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Oriental Hotels Ltd.

BSE: 500314 Sector: Services
NSE: ORIENTHOT ISIN Code: INE750A01020
BSE 00:00 | 19 Jan 59.10 3.15
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NSE 00:00 | 19 Jan 59.10 3.50
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OPEN 56.50
PREVIOUS CLOSE 55.95
VOLUME 271020
52-Week high 65.90
52-Week low 21.10
P/E
Mkt Cap.(Rs cr) 1,056
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 56.50
CLOSE 55.95
VOLUME 271020
52-Week high 65.90
52-Week low 21.10
P/E
Mkt Cap.(Rs cr) 1,056
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

Oriental Hotels Ltd. (ORIENTHOT) - Auditors Report

Company auditors report

To the Members of Oriental Hotels Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Oriental Hotels Limited("the Company") which comprise the standalone Balance Sheet as at 31 March2021 and the Standalone Statement of Profit and Loss (including other comprehensiveincome) Standalone Statement of Changes in Equity and Standalone Statement of Cash Flowsfor the year then ended and notes to the standalone financial statements including asummary of significant accounting policies and other explanatory information (hereinafterreferred to as "Standalone Financial Statements").

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 Companies Act 2013 ('the Act') in the manner so required and give a true and fairview in conformity with the accounting principles generally accepted in India of thestate of affairs of the Company as at 31 March 2021 and loss and other comprehensiveincome changes in equity and its cash 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 Act. Our responsibilities under those SAs are furtherdescribed in the Auditor's Responsibilities for the Audit of the Standalone FinancialStatements section of our report. We are independent of the Company in accordance with theCode 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 Act and the Rules there under and wehave fulfilled our other ethical responsibilities in accordance with these requirementsand the Code of Ethics. We believe that the audit evidence we have obtained is sufficientand appropriate to provide a basis for our opinion.

Emphasis of matter

We draw attention to:

Note 2 (b) to the Standalone financial statements regarding the management'sassessment of the impact of Covid-19 including assessment of liquidity and going concernassumptions recoverable values of its financial and non-financial assets appearing in thefinancial statements of the company as at 31 March 2021 and impact on revenues and costs.The Company has considered internal and external sources of information and has performedsensitivity analysis on the assumptions used and based on current estimates and itsjudgments on the implications expects to recover the carrying amount of these assets.This being an unprecedented event which is difficult to estimate the actual implicationscould vary.

Our opinion is not modified in respect of the above matter.

Key Audit Matters

Key audit matters are those matters that in our professional judgment were of mostsignificance in our audit of the financial statements of the current period. These matterswere addressed in the context of our audit of the standalone financial statements as awhole and in forming our opinion thereon and we do not provide a separate opinion onthese matte

We have determined the matters described below to be the key audit matters to becommunicated in our report.

Key Audit Matter Description Our Response
Impairment assessment of Property Plant and Equipment (PPE) of one hotel unit. (Refer Note 2(b) of Financial Statements) In view of the continuing operating losses made by one hotel unit and due to significant management and auditor judgement involved in impairment testing we identified this matter as a Key Audit Matter.. Our audit procedures in relation to impairment testing of the unit were:
At the end of each year management reviews the carrying amount of the assets to determine if there is any indication of impairment loss • Understanding the management's and those charged with governance (TCWG)'s process for estimating the recoverable amount of the assets
If any such indication exists management assesses the recoverable amount of those assets. • Evaluating the reasonableness of the assumptions judgements projected cash flows and key inputs considered by the management by comparing those estimates with market data and company specific information available and also the impact of Covid-19 pandemic.
Management also carries out a valuation of the hotel building once in three yea The estimation of the recoverable amount of the assets at the unit involves management judgements and is dependent on certain assumptions and significant inputs including market capitalisation rates and estimated revenue per available room which are affected by expected future market or economic conditions of the hospitality industry. • Evaluating the historical accuracy of the management's assessment by comparing the past estimates to the current year actual performance of the company.
• Reading the valuation report and validating key assumptions used in the valuation and rationale for those assumptions

Information Other than the Standalone Financial Statements and Auditors' Report Thereon

The Company's management and Board of Directors are responsible for the preparation ofthe other information. The other information comprises the information included in theDirectors report / the management report but does not include the standalone financialstatements and our auditors' report thereon.

