Mac Hotels Ltd.
|BSE: 541973||Sector: Services|
|NSE: N.A.||ISIN Code: INE004Z01011|
|BSE 00:00 | 12 Apr||Mac Hotels Ltd|
|NSE 05:30 | 01 Jan||Mac Hotels Ltd|
|BSE: 541973||Sector: Services|
|NSE: N.A.||ISIN Code: INE004Z01011|
|BSE 00:00 | 12 Apr||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 at31st March2021 and the statement of Profit and Loss including statement of changes in equityand statement of cash flows for the year then ended and notes to the Standalone FinancialStatements including a summary of significant accounting policies and other explanatoryinformation. In our opinion and to the best of our information and according to theexplanations given to us the aforesaid Standalone Financial Statements give theinformation required by the Act in the manner so required and give a true and fair view inconformity with the accounting principles generally accepted in India of the state ofaffairs of the Company as at 31stMarch 2021 and its profit (changes in equity) and itscash flows for 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 Companyin accordance with the Code of Ethics issued by The Institute of Chartered Accountants ofIndia (ICAI) together with the ethical requirements that are relevant to our audit of theStandalone Financial Statements under the provisions of the Companies Act 2013 and theRules thereunder and we have fulfilled our other ethical responsibilities in accordancewith these 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
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 opinionon the Standalone Financial Statements does not cover the other information and we do notexpress 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 ismaterial misstatement therein we are required to communicate the matter to those chargedwith governance. We have 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. Inpreparing the Standalone Financial Statements the management is responsible for assessingthe Company's 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 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 assurance is a high level of assurance but is not a guarantee that an auditconducted in accordance with SAs will always detect a material misstatement when itexists. Misstatements can arise from fraud or error and are considered material ifindividually or in the aggregate they could reasonably be expected to influence theeconomic decisions of users taken 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
Financial Statements whether due to fraud or error design and perform auditprocedures responsive to those risks and obtain audit evidence that is sufficient andappropriate to provide a basis for our opinion. The risk of not detecting a materialmisstatement resulting from fraud is higher than for one resulting from error as fraudmay involve collusion forgery intentional omissions misrepresentations or the overrideof 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 usedand the reasonableness of accounting 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 our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the Company to cease to continue asa going concern.
Evaluate the overall presentation structure and content of the Standalone
Financial Statements including the disclosures and whether the Standalone FinancialStatements represent the underlying transactions and events in a manner that achieves fairpresentation. Materiality is the magnitude of misstatements in the standalone financialstatements that individually or in aggregate makes it probable that the economicdecisions of a reasonably knowledgeably user of a financial statements may be influenced.We consider quantitative materiality and qualitative factors in (i) planning the scope ofour audit work and in evaluating the results of our work; and (ii) to evaluate the effectof any identified misstatements in the financial statements. We communicate with thosecharged with governance regarding among other matters the planned scope and timing ofthe audit and significant audit findings including any significant deficiencies ininternal control that we identify during our audit. We also provide those charged withgovernance with a statement that we have complied with relevant ethical requirementsregarding independence and to communicate with them all relationships and other mattersthat may reasonably be thought to bear on our independence and where applicable relatedsafeguards. From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the standalone financialstatements of the current period and are therefore the key audit matters. We describethese matters in our auditor's report unless law or regulation precludes public disclosureabout the matter or when in extremely rare circumstances we determine that a mattershould not be communicated in our report because the adverse consequences of doing sowould reasonably be expected to outweigh the public interest benefits of suchcommunication.
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 2013we give in the Annexure I a statement on the matters specified in paragraphs 3 and 4 ofthe Order to the extent applicable. 3.Further to our comments in Annexure I as required bySection 143(3) of the Act we report that: (a)We have sought and obtained all theinformation and explanations which to the best of our knowledge and belief were necessaryfor the purposes of our audit. (b)In our opinion proper books of account as required bylaw have been kept by the Company so far as it appears from our examination of thosebooks. (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 FinancialStatements comply with the Accounting Standards specified under Section 133 of the Actread with Rule 7 of the Companies (Accounts) Rules 2014 and as amended.
(e)On the basis of the written representations received from the directors as on31stMarch2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31stMarch 2021 from being appointed as a director in terms of Section164 (2) of the Act. (f)With respect to the adequacy of the internal financial controlsover financial reporting of the Company and the operating effectiveness of such controlsrefer our separate report in Annexure II. Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the
Company's internal financial controls over financial reporting.
(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.TheCompany does not have any pending litigations which would impact its financial position inits standalone financial statements. ii.The Company did not have any long-term contractsincluding derivative contracts for which 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 showingfull particularsincluding quantitativedetails and situation of fixed assets however thesame has NOT been updated as on 31stMarch 2021. (b)The Company has a program ofverification to cover all the items of fixed assets in a phased manner which in ouropinion is NOT reasonable having regard to the size of the Company and the natureof its assets. Pursuant to the program certain fixed assets were physically verified bythe management during the year. According to the information and explanations given to usno material discrepancies were noticed on such verification. (c)According to theinformation and explanations given to us the records examined by us and based on theexamination of the conveyance deeds / registered sale deed provided to us we report thatthe title deeds comprising all the immovable properties of land and buildings which arefreehold are held in the name of the Company as at the balance sheet date. ii.Accordingto the information and explanations given to us physical verification of inventory hasbeen conducted at reasonable intervals by the management and the discrepancies noticed onphysical verification were not material and have been dealt with in 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 writtendocuments as regards advance of monies we are unable to comment whether the terms andconditions of the grant of such loans and advances are prejudicial or not to the Company'sinterest.
