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The Byke Hospitality Ltd.

BSE: 531373 Sector: Services
NSE: BYKE ISIN Code: INE319B01014
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VOLUME 11965
52-Week high 35.60
52-Week low 10.10
P/E
Mkt Cap.(Rs cr) 121
Buy Price 30.20
Buy Qty 181.00
Sell Price 31.00
Sell Qty 270.00
OPEN 30.00
CLOSE 30.45
VOLUME 11965
52-Week high 35.60
52-Week low 10.10
P/E
Mkt Cap.(Rs cr) 121
Buy Price 30.20
Buy Qty 181.00
Sell Price 31.00
Sell Qty 270.00

The Byke Hospitality Ltd. (BYKE) - Auditors Report

Company auditors report

TO

THE MEMBERS OF

THE BYKE HOSPITALITY LIMITED.

Report on the Audit of Indian Accounting Standards (Ind AS) Financial Statements

Opinion

We have audited the financial statements of THE BYKE HOSPITALITY LIMITED ("theCompany") which comprise the Balance Sheet as at March 31 2019 and the Statementof Profit and Loss (including Other Comprehensive Income) Statement of Changes in Equityand Statement of Cash Flows for the year then ended on that date and a summary of thesignificant accounting policies and other explanatory information (hereinafter referred toas "the financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us the aforesaid financial statements give the information required by theCompanies 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 2019 profit and total comprehensiveincome changes in equity and its cash flows for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards onAuditing (SAs) specified under section 143(10) of the Act. Our responsibilities underthose Standards are further described in the Auditor's Responsibilities for the Audit ofthe Financial 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 (ICAI) together with the Independence requirements that are relevant to our audit ofthe financial statements under the provisions of the Act and the Rules made thereunderand we have fulfilled our other ethical responsibilities in accordance with theserequirements and the ICAI's Code of Ethics. We believe that the audit evidence we haveobtained is sufficient and appropriate to provide a basis for our audit opinion on thefinancial statements.

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.

1. Estimates Involving in Capitalisation of Capital Expenditure and determining theiruseful lives (Refer Note 2" Significant Accounting Policies" CriticalAccounting Estimates and Note 3 "Property Plant and Equipment" for details)

Company has capitalized items of Property Plant and Equipment (PPE) mainly related tothe machinery installed on various leased hotels acquired in the year. Expenditure such asfreight cost and acquisition cost are capitalized. Identification and allocation of therelated expenditures involves judgement and estimation of future economic benefit.

The useful lives of PPE items are based on management's estimates regarding the periodduring which the asset or its significant components will be used. The estimates are basedon historical experiences market practices and Company's decision on technical evaluationof useful lives of the Machinery.

Capital expenditure and new acquisition is not considered to be an area of significantrisk for our audit but as it requires considerable time and resource to audit due to itsmagnitude it is considered to be a key audit matter.

Principal Audit Procedure

We assessed whether the Company's accounting policy in relation to the capitalisationof expenditures are in sync and in compliance with IND AS and found them to be consistent.

We obtained a listing of capital expenditures and major acquisition during the yearand on a sample basis checked whether the assets were undertaken based on internalpurchase order that had been properly approved by the key person with such authority withno material exceptions noted. We inspected a sample of contracts and underlying invoicesto determine whether the classification between capital and operating expenditure wasappropriate. We noted no material exceptions.

We evaluated whether the useful lives of the component determined and applied by themanagement were in line with historical experience Company's assessment and the marketpractice.

We checked whether the depreciation of PPE items was commenced timely by comparing thedate of the reclassification from work in progress to asset in use with the date of theact of completion of the work. We noted no material exceptions.

Reference to related disclosures

The Company has provided information on the disclosure of the addition deletion of PPEand depreciation for the year on such addition and existing asset in Note 3 of thefinancial statement.

2. Recognition and Measurement of Deferred Tax

The recognition and measurement of deferred tax items requires at the level of the taxentity the complete determination of all differences between the recognition and themeasurement of assets and liabilities in accordance with the respective local taxprovisions and financial reporting in accordance with IND AS as well as the calculation oftax loss carry forward. This requires the significant calculation on account of carryforward of losses Mat Credit entitlement and identification of temporary and deductibledifferences. Furthermore the assessment of the ability to use deferred tax assets isbased on the expectations of the management regarding the Company's economic developmentwhich is influenced by the current market environment and the assessment of future marketdevelopment (Domestic and Overseas) and thus requires the use of judgment.