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 and in doing so consider whether the other informationis materially inconsistent with the standalone financial statements or our knowledgeobtained during the audit or otherwise appears to be materially misstated. If based onthe work we have performed we conclude that there is a material misstatement of thisother information we are required to report that fact. We have nothing to report in thisregard.

Responsibilities of the Management and Those Charged with Governance for StandaloneFinancial 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 standalone financialstatements that give a true and fair view of the state of affairs 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) prescribed under section 133 of the Act. This responsibility alsoincludes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets of the Company and for preventing and detecting fraudsand other irregularities; selection and application of appropriate accounting policies;making judgments and estimates that are reasonable and prudent; and design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the accuracy and completeness of the accounting records relevant to thepreparation and presentation of the standalone financial statements 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 and the Board ofDirectors are responsible for assessing the Company's ability 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 Directors is also responsible for overseeing the Company's financialreporting process.

Auditors' 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 auditors' 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 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 standalonefinancial statements whether due to fraud or error design and perform audit proceduresresponsive to those risks and obtain audit evidence that is sufficient and appropriate toprovide a basis for our opinion. The risk of not detecting a material misstatementresulting from fraud is higher than for one resulting from error as fraud may involvecollusion forgery intentional omissions misrepresentations or the override of internalcontrol.

• Obtain an understanding of internal financial control relevant to the audit inorder to design audit procedures that are appropriate in the circumstances. Under section143(3) (i) of the Act we are also responsible for expressing our opinion on whether thecompany has adequate internal financial controls with reference to the standalonefinancial statements in place and the 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 the management and Board of Directors' use ofthe going concern basis of accounting and based on the audit evidence obtained whether amaterial uncertainty exists related to events or conditions that may cast significantdoubt on the Company's ability to continue as a going concern. If we conclude that amaterial uncertainty exists we are required to draw attention in our auditors' report tothe related disclosures in the standalone 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 auditors' report. However future events or conditions maycause the Company to cease to continue as a going concern; and

• Evaluate the overall presentation structure and content of the standalonefinancial statements including the disclosures and whether the standalone financialstatements represent the underlying transactions and events in a manner that achieves fairpresentation.

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 matte We describe these matters inour auditors' report unless law or regulation precludes public disclosure about the matteror when in extremely rare circumstances we determine that a matter should not becommunicated in our report because the adverse consequences of doing so would reasonablybe expected to outweigh the public interest benefits of such communication.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors' Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of section 143 ofthe Act we give in the "Annexure A" a statement on the matters specified inparagraphs 3 and 4 of the Order to the extent applicable.

2. 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 Changes in Equity andthe standalone statement of cash flows dealt with by this Report are in agreement with thebooks of account.

(d) At this juncture we are unable to say if the matter described in the Emphasis ofMatter paragraph above will have an adverse effect on the functioning of the Company.

(e) In our opinion the aforesaid standalone financial statements comply with theIndian Accounting Standards (Ind AS) prescribed under Section 133 of the Act.

(f) On the basis of the written representations received from the directors as on 31March 2021 taken on record by the Board of Directors none of the directors isdisqualified as on 31 March 2021 from being appointed as a director in terms of Section164 (2) of the Act.

(g) With respect to the adequacy of the internal financial controls with reference tothe standalone financial statements of the Company and the operating effectiveness of suchcontrols refer to our separate Report in "Annexure B".

(h) 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 as at 31 Match 2021 onits financial position in its standalone financial statements - Refer Note 29 to thestandalone financial statements;

ii. The Company did not have any long-term contracts including derivative contracts forwhich there were any material foreseeable losses.

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 31 March2021; and

3. With respect to the matter to be included in the Auditors' Report under section197(16):

In our opinion and according to the information and explanations given to us theremuneration paid by the Company to its directors during the current year is in accordancewith the provisions of Section 197 of the Act. The remuneration paid to any director isnot in excess of the limit laid down under Section 197 of the Act.

For PKF Sridhar & Santhanam LLP

Chartered Accountants

Firm's Registration No.003990S/S200018

S Rajeshwari

Partner

Membership No. 024105

UDIN: 21024105AAAABF9218

Place of Signature: Chennai

Date: 23rd April 2021

Annexure A

Referred to in paragraph 1 on 'Report on Other Legal and Regulatory Requirements' ofour report of even date to the members of Oriental Hotels Limited ("theCompany") on the standalone financial statements as of and for the year ended 31March 2021.

