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Sayaji Hotels Ltd.

BSE: 523710 Sector: Services
NSE: SAYAJIHOTL ISIN Code: INE318C01014
BSE 00:00 | 22 May 176.10 -9.15
(-4.94%)
OPEN

176.10

HIGH

186.00

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176.10

NSE 05:30 | 01 Jan Sayaji Hotels Ltd
OPEN 176.10
PREVIOUS CLOSE 185.25
VOLUME 170
52-Week high 278.00
52-Week low 176.10
P/E
Mkt Cap.(Rs cr) 309
Buy Price 177.00
Buy Qty 15.00
Sell Price 194.00
Sell Qty 10.00
OPEN 176.10
CLOSE 185.25
VOLUME 170
52-Week high 278.00
52-Week low 176.10
P/E
Mkt Cap.(Rs cr) 309
Buy Price 177.00
Buy Qty 15.00
Sell Price 194.00
Sell Qty 10.00

Sayaji Hotels Ltd. (SAYAJIHOTL) - Auditors Report

Company auditors report

To

The Members

Sayaji Hotels Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the standalone financial statements of Sayaji Hotels Limited ("theCompany") which comprise the balance sheet as at 31st March 2019 and the statementof Profit and Loss(including Other Comprehensive Income) the statement of changes inequity and the statement of cash flows for the year then ended and notes to the financialstatements including a summary of significant accounting policies and other explanatoryinformation (hereinafter referred to as "the 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 Companies Act 2013 ("the Act") in the manner so required and give a true andfair view in conformity with the Indian Accounting Standards prescribed under section 133of the Act read with the Companies (Indian Accounting Standards) Rules 2015 as amended("IndAS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2019 and the loss and total 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 Companies Act 2013. Our responsibilities under thoseStandards are further described in the Auditor's Responsibilities for the Audit of theFinancial Statements section of our report. We are independent of the Company inaccordance with the Code of Ethics issued by the Institute of Chartered Accountants ofIndia together with the ethical requirements that are relevant to our audit of thefinancial statements under the provisions of the 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 financial statements of the current period. These matterswere addressed in the context of our audit of the financial statements as a whole and informing our opinion thereon and we do not provide a separate opinion on these matters. Wehave determined the matters described below to be the key audit matters to be communicatedin our report.

Key Audit Matter Auditor's Response
Disputed Statutory Liabilities and its Disclosure Principal Audit Procedures
The Company operates in multiple States having multiple jurisdictions and has material disputes with local authorities and tax authorities on various matters which involves significant judgment to determine the possible outcome of these disputes. Obtained from the management an understanding of various disputes including uncertain tax positions and obtained details of Orders tax assessments and demands for the year ended March 312019.
Analysed orders and correspondences from various authorities and legal opinion taken by management for material disputes.
Refer Notes 46 to the Standalone Financial Statements. Discussed and analysed management's view on these disputes including estimates made in arriving tax positions.
We also analysed and assessed management's estimates of the possible outcome of the disputed matters and its bearing on company's overall financial position.

 

Inventory Principal Audit Procedures
The Company operates in Hotels Restaurants and Banqueting business where Inventory forms a major part of expense. Looking to the nature of business and type of inventory involved and significant inventory in circulation there is an inherent risk in control and management of inventory. Our Audit procedure included both test of internal controls and substantive procedures.
Evaluated the design of internal controls relating to recording of transactions involving inventory at each step such as purchase issue use and consumption.
Refer Notes 1(C)(8)& 11 to the Standalone Financial Statements. Full chain of transaction was tested on sampling basis including physical verification of inventory in circulation.
Evaluated the process of taking physical stock of inventory in circulation and matching the same with those showing System Records.

Management's Responsibility for the Standalone Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Companies Act 2013 with respect to the preparation of these standalonefinancial statements that give a true and fair view of the financial position financialperformance total comprehensive income changes in equity and cash flows of the Companyin accordance with the Ind AS and other accounting principles generally accepted in India.This responsibility also includes maintenance of adequate accounting records in accordancewith the provisions of the Act for safeguarding of the assets of the Company and forpreventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgments 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 ofthe accounting records relevant to the preparation and presentation of the financialstatement that give a true and fair view and are free from material misstatement whetherdue to fraud or error.

In preparing the financial statements management is responsible for assessing theCompany'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.

Those Board of Directors are also responsible for overseeing the Company's financialreporting process.

Auditor's Responsibilities for the Audit of the Financial Statements

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

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

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

• Obtain an understanding of internal control relevant to the audit in order todesign audit procedures that are appropriate in the circumstances. Under section 143(3)(i)of the Companies Act 2013 we are also responsible for expressing our opinion on whetherthe company has adequate internal financial controls system in place and the operatingeffectiveness of such controls.

• Evaluate the appropriateness of accounting policies used and the reasonablenessof accounting estimates and related disclosures made by management.

