Mac Hotels Ltd.
|BSE: 541973||Sector: Services|
|NSE: N.A.||ISIN Code: INE004Z01011|
|BSE 00:00 | 13 Oct||Mac Hotels Ltd|
|NSE 05:30 | 01 Jan||Mac Hotels Ltd|
|BSE: 541973||Sector: Services|
|NSE: N.A.||ISIN Code: INE004Z01011|
|BSE 00:00 | 13 Oct||Mac Hotels Ltd|
|NSE 05:30 | 01 Jan||Mac Hotels Ltd|
To the Members of MAC HOTELS LIMITED
Report on the Audit of the Standalone Financial Statements
We have audited the accompanying Standalone Financial Statements of MAC HOTELSLIMITED ("the Company") which comprise the balance sheet as at 31stMarch 2020 and the statement of Profit and Loss including statement of changes inequity and statement of cash flows for the year then ended and notes to the StandaloneFinancial Statements including a summary of significant accounting policies and otherexplanatory 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 Act in the manner so required and give a true and fair view in conformity with theaccounting principles generally accepted in India of the state of affairs of the Companyas at 31stMarch 2020 and its profit (changes in equity) and its cash flowsfor the year ended on that date.
Basis for Opinion
We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder Section 143(10) of the Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theStandalone Financial
Statements section of our report. We are independent of the Company in accordance withthe Code of Ethics issued by The Institute of Chartered Accountants of India (ICAI)together with the ethical requirements that are relevant to our audit of the StandaloneFinancial Statements under the provisions of the Companies Act 2013 and the Rulesthereunder and we have fulfilled our other ethical responsibilities in accordance withthese requirements and the Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide 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.
Information Other than the Standalone Financial Statements and Auditor's Report thereon
The Company's Board of Directors is responsible for the Other Information. The otherinformation comprises the information included in the Annual Report but does not includethe Standalone Financial Statements and our auditor's report thereon. The annual report isexpected to be made available to us after the date of this auditor's report.
Our opinion on the Standalone Financial Statements does not cover the other informationand we do not express any form of assurance conclusion thereon.
In connection with our audit of the Standalone Financial Statements our responsibilityis to read the other information identified above when it becomes available and in doingso consider whether the other information is materially inconsistent with the StandaloneFinancial Statements or our knowledge obtained in the audit or otherwise appears to bematerially misstated.
When we read the Annual Report if we conclude that there is material misstatementtherein we are required to communicate the matter to those charged with governance. Wehave nothing to report in this regard.
Responsibilities of the Management and those charged with governance for the StandaloneFinancial 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 Financial Statements that give a true and fair view of the Statement ofaffairs (financial position) Profit and loss account (financial performance) (changes inequity) and cash flows of the Company in accordance with the accounting principlesgenerally accepted in India including the accounting Standards specified under section133 of the Act. This responsibility also includes maintenance of adequate accountingrecords in accordance with the provisions of the Act for safeguarding of the assets of theCompany and for preventing and detecting frauds and other irregularities; selection andapplication of appropriate implementation and maintenance of accounting policies; makingjudgments and estimates that are reasonable and prudent; and design implementation andmaintenance of adequate internal financial controls that were operating effectively forensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the Standalone Financial Statement that give a true andfair view and are free from material misstatement whether due to fraud or error.
In preparing the Standalone Financial Statements the 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.
The Board of Directors is also responsible for overseeing the company's financialreporting process.
Auditor's Responsibilities 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 a part of an audit in accordance with SA's we exercise professional judgment andmaintain professional scepticism throughout the audit. We also:
Identify and assess the risks of material misstatement of the Standalone 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 to designaudit procedures that are appropriate in the circumstances. Under section 143(3)(i) of theCompanies Act 2013 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 management's 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 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 Standalone FinancialStatements including the disclosures and whether the Standalone Financial Statementsrepresent 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 knowledgeably user of a financial statements may be influenced. We considerquantitative materiality and qualitative factors in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements.
We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.
From the matters communicated with those charged with governance we determine thosematters that were of most significance in the audit of the 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.
Report on Other Legal and Regulatory Requirements
1.As required by section 197(16) of the Act we report that the Company has paidremuneration to its directors during the year in accordance with the provisions of andlimits laid down under section 197 read with Schedule V to the Act.