(i) In respect of the Company's fixed assets (Property plant and equipment):

(a) The Company has maintained proper records showing full particulars includingquantitative details and situation of fixed assets

(b) The Company has a regular programme of physical verification of its fixed assets bywhich all fixed assets are verified in a phased manner over a period of three yea In ouropinion this periodicity of physical verification is reasonable having regard to the sizeof the Company and the nature of its assets. Pursuant to the programme certain fixedassets were physically verified by the management during the year. In our opinion andaccording to the information and explanations given to us no material discrepancies werenoticed 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 provided to us we report thatthe title deeds comprising all the immovable properties of the land and buildings whichare freehold are held in the name of the Company or amalgamated company as at BalanceSheet date. In respect of immovable properties of land and building that have been takenon lease and disclosed as right of use assets in the standalone financial statements thelease agreements are in the name of the Company.

(ii) As explained to us the inventories have been physically verified by themanagement during the year at reasonable intervals and the discrepancies noticed on suchverification were not material and have been appropriately dealt with in the books ofaccounts.

(iii) Based on our audit procedures & according to the information and explanationgiven to us the Company has not granted any loans secured or unsecured to partiescovered in the register maintained under section 189 of the Act and hence 3(iii) of theOrder is not applicable to the Company.

(iv) In our opinion and according to the information and explanation given to us theCompany has complied with provisions of Section 185 and 186 of the Act in respect of grantof loans making investments and providing guarantees and securities as applicable.

(v) Based on our audit procedures & according to the information and explanationgiven to us the Company has not accepted any deposits from the public within the meaningof the Act and the rules made there under and hence clause 3(v) of the Order is notapplicable.

(vi) The Company is not required to maintain cost records specified by the CentralGovernment under sub section (1) of section 148 of the Act.

(vii) According to the information and explanations given to us and the records of theCompany examined by us the Company has generally been regular in depositing undisputedstatutory dues including provident fund employees' state insurance income-tax duty ofcustoms duty of excise Goods and Services Tax (GST) cess and any other statutory duesas applicable with the appropriate authorities.

According to the information and explanation given to us and the records of the Companyexamined by us no undisputed amounts payable in respect of provident fund employees'state insurance income-tax duty of customs duty of excise Goods and Services Tax(GST) cess and any other statutory dues were in arrears as at 31 March 2021 for a periodof more than six months from the date they became payable.

(a) According to the information and explanations given to us and based on ourexamination of the records of the Company there are no dues of Income-tax Sales TaxService tax Goods and Services Tax (GST) Duty of customs Excise duty and Value addedtax as at 31 March 2021 which have not been deposited with the appropriate authorities onaccount of any dispute except as stated below:

Nature of Statute Amount Demanded (in lakhs) Amount not paid under dispute (in lakhs) Period to which amounts relate to Forum where dispute is pending
Entry Tax 3.48 2.79 2012-13 Honourable Madras High Court
37.41 30.17 2010-11 to 2012-13 Appellate Tribunal Ernakulam
Luxury Tax 9.20 9.20 2012-13 Assistant Commissioner (CT) Madurai Rural (South) Assessment Circle Madurai.
17.58 16.60 1993-94 to 1996-97 Honourable Madras High Court
30.76 30.76 2004-05 and 2005-06 The Assistant commissioner Valluvarkottam Assessment circle
Sales Tax 46.34 27.46 2008-09 to 2010-11 The Assistant Commissioner (Commercial Taxes) Chennai
13.49 5.74 2010-12 The Joint Commissioner (CT) Legal Commissioner of Commercial Taxes
19.96 10.30 2008-092009-10 and 2013-14 Commissioner Appeals Trivandrum
Service Tax 88.74 88.74 2005-2010 Commissioner of Central Excise (Appeals) Mangalore

(viii) Based on our audit procedures and as per the information and explanations givenby the management the Company has not defaulted in repayment of loans or borrowings tofinancial institutions banks Government or dues to debenture holde

(ix) According to the information and explanations given to us the Company did notraise money by way of initial public offer or further public offer (including debtinstruments) during the year. Term loans raised during the year have been applied for thepurpose for which they were raised.

(x) To the best of our knowledge and belief and according to the information andexplanations given to us we report that no fraud by the Company or on the Company by itsofficers or employees has been noticed or reported during the year nor have we beeninformed of such case by the management.