• Conclude on the appropriateness of management's use of the going concern basisof accounting 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 financial statements or if such disclosures are inadequate to modify our opinion.Our conclusions 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 financialstatements including the disclosures and whether the financial statements represent theunderlying transactions and events in a manner that achieves fair presentation.

• We communicate with those charged with governance regarding among othermatters the planned scope and timing of the audit and significant audit findingsincluding any significant deficiencies in internal control that we identify during ouraudit.

• We also provide those charged with governance with a statement that we havecomplied with relevant ethical requirements regarding independence and to communicatewith them all relationships and other matters that may reasonably be thought to bear onour independence and where applicable related safeguards.

• From the matters communicated with those charged with governance we determinethose matters that were of most significance in the audit of the financial statements ofthe current period and are therefore the key audit matters. We describe these matters inour auditor's 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

As required by the Companies (Auditor's Report) Order 2016 issued by the CentralGovernment of India in terms of subsection (11) of section 143 of the Companies Act 2013we give in the "Annexure B" a statement on the matters specified in paragraphs 3and 4 of the Order to the extent applicable.

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 Balance Sheet the Statement of Profit and Loss including Other ComprehensiveIncome Statement of Changes in Equity and the Statement of Cash Flow dealt with by thisReport are in agreement with the relevant books of account

(d) In our opinion the aforesaid standalone financial statements comply with the IndASspecified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules2014.

(e) On the basis of the written representations received from the directors as on 31stMarch 2019 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2019 from being appointed as a director in terms of Section164 (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 to ourseparate Report in "Annexure A".

(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 tous:

i. The Company has disclosed the impact of pending litigations on its financialposition in its financial statements - Refer Note 46 to the financial statements;

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

iii. There were no amounts which were required to be transferred to the investorEducation and Protection Fund by the Company.

For K.L. Vyas & Company
Chartered Accountants
FRN: 003289C
(Himanshu Sharma)
Place of Signature : Indore Partner
Date : 30th May 2019 M. No. 402560

ANNEXURE -A TO THE AUDITORS' REPORT

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 SayajiHotels Limited ("the Company") as of 31 March 2019 in conjunction with our auditof the standalone financial statements of the Company for the year ended on 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 Financial Reportingissued by the Institute of Chartered Accountants of India (‘ICAI'). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls that were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to company's policies the safeguarding ofits assets the prevention and detection of frauds and errors the accuracy andcompleteness of the accounting records and the timely preparation of reliable financialinformation as required under the Companies Act 2013.

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 Financial Reporting(the "Guidance Note") and the Standards on Auditing issued by ICAI and deemedto be prescribed under section 143(10) of the Companies Act 2013 to the extentapplicable to an audit of internal financial controls both applicable to an audit ofInternal Financial Controls and both issued by the Institute of Chartered Accountants ofIndia. Those Standards and the Guidance Note require that we comply with ethicalrequirements and plan and perform the audit to obtain

reasonable assurance about whether adequate internal financial controls over financialreporting was established and maintained and if such controls operated effectively in allmaterial 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 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 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 31 March 2019 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 by the Institute of CharteredAccountants of India.

For K.L. Vyas & Company
Chartered Accountants
FRN: 003289C
(Himanshu Sharma)
Place of Signature : Indore Partner
Date : 30th May 2019 M. No.402560

ANNEXURE -B TO THE AUDITORS' REPORT

ANNEXURE REFERRED TO IN CLAUSE 1 OF REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTSOF OUR REPORT OF EVEN DATE TO THE MEMBERS OF SAYAJI HOTELS LIMITED ON THE STANDALONE INDAS FINANCIAL STATEMENT FOR THE YEAR ENDED 31ST MARCH 2019.

(i) (a) The company has maintained proper records showing full particulars includingquantitative details of fixed assets however for some fixed assets situation of theassets is not given and identification numbers are also not been given which need to beupdated. We have been informed by Management that above Work is in progress.

(b) Physical verification of fixed assets has been carried out by the Management atmost of the Units in accordance with a phased programme of verification which in ouropinion provides for physical verification of all the fixed assets at reasonableintervals which in our opinion is reasonable having regard to the size of the companyand nature of its assets. 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 and on the basis of ourexamination of the conveyance deed provided to us we report that the title deedscomprising of all the immovable properties of land and buildings which are freehold arein the name of the Company as at the balance sheet date.

In respect of immovable properties been taken on lease and disclosed as fixed assets inthe standalone financial statements the lease agreements are in the name of the Companyhowever there is a notice for cancellation of lease by the Indore Development Authorityfor cancelling the lease of one leasehold land situated in Indore with carrying value ofRs.2291.62 Lacs which company is contesting.

(ii) (a) The physical verification of the inventory is being conducted on a monthlybasis by the management and no material discrepancies were noticed.

(iii) (a) Company has not granted any loan to any Company firm LLP or any other partyrequired to be covered in register maintained under section 189 of the Companies Act2013.