(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 weare unable to comment if there is any overdue amount remaining outstanding as attheyear-end. iv.In our opinion and according to the information and explanations given tous the Company has NOT complied with the provisions of Sections 185 and 186 of theAct in respect of grant of loans making investments and providing guarantees andsecurities as applicable.
Company has advanced an amount of Rs. 5043190.25/- 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 andexplanations given to us the Company has not accepted deposits from public covered underthe provisions of section 73 to section 76 of the Companies Act 2013. vi.The maintenanceof cost records has not been specified by the Central Government under section148(1) ofthe Companies Act 2013 for the business activities carried out by the Company. Thusreporting under clause 3(vi) of the order is not applicable to the Company. vii.Accordingto the information and explanations given to us in respect of statutory dues: (a)TheCompany has NOT deposited Goods and Service Tax for the entire reporting period. (b)TheCompany has generally NOT been regular in depositing otherundisputed statutory duesincluding Provident Fund Employees' State Insurance Income Tax Customs Duty Cess andother material statutory dues applicable to it with the appropriate authorities. (c)Therewere undisputed amounts payable in respect of Provident Fund
Employees' State Insurance Income Tax Goods and Service Tax Customs Duty Cess andother material statutory dues in arrears as at 31stMarch 2021 for a period of more thansix months from the date they became payable. (d)According to the information andexplanations given to us there were no disputes with any Government Department as regardspayment of any of the Statutory Duties. viii.The Company has taken loans or borrowingsduring the year from financial institutions banks and government.According to theinformation and explanations given to us the Company has not defaulted in repayment ofloans or borrowing to a financial institution bank Government. It has not issued anydebentures. ix.The Company has not raised moneys by way of initial public offer or furtherpublic offer (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 Rs60 lakhs during the reporting period the provisions of section 197 read with Schedule Vto the Companies Act 2013 have been complied with. xii.The Company is not a Nidhi Companyand hence reporting under clause 3 (xii) of the Order 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 andbased on our examination of the records of the Company the Company has not made anypreferential allotment or private placement of shares or fully or partly convertibledebentures during the year xv.In our opinion and according to the information andexplanations given to us during the year the Company has not entered into any non-cashtransactions with its Directors or persons connected to its directors and hence provisionsof section 192 of the Companies Act 2013 are not applicable to the Company. xvi.In ouropinion and according to the information and explanations given to us the company is notrequired to be registered under section 45-IA of the Reserve Bank of India Act 1934.Accordingly paragraph 3(xvi) of the Order is not applicable to the Company
Annexure II to the Auditor's Report 31stMarch 2021
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of
Section 143 of the Companies Act 2013 ("the Act")
We have audited the internal financial controls over financial reporting of MAC
HOTELS LIMITED ("the Company") as of 31stMarch 2021 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 Auditingissued by
ICAI and deemed to be prescribed under section 143(10) of the Companies Act 2013 tothe extent applicable to an audit of internal financial controls both applicable to anaudit of Internal Financial Controls and both issued by the Institute of CharteredAccountants of India. Those Standards and the Guidance Note require that we comply withethical requirements and plan and perform the audit to obtain reasonable assurance aboutwhether adequate internal financial controls over financial reporting was established andmaintained and if such controls operated effectively in all material respects. Our auditinvolves performing procedures to obtain audit evidence about the adequacy of the internalfinancial controls system over financial reporting and their operating effectiveness. Ouraudit of internal financial controls over financial reporting included obtaining anunderstanding of internal financial controls over financial reporting assessing the riskthat a material weakness exists and testing and evaluating the design and operatingeffectiveness of internal control based on the assessed risk. The procedures selecteddepend on the auditor's judgment including the assessment of the risks of materialmisstatement of the Standalone Financial Statements whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate toprovide a basis for our audit opinion on the Company's internal financial controls systemover financial reporting.
Meaning of Internal Financial Controls over Financial Reporting
A company's internal financial control over financial reporting is a process designedto provide reasonable assurance regarding the reliability of financial reporting and thepreparation of financial statements for external purposes in accordance with generallyaccepted accounting principles. A company's internal financial control over financialreporting includes those policies and procedures that (1) pertain to the maintenance ofrecords that in reasonable detail accurately and fairly reflect the transactions anddispositions of the assets of the company; (2) provide reasonable assurance thattransactions are recorded as necessary to permit preparation of financial statements inaccordance with generally accepted accounting principles and that receipts andexpenditures of the company are being made only in accordance with 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 at31stMarch 2021: a) The Companydid not have an appropriate internal financial control system over financialreportingsince the internal controls adopted by the Company did not adequately considerriskassessment which is one of the essential components of internal control with regardtothe potential for fraud when performing risk assessment b) The Company did not provideInternal Auditor's report for the reporting period to us
A material weakness' is a deficiency or a combination of deficiencies ininternal financialcontrol over financial reporting such that there is a reasonablepossibility that a materialmisstatement of the company's annual financial statements willnot be prevented ordetected 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 asof31stMarch 2021 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 We have considered the materialweaknesses identified and reported above in determiningthe nature timing and extent ofaudit tests applied in our audit of the 31stMarch 2021standalone financial statements ofthe Company and these material weaknesses does notaffect our opinion on the standalonefinancial statements of the Company.