2.As required by the Companies (Auditor's Report) Order 2016 (the Order') issuedby the
Central Government of India in terms of section 143(11) of the Companies Act 2013 wegive in the Annexure I a statement on the matters specified in paragraphs 3 and 4 of theOrder to the extent applicable.
3.Further to our comments in Annexure I as required by Section 143(3) of the Act wereport 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 Lossincluding the statement ofchanges in equity and the Cash Flow Statement dealt with by this Report are in agreementwith the books of account.
(d)In our opinion the aforesaid Standalone Financial Statements comply with theAccounting Standards specified under Section 133 of the Act read with Rule 7 of theCompanies (Accounts) Rules 2014 and as amended.
(e)On the basis of the written representations received from the directors as on 31stMarch2020taken on record by the Board of Directors none of the directors is disqualified as on 31stMarch2020 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 over financialreporting of the Company and the operating effectiveness of such controls refer ourseparate report in Annexure II. Our report expresses an unmodified opinion on the adequacyand operating effectiveness of the Company's internal financial controls over financialreporting.
(g)With respect to the other matters to be included in the Auditor's Report inaccordance with Rule 11 of the Companies (Audit and Auditors) Rules 2014 in our opinionand to the best of our information and according to the explanations given to us:
i.The Company does not have any pending litigations which would impact its financialposition in its standalone financial statements.
ii.The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.
iii.No amounts are required to be transferred to the Investor Education and ProtectionFund by the Company.
ANNEXURE I' TO THE INDEPENDENT AUDITOR'S REPORT
(Referred to in paragraph 2 under Report on Other Legal and RegulatoryRequirements' section of our report to the Members of MAC HOTELS LIMITED of even date)
i.In respect of the Company's fixed assets:
(a)The Company has maintained records showing full particularsincludingquantitativedetails and situation of fixed assets however the same has NOT beenupdated as on 31st March 2020.
(b)The Company has a program of verification to cover all the items of fixed assets ina phased manner which in our opinion is NOT reasonable having regard to the sizeof the Company and the nature of its assets.
Pursuant to the program certain fixed assets were physically verified by themanagement during the year. According to the information and explanations given to us nomaterial discrepancies were noticed on such verification.
(c)According to the information and explanations given to us the records examined byus and based on the examination of the conveyance deeds / registered sale deed provided tous we report that the title deeds comprising all the immovable properties of land andbuildings which are freehold are held in the name of the Company as at the balance sheetdate.
ii.According to the information and explanations given to us physical verification ofinventory has been conducted at reasonable intervals by the management and thediscrepancies noticed on physical verification were not material and have been dealt within the books of accounts.
iii.According the information and explanations given to us the Company has grantedUnsecured loans & advances to Companies Firms Limited Liability Partnerships orother parties covered in the register maintained under section 189 of the Companies Act2013. However NO such register was maintained by the Company.
In absence of any written documents as regards advance of monies we are unable tocomment whether the terms and conditions of the grant of such loans and advances areprejudicial or not to the Company's interest.
(a)The schedule of repayment of principal and payment of interest if any has not beenstipulated hence we are unable to comment as regards the repayment of advances andinterest if any thereon.
(b)In absence of any schedule of repayment of advance granted we are unable to commentif there is any overdue amount remaining outstanding as at theyear-end. iv.In our opinionand according to the information and explanations given to us the Company has NOTcomplied with the provisions of Sections 185 and 186 of the Act in respect of grant ofloans making investments and providing guarantees and securities as applicable.
Company has advanced an amount of Rs. 27835122/- to Hotel Miramar Comfort Pvt. Ltd.which is a holding company. In respect of above advances provisions of Section 185 and186 have not been complied with.
v.In our opinion and according to the information and explanations given to us theCompany has not accepted deposits from public covered under the provisions of section 73to section 76 of the Companies Act 2013.
vi.The maintenance of cost records has not been specified by the Central Governmentunder section148(1) of the Companies Act 2013 for the business activities carried out bythe Company. Thus reporting under clause 3(vi) of the order is not applicable to theCompany.
vii.According to the information and explanations given to us in respect of statutorydues:
(a)The Company has NOT deposited Goods and Service Tax for the entire reporting period.
(b)The Company has generally NOT been regular in depositing otherundisputed statutorydues including Provident Fund Employees' State Insurance Income Tax Customs Duty Cessand other material statutory dues applicable to it with the appropriate authorities.