(xi) According to the information and explanations given to us the managerialremuneration has been paid / provided in accordance with the requisite approvals mandatedby the provisions of section 197 read with Schedule V to the Act.

(xii) The Company is not a Nidhi company in accordance with Nidhi Rules 2014.Accordingly the provisions of clause (xii) of the Order are not applicable.

(xiii) Based on our audit procedures and according to the information and explanationsgiven to us all the transactions entered into with the related parties during the yearare in compliance with Section 177 and Section 188 of the Act where applicable and thedetails have been disclosed in the standalone financial statements as required underIndian Accounting Standard (Ind AS) 24 - Related Party Disclosures.

(xiv) Based on our audit procedures and according to the information and explanationsgiven to us the Company has not made any preferential allotment of shares allotment orprivate placement of shares or fully or partly paid convertible debentures during the yearunder review. Accordingly the provisions of clause (xiv) of the Order are not applicable.

(xv) Based on our audit procedures and according to the information and explanationsgiven to us the Company has not entered into any non-cash transactions with directors orpersons connected with them.

(xvi) Based on our audit procedures and according to the information and explanationsgiven to us the Company is not required to be registered under Section 45-IA of ReserveBank of India Act 1934. Accordingly the provisions of clause (xvi) of the Order is notapplicable to the Company.

For PKF Sridhar & Santhanam LLP

Chartered Accountants

Firm's Registration No.003990S/S200018

S Rajeshwari

Partner

Membership No. 024105

UDIN: 21024105AAAABF9218

Place of Signature: Chennai

Date: 23rd April 2021

Annexure B

Referred to in paragraph 2(g) on 'Report on Other Legal and Regulatory Requirements' ofour report of even date

Report on the Internal Financial Controls with reference to the aforesaid standalonefinancial statements under Clause (i) of Sub-section 3 of Section 143 of the CompaniesAct 2013 ("the Act")

We have audited the internal financial controls of Oriental Hotels Limited ("theCompany") as of 31 March 2021 in conjunction with our audit of the standalonefinancial statements of the Company for the year ended on that date

Management's Responsibility for Internal Financial Controls

The Company's management and the Board of Directors are responsible for establishingand maintaining internal financial controls based on the internal control with referenceto financial statements criteria established by the Company considering the essentialcomponents of internal control stated in the Guidance Note issued by the Institute ofChartered Accountants of India. These responsibilities include the design implementationand maintenance of adequate internal financial controls that were operating effectivelyfor ensuring the orderly and efficient conduct of its business including adherence tocompany's policies the safeguarding of its assets the prevention and detection of fraudsand errors the accuracy and completeness of the accounting records and the timelypreparation of reliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

Our responsibility is to express an opinion on the Company's internal financialcontrols with reference to financial statements based on our audit. We conducted our auditin 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 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 tofinancial 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 financial statements and their operatingeffectiveness. Our audit of internal financial controls with reference to financialstatements included obtaining an understanding of internal financial controls assessingthe risk that a material weakness exists and testing and evaluating the design andoperating effectiveness of internal control based on the assessed risk. The proceduresselected depend on the auditor's judgement 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 withreference to financial statements.

Meaning of Internal Financial Controls with reference to standalone financialstatements

A Company's internal financial control 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 control withreference to financial statements includes those policies and procedures that

(1) pertain to the maintenance of records that in reasonable detail accurately andfairly reflect the transactions and dispositions of the assets of the Company;

(2) provide reasonable assurance that transactions are recorded as necessary to permitpreparation of financial statements in accordance with generally accepted accountingprinciples and that receipts and expenditures of the Company are being made only inaccordance with authorizations of management and directors of the Company; and

(3) provide reasonable assurance regarding prevention or timely detection ofunauthorized acquisition use or disposition of the Company's assets that could have amaterial effect on the financial statements.

Inherent Limitations of Internal Financial Controls with reference to standalonefinancial statements

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 control 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 with certain changes done for remote workenvironment and such internal financial controls were operating effectively as at 31March 2021 based on the internal control with reference to financial statements 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.

For PKF Sridhar & Santhanam LLP

Chartered Accountants

Firm's Registration No.003990S/S200018

S Rajeshwari

Partner

Membership No. 024105

UDIN: 21024105AAAABF9218

Place of Signature: Chennai

Date: 23rd April 2021

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