Deferred Tax disclosed in Note 17 of the Financial Statement of Company for year endedinclude Deferred tax asset created on temporary deductible difference of Rs 822.74 lacs.In light of this the recognition and measurement of deferred taxes was a key auditmatter.

Principal Audit Procedure

In assessing the recognition and measurement of deferred taxes for the Company amongother procedures we analyzed the underlying processes for the complete capture andmeasurement of deferred taxes and examined the controls implemented to prevent or detectand correct errors.

Current tax laws allow to carry forward unused tax loss and unused tax credit for 8assessment years and 15 assessment years respectively from the assessment year in whichsuch tax loss/tax credit was incurred.

We examined on a sample basis the identification and quantification of differencesbetween the recognition and measurement of assets and liabilities according to taxregulations and financial reporting pursuant to IND AS. We also reperformed thecalculation of deferred taxes checking that the correct tax rate was applied (EnactedIncome Tax Rate-for FY 19-20 since the asset going to be realised in future period: Para47 of IND AS 12). We compared the tax plans with the Company's budget on a sample basis interms of the recoverability of deferred tax assets from temporary differences and fromunused tax credit. We have also assessed critically whether the sales and taxable profitbefore tax loss adjustment forecast are reasonable in relation to historical trendscurrent year performance and plans. We have also focused on adequacy of the Company'sdisclosures on deferred income tax positions and assumption used.

Our audit procedures did not lead to any reservations regarding the recognition andmeasurement of deferred taxes.

Reference to related disclosures

The Company has provided information on the recognition and measurement of deferredtaxes in the Note 17 of the financial statements.

Information Other than the Financial Statements and Auditor's Report Thereon

The Company's Board of Directors is responsible for the preparation of the otherinformation. The other information comprises the information included in the Annualreport for example Management Discussion and Analysis Board's Report including Annexuresto Board's Report Business Responsibility Report Corporate Governance and Shareholder'sInformation but does not include the financial statements and our auditor's reportthereon. The Annual report is expected to be made available to us after the date of thisour auditor's report. Our opinion on the financial statements does not cover the otherinformation and we will not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information identified above when it becomes available and in doing soconsider whether the other information is materially inconsistent with the financialstatements or our knowledge obtained in the audit or otherwise appears to be materiallymisstated.

When we read Annual Report if we conclude that there is a material misstatementtherein we are required to communicate the matter to those charged with governance.

Management's Responsibilities for the Financial Statements

The Company's Board of Directors is responsible for the matters stated in section134(5) of the Act with respect to the preparation of these financial statements that givea true and fair view of the financial position financial performance total comprehensiveincome changes in equity and cash flows of the Company in accordance with the Ind AS andother accounting principles generally accepted in India. This responsibility also includesmaintenance of adequate accounting records in accordance with the provisions of the Actfor safeguarding of the assets of the Company and for preventing and detecting frauds andother irregularities; selection and application of appropriate 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 financial statements that give a true and fair viewand are free from material misstatement whether due to fraud or error.

In preparing the financial statements the 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 theManagement either intends to liquidate the Company or to cease operations or has norealistic alternative but to do so.

The Board of Directors are responsible for overseeing the Company's financial reportingprocess.

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.

• Materiality is the magnitude of the misstatement in the financial statementthat individually or in aggregate makes it probable that the economic decision of thereasonably knowledgeable user of the financial statement may be influenced. We consideredquantitative materiality and qualitative factor in (i) planning the scope of our auditwork and in evaluating the result of our work and (ii) evaluate the effects of anyidentified misstatement in the financial statements.

We communicate with those charged with governance regarding among other matters theplanned scope and timing of the audit and significant audit findings including anysignificant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have compliedwith relevant ethical requirements regarding independence and to communicate with themall relationships and other matters that may reasonably be thought to bear on ourindependence and where applicable related safeguards.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditor's Report) Order 2016 ("the Order")issued by the Central Government of India in terms of sub-section (11) of Section 143 ofthe Companies Act 2013 we give in the "Annexure A" a statement on the mattersspecified in paragraphs 3 and 4 of the Order.

2. As required by Section 143(3) of the Act based on our audit 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 the Statement of Changes in Equity and the Cash Flow Statement dealt with by thisReport are in agreement with the books of account.

(d) In our opinion the aforesaid financial statements comply with the Ind AS specifiedunder 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 March31 2019 taken on record by the Board of Directors none of the directors is disqualifiedas on March 31 2019 from being appointed as a director in terms of Section 164(2) of theAct.

(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 B". Our report expresses an unmodified opinion onthe adequacy and operating effectiveness of the Company's Internal Financial Controls overthe financial reporting.

(g) With respect to the other matters to be included in the Auditor's Report inaccordance with the requirements of Section 197(16) of the Act as amended

In our opinion and to the best of our information and according to the explanationsgiven to us the remuneration paid by the Company to its directors during the year is inaccordance with the provisions of Section 197 of the Act.

(h) 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 as amended inour opinion and to the best of our information and according to the explanations given tous:

i. The Company does not have any pending litigations.

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 amount required to be transferred to theInvestor Education and Protection Fund by the Company.

For Borkar & Muzumdar
Chartered Accountants
Firm Registration Number: 101569W
Namit Agarwal
Date: May 29 2019 Partner
Place: Mumbai Membership Number: 533747

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

i. (a) The Company is maintaining proper records showing full particulars includingquantitative details and situation of property plant and equipment.

(b) The fixed assets are physically verified by the Management according to a phasedprogramme designed to cover all the items over the year which in our opinion isreasonable having regard to the size of the Company and the nature of its assets. Nomaterial discrepancies have been noticed on such verification.

(c) The title deeds of immovable properties as disclosed in Note 3 on Property Plantand Equipment to the financial statements are held in the name of the Company.

ii. The physical verification of inventory has been conducted at reasonable intervalsby the Management during the year. The discrepancies noticed on physical verification ofinventory as compared to book records were not material and have been appropriately dealtwith in the books of accounts.

iii. The Company has not granted any loans secured or unsecured to companies firmslimited liability partnerships or other parties covered in the register maintained underSection 189 of the Act. Therefore the provisions of Clause 3(iii) (iii)(a) (iii)(b) and(iii)(c) of the said Order are not applicable to the 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 Companies Act 2013in respect of the loans and investments made and guarantees and security provided by it.

v. The Company has not accepted any deposits from the public within the meaning ofSections 73 74 75 and 76 of the Act and the Rules framed there under to the extentnotified.

vi. The Central Government of India has not specified the maintenance of cost recordsunder sub-section (1) of Section 148 of the Act for any of the products of the Company.

vii. (a) According to the information and explanations given to us and the records ofthe Company examined by us in our opinion the Company is regular in depositing theundisputed statutory dues including provident fund employees' state insurance incometax sales tax service tax goods & service tax duty of customs duty of excisevalue added tax and other material statutory dues as applicable with the appropriateauthorities.

(b) According to the information and explanations given to us and the records of theCompany examined by us there are no dues of income tax sales tax service tax goods& service tax duty of customs duty of excise or value added tax or cess which havenot been deposited on account of any dispute.

viii. According to the records of the Company examined by us and the information andexplanation given to us the Company has not defaulted in repayment of loans or borrowingsto any financial institution or banks at the balance sheet date. The Company does not haveany loans or borrowings from Government. Further the Company has not issued anydebentures.

ix. During the current year the Company has not raised moneys by way of initial publicoffer or further public offer (including debt instruments). In our opinion and accordingto the information and explanations given to us the term loans have been applied by theCompany during the year for the purposes for which they were raised.

x. During the course of our examination of the books and records of the Companycarried out in accordance with the generally accepted auditing practices in India andaccording to the information and explanations given to us we have neither come across anyinstance of material fraud by the Company or on the Company by its officers or employeesnoticed or reported during the year nor we have been informed of any such case by theManagement.

xi. The Company has paid/ provided managerial remuneration in accordance with therequisite approvals mandated by the provisions of Section 197 read with Schedule V to theAct.