(c)There were undisputed amounts payable in respect of Provident Fund sEmployees'State Insurance Income Tax Goods and Service Tax Customs Duty
Cess and other material statutory dues in arrears as at 31stMarch 2020 fora period of more than six months from the date they became payable.
(d)According to the information and explanations given to us there were no disputeswith any Government Department as regards payment of any of the Statutory Duties.
viii.The Company has taken loans or borrowings during the year from financialinstitutions banks and government.According to the information and explanations given tous the Company has not defaulted in repayment of loans or borrowing to a financialinstitution bank Government. It has not issued any debentures.
ix.The Company has not raised moneys by way of initial public offer or further publicoffer (including debt instruments) or term loans and hence reporting under clause 3 (ix)of the Order is not applicable to the Company. x.To the best of our knowledge andaccording to the information and explanations given to us no fraud by the Company or nomaterial fraud on the Company by its officers or employees has been noticed or reportedduring the year.
xi.As the remuneration payable to the managerial persons is less than Rs 60 lakhsduring the reporting period the provisions of section 197 read with Schedule V to theCompanies Act 2013 have been complied with.
xii.The Company is not a Nidhi Company and hence reporting under clause 3 (xii) of theOrder is not applicable to theCompany.
xiii.The Company has had related partytransactions;howeverthe Company has NOTcomplied with the provisions of Section 177 and 188 of the Act. However adequatedisclosure has been made in the financial statements etc. as required by the applicableaccounting standard.
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
xv.In our opinion and according to the information and explanations given to us duringthe year the Company has not entered into any non-cash transactions with its Directors orpersons connected to its directors and hence provisions of section 192 of the CompaniesAct 2013 are 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
Annexure II to the Auditor's Report 31stMarch 2020
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of MAC HOTELSLIMITED ("the Company") as of 31stMarch 2020 in conjunction with ouraudit of the Standalone Financial Statements of the Company for the year ended on thatdate.
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 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 company's policies the safeguarding of its assets the preventionand detection of frauds and errors the accuracy and completeness of the accountingrecords and the timely preparation of reliable financial information as required underthe Companies Act 2013
Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting based on our audit. We conducted our audit in accordancewith the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting(the
"Guidance Note") and the Standards on Auditing issued by ICAI and deemed tobe prescribed under section 143(10) of the Companies Act 2013 to the extent applicableto an audit of internal financial controls both applicable to an audit of InternalFinancial Controls and both issued by the Institute of Chartered Accountants of India.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 judgment including the assessment of the risks ofmaterial misstatement of the Standalone Financial Statements whether due to fraud orerror.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of 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 authorizations ofmanagement and directors of the company; and (3) provide reasonable assurance regardingprevention or timely detection of unauthorized acquisition use or disposition of thecompany's assets that could have a material effect on the Standalone Financial Statements.
Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financialreporting including the possibility of collusion or improper management override ofcontrols material misstatements due to error or fraud may occur and not be detected.Also projections of any evaluation of the internal financial controls over financialreporting to future periods are subject to the risk that the internal financial controlover financial reporting may become inadequate because of changes in conditions or thatthe degree of compliance with the policies or procedures may deteriorate.
According to the information and explanations given to us and based on our audit thefollowing material weaknesses have been identified as at 31stMarch 2020:
a) The Company did not have an appropriate internal financial control system overfinancialreporting since the internal controls adopted by the Company did not adequatelyconsiderrisk assessment which is one of the essential components of internal controlwith regard tothe potential for fraud when performing risk assessment b) The Company didnot provide Internal Auditor's report for the reporting period to us A materialweakness' is a deficiency or a combination of deficiencies in internal financialcontrolover financial reporting such that there is a reasonable possibility that amaterialmisstatement of the company's annual financial statements will not be preventedordetected on a timely basis.
In our opinion because of the effects of the material weaknessesdescribed above on theachievement of the objectives of the control criteria the Company hasnot maintainedadequate and effective internal financial controls over financial reporting as of31stMarch2020 based on the internal control over financial reporting criteria established by theCompany considering the essential components of internal control stated in the GuidanceNote on Audit of Internal Financial Controls Over Financial Reporting issued by theInstitute of Chartered Accountants of India
We have considered the material weaknesses identified and reported above indeterminingthe nature timing and extent of audit tests applied in our audit of the 31stMarch2020 standalone financial statements of the Company and these material weaknesses doesnotaffect our opinion on the standalone financial statements of the Company.