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U P Hotels Ltd.

BSE: 509960 Sector: Services
NSE: N.A. ISIN Code: INE726E01014
BSE 00:00 | 24 Feb U P Hotels Ltd
NSE 05:30 | 01 Jan U P Hotels Ltd
OPEN 261.00
PREVIOUS CLOSE 283.60
VOLUME 86
52-Week high 283.60
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 153
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00
OPEN 261.00
CLOSE 283.60
VOLUME 86
52-Week high 283.60
52-Week low 0.00
P/E
Mkt Cap.(Rs cr) 153
Buy Price 0.00
Buy Qty 0.00
Sell Price 0.00
Sell Qty 0.00

U P Hotels Ltd. (UPHOTELS) - Auditors Report

Company auditors report

To the Members of U. P. Hotels Limited

Report on the Audit of Financial Statements Opinion

We have audited the accompanying financial statements of U. P. Hotels Limited("the Company") which comprise the Balance Sheet as at March 312020 theStatement of Profit and Loss (including Other Comprehensive Income) Statement of Changesin Equity and Statement of Cash Flows for the year then ended and summary of significantaccounting policies and other explanatory information (hereinafter referred to as"the financial statements").

In our opinion and to the best of our information and according to the explanationsgiven to us except for the effects of the matters described in the Basis for QualifiedOpinion section of our report the aforesaid financial statements give the informationrequired by the Companies Act 2013 ("the Act") in the manner so required andgive a true and fair view in conformity with the Indian Accounting Standards prescribedunder section 133 of the Act read with the Companies (Indian Accounting Standards) Rules2015 as amended ("Ind AS") and other accounting principles generally acceptedin India of the state of affairs of the Company as at March 312020 the profit and totalcomprehensive income changes in equity and its cash flows for the year ended on thatdate.

Basis of Qualified Opinion

Attention is drawn to the following notes to the financial statements:-

1. Note No. 38.1 to 38.3 and 41(a) regarding non-compliance of Minimum PublicShareholding as explained in the said notes. As such the Company is yet to comply withRegulation 38 of SEBI (Listing Obligations and Disclosures Requirements) Regulