R & Co. LLP
Chartered Accountants
Firm's Registration No: 101248W/W-100022
Vijay Bhatt
Partner
Mumbai May 25 2018 Membership No: 036647