xii. As the Company is not a Nidhi Company and the Nidhi Rules 2014 are not applicableto it the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance withthe provisions of Sections 177 and 188 oftheAct. The details of such related partytransactions have been disclosed in the financial statements as required under the IndianAccounting Standard (Ind-AS) 24 "Related Party Disclosures" specified underSection 133 of the Act read with Rule 7 of the Companies (Accounts) Rules 2014.

xiv. The Company has neither made any preferential allotment of shares or fully orpartly convertible debentures nor made any private placement of fully or partlyconvertible debentures during the year under review.

xv. The Company has not entered into any non-cash transactions with its directors orpersons connected with him. Accordingly the provisions of Clause 3(xv) of the Order arenot applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the ReserveBank of India Act 1934. Accordingly the provisions of Clause 3(xvi) of the Order are notapplicable to the Company.

For Borkar & Muzumdar
Chartered Accountants
Firm Registration Number: 101569W
Namit Agarwal
Date: May 29 2019 Partner
Place: Mumbai Membership Number: 533747

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section143 of the Act

1. We have audited the internal financial controls over financial reporting of The BykeHospitality Limited ("the Company") as of March 31 2019 in conjunction with ouraudit of the financial statements of the Company for the year ended on that date.

Management's Responsibility for Internal Financial Controls

2. The Board of Director's are 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 FinancialReporting" issued by the Institute of Chartered Accountants of India (ICAI). Theseresponsibilities include the design implementation and maintenance of adequate internalfinancial controls which were operating effectively for ensuring the orderly and efficientconduct of its business including adherence to the respective company's policies thesafeguarding of its assets the prevention and detection of frauds and errors theaccuracy and completeness of the accounting records and the timely preparation ofreliable financial information as required under the Companies Act 2013.

Auditors' Responsibility

3. Our responsibility is to express an opinion on the Company's internal financialcontrols over financial reporting with reference to these financial statements based onour audit. We conducted our audit in accordance with the Guidance Note on Audit ofInternal Financial Controls Over Financial Reporting ("the Guidance Note") andthe Standards on Auditing as specified under Section 143(10) of the Companies Act 2013to the extent applicable to an audit of internal financial controls and both issued bythe Institute of Chartered Accountants of India (ICAI). Those Standards and the GuidanceNote require that we comply with ethical requirements and plan and perform the audit toobtain reasonable assurance about whether adequate internal financial controls overfinancial reporting with reference to these financial statements was established andmaintained and if such controls operated effectively in all material respects.

4. Our audit involves performing procedures to obtain audit evidence about the adequacyof the internal financial controls system over financial reporting with reference to thesefinancial statements and their operating effectiveness. Our audit of internal financialcontrols over financial reporting included obtaining an understanding of internalfinancial controls over financial reporting with reference to these financial statementsassessing 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.

Meaning of Internal Financial Controls Over Financial Reporting with Reference to theseFinancial Statements

6. A company's internal financial control over financial reporting with reference tothese financial statements is a process designed to provide reasonable assurance regardingthe reliability of financial reporting and the preparation of financial statements forexternal purposes in accordance with generally accepted accounting principles A company'sinternal financial control over financial reporting with reference to these financialstatements includes those policies and procedures that:

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

(ii) 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 authorisations of management and directors of the company; and

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

Inherent Limitations of Internal Financial Controls Over Financial Reporting withReference to these Financial Statements

7. Because of the inherent limitations of internal financial controls over financialreporting with reference to these financial statements including the possibility ofcollusion or improper management override of controls material misstatements due to erroror fraud may occur and not be detected. Also projections of any evaluation of theinternal financial controls over financial reporting with reference to these financialstatements to future periods are subject to the risk that the internal financial controlover financial reporting with reference to these financial statements may becomeinadequate because of changes in conditions or that the degree of compliance with thepolicies or procedures may deteriorate.

Opinion

8. In our opinion and to the best of our information and according to the explanationsgiven to us the Company has in all material respects an adequate internal financialcontrols system over financial reporting with reference to these financial statements andsuch internal financial controls over financial reporting with reference to thesefinancial statements were operating effectively as at March 31 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.

Chartered Accountants
Firm Registration Number: 101569W
For Borkar & Muzumdar
Date: May 29 2019 Namit Agarwal

Partner

Place: Mumbai Membership Number: 533747

.