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Sayaji Hotels Ltd.

BSE: 523710 Sector: Services
NSE: SAYAJIHOTL ISIN Code: INE318C01014
BSE 00:00 | 07 Dec 237.40 1.40
(0.59%)
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NSE 05:30 | 01 Jan Sayaji Hotels Ltd
OPEN 230.00
PREVIOUS CLOSE 236.00
VOLUME 291
52-Week high 288.00
52-Week low 167.00
P/E 116.95
Mkt Cap.(Rs cr) 416
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 230.00
CLOSE 236.00
VOLUME 291
52-Week high 288.00
52-Week low 167.00
P/E 116.95
Mkt Cap.(Rs cr) 416
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

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 2020 and the statementof Profit and Loss(including Other Comprehensive Income) statement of changes in equityand 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("Ind AS") and other accounting principles generally accepted in India of thestate of affairs of the Company as at March 31 2020 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 thestandalone financial statements under the provisions of the Companies Act 2013 and theRules there under 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 on thestandalone financial statements.

Emphasis of matter

We draw attention to Note 55 to the standalone financial statements which describesthe possible effect of uncertainties relating to COVID-19 pandemic on the Company'sfinancial performance as assessed by the Management.

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 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
Impact of COVID-19 pandemic on Going Concern Principal Audit Procedures
Refer Note 55 - "Going Concern" and Note-1 (D-6) "Estimation related to COVID-19" of the standalone financial statements Obtained an understanding from Management the procedure of preparing forecasted statements and Compared the forecasted statement of profit and loss and cash flows with the Company's business plan approved by the board of directors. Obtained an understanding of key assumptions adopted by the Company in preparing the forecasted statement of profit and loss and cash flow and analyzed the same based on our understanding of the Company's business.
On 11th March 2020 the World Health Organization declared the Novel Corona virus (COVID-19) outbreak to be a pandemic.
The Indian Government has imposed lock-downs across the country from 22nd March 2020 up to 30th June 2020.
These lockdowns and restrictions due to COVID-19 pandemic have posed significant challenges to the businesses of the Company. This required the Company to assess impact of COVID-19 on its operations. Obtained understanding of new borrowing arrangements subsequent to the year-end and also cash & cash equivalents available with the company.
The Company has assessed the impact of COVI D-19 on the future cash flow projections. The Company has also prepared a range of scenarios to estimate financing requirements. Assessed impact of Government's announcement to lift the lockdown restrictions and Company's plan to re-open hotels in a phased manner.
In view of the above we identified impact of COVID-19 on going concern as a key audit matter. Assessed disclosures made in the standalone financial statements with regard to the above. Refer to note 55 and note1 (D-6).
Adoption of Ind AS 116-Leases Principal Audit Procedures
As described in Note 43 to the standalone financial statements the Company adopted Ind AS 116 Leases (‘Ind AS 116') on 1st April 2019. The Company has recognized right-of-use assets amounting to Rs. 10631.57 Lakhs and lease liabilities aggregating 7809.33 Lakhs as of 1st April 2019. The lease liabilities are initially measured by discounting future lease payments during the lease term as per agreement. Our audit procedures included the following: We obtained an understanding and evaluated the design of controls overthe Company's accounting of Ind AS 116. We reviewed all the lease agreements and evaluated the process of the determination of IBR and lease term.
We checked the accuracy of the Company's computation of initial right-of-use assets and lease liabilities.
Auditing the Company's adoption of Ind AS 116 involved judgment because the Company has significant number of lease contracts. Certain aspects of Ind AS 116 required the Company to exercise judgments including determination of Incremental Borrowing Rate (‘IBR') and lease term. Examined the presentation and disclosures relating to Ind AS 116 including disclosures relating to transition in the standalone financial statements

Management's and Board of Directors' Responsibility for the Standalone FinancialStatements

The Company's Management and Board of Directors are responsible for the matters statedin section 134(5) of the Companies Act 2013 with respect to the preparation of thesestandalone financial statements that give a true and fair view of the state of affairsprofit and other comprehensive income changes in equity and cash flows of the Company inaccordance 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 standalone financial statements Management and Board of Directors areresponsible for assessing the Company's ability to continue as a going concerndisclosing as applicable matters related to going concern and using the going concernbasis of accounting unless the Board of Directors either intends to liquidate the Companyor to cease operations or has no realistic alternative but to do so Board of Directorsare also responsible for overseeing the Company's financial reporting 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 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 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 in standalone financial statements made bythe Management and Board of Directors.

• 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 auditor's 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 auditor's report. However future events or conditions maycause the Company to cease to continue as a going concern.

• 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 mannerthat 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 ouraudit.

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

2. (A) 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 ofouraudit.

(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 includingOther Comprehensive Income Statement of Changes in Equity and the standalone Statement ofCash Flow dealt with by this Report are in agreement with the relevant books of account.

(d) In our opinion the aforesaid standalone financial statements comply with the IndAS specified under Section 133 of the Act read with Rule 7 of the Companies (Accounts)Rules 2014.

(e) On the basis of the written representations received from the directors as on 31stMarch 2020 taken on record by the Board of Directors none of the directors isdisqualified as on 31st March 2020 from being appointed as a director in terms of Section164 (2) of the Act.

(f) With respectto 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 B".

(B) 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 has disclosed the impact of pending litigations as at 31st March 2020on its financial position in its standalone financial statements - Refer Note 47 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 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: 30h July 2020 M. No.402560
UDIN: 20402560AAAAEG5773

ANNEXURE-A 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 31 ST MARCH 2020.

(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 Right of UseAssets in the standalone financial statements the lease agreements are in the name of theCompany however there is a notice for cancellation of lease by the Indore DevelopmentAuthority for cancelling the lease of one leasehold land situated in Indore which companyis 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 otherTribunal.

(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 31.03.2020 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)
Income Tax Act 1961 Income Tax A.Y.10-11 Commissioner of Income Tax (Appeals) Indore. 3.56
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 Taxes Indore. 0.56
2011-12 37.72
2012-13 2.87
2013-14 Commissioner (Appeal) Commercial Taxes Indore 0.52
2014-15 2.91
2015-16 3.61
M.P. Luxury Entertainment & Advertisement Tax Act 2011 Luxury Tax 2011-2012 Commissioner (Appeal) Commercial Taxes Indore 2.35
2012-2013 40.60
2013-2014 30.85
2014-2015 26.01
2015-2016 26.04
M.P. Entry Tax Act 1976 Entry Tax 2006-2007 Commissioner (Appeal) Commercial Taxes Indore 4.64
2012-2013 0.01
2014-2015 1.76
2015-2016 17.12
M.P. Municipal Corporation Act 1956 Property Tax 2016-2017 The Mayor-In-Council Indore Municipal Corporation Indore 55.12
2017-2018
Maharashtra Stamp Act 1958 Stamp duty 2018-19 Inspector General of Registration Chief Controlling Revenue Authority Pune 32.40
TOTAL 289.74

(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 forwhich 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 duringtheyear.

(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: 30h July 2020 M. No.402560
UDIN: 20402560AAAAEG5773

ANNEXURE-B 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 31st March 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 (‘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 whetheradequate internal financial controls over financial reporting was established andmaintained and if such controls 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 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 overfinancial reporting is a process designed toprovide 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 31st March 2020 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 :30h July 2020 M. No. 402560
UDIN: 20402560AAAAEG5773

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