In view of situation explained as above provisions of clause 3 (iii) (b) & (c) ofthe Order are not applicable to be Company.

(iv) In our opinion and according to the information and explanations given to us thecompany has complied with the provisions of section 185 and 186 of the Act with respectto the loans and investments made.

(v) In our opinion and according to the information and explanations given to us theCompany has complied with the provisions of Sections 73 to 76 or any other relevantprovisions of the Companies Act 2013 and the Rules framed there under with regard to thedeposits accepted from the public. According to information and explanations given to usno order has been passed by the Company Law Board or the National Company Law Tribunal orthe Reserve Bank of India or any Court or any other Tribunal.

(vi) Central Government has not prescribed for the maintenance of cost records undersub-section 1 of section 148 of the Companies Act 2013 for any of the business activitycarried by the Company during the year under review.

(vii) (a) The Company is generally regular in depositing with appropriate authoritiesundisputed statutory dues including provident fund investor education protection fundemployees' state insurance income tax sales tax wealth tax custom duty excise dutyservice tax &cess and other material statutory dues as may be applicable to it.

According to the information and explanations given to us no undisputed amountspayable in respect of income tax wealth tax sales tax customs duty wealth tax exciseduty and cess were in arrears as at 31.03.2019 for a period of more than six months fromthe date they became payable.

(b) According to the information and explanations given to us details of the dues ofsale tax income tax customs duty wealth tax excise duty and cess which have not beendeposited on account of any dispute are given below.

Name of Statue Nature of Dues Period to which the amount relates Forum where the dispute is pending Total Amount (Rs. In Lakhs)
Finance Act 1994 and Service Tax laws Service Tax Mar.'05-Mar.'09 High Court of M.P. Indore Bench Indore 256.78
Service Tax 2009-2011 High Court of M.P. Indore Bench Indore within stipulated time. 800.74
Service Tax 2009-2013 Honourable CESTAT Mumbai. 39.27
Service Tax Apr.'11-Jun.'12 High Court of M.P. Indore Bench Indore within stipulated time 538.54
Service Tax Apr'12 - Mar.15 Commissioner (Appeals) Ahmedabad. 2.02
Service Tax Apr'15 - June 17 Commissioner of Service Tax - Baroda 1.96
Service Tax 2010-2015 Honourable CESTAT Mumbai. 46.05
Income Tax Act 1961 Income Tax A.Y.09-10 Commissioner of Income Tax (Appeals) Indore. 4.51
A.Y.10-11
A.Y.11-12
A.Y.12-13
A.Y.14-15 Commissioner of Income Tax (Appeals) Vadodara 1.09
M.P. Value Added Tax Act 2002 Value Added Tax 2010-11 Appellate Tribunal Commercial axes Indore. 0.56
2011-12 10.91
2011-12 Commissioner (Appeal) 37.72
2012-13 Commercial Taxes Indore 2.87
2013-14 0.52
2014-15 2.94
2015-16 3.61
M.P. Luxury Entertainment & Advertisement Tax Act 2011 Luxury Tax 2012-2013 Commissioner (Appeal) 40.60
2013-2014 Commercial Taxes Indore 30.85
2014-2015 26.00
2015-16 26.04
M.P. Entry Tax Act 1976 Entry Tax 2012-2013 Commissioner (Appeal) 0.01
2014-2015 Commercial Taxes Indore 1.76
2015-16 17.00
M.P. Municipal Corporation Act 1956 Property Tax 2015-16 The Mayor-In-Council Indore Municipal Corporation Indore 55.12
2016- 17 2017- 18
Maharashtra Stamp Act 1958 Stamp duty 2018-19 Inspector General of Registration Chief Controlling Revenue Authority Pune 32.40
TOTAL 1979.87

(viii) Based on our audit procedures and according to the information and explanationsgiven to us we are of the opinion that the Company has not defaulted in repayment ofloans or borrowing to financial institutions banks Government or dues to debentureholders.

(ix) The Company did not raise any money by way of initial public offer or furtherpublic offer (including debt instruments) during the year however the Company has raisedterm loans during the year and were applied for the purposes for which those were raised.

(x) According to the information and explanations given to us no fraud on or by thecompany has been noticed or reported during the course of our audit.

(xi) According to the information and explanations give 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. Accordingly paragraph 3(xii) of the Order is notapplicable.

(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 where applicable and details of suchtransactions have been disclosed in the financial statements as required by the applicableaccounting standards.

(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) 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 non-cashtransactions with directors or persons connected with him. Accordingly paragraph 3(xv) ofthe Order is not applicable.

(xvi) The Company is not required to be registered under section 45-IA of the ReserveBank of India Act 1934.

For K.L. Vyas & Company
Chartered Accountants
FRN: 003289C
(Himanshu Sharma)
Place of Signature : Indore Partner
Date : 30th May 2019 M. No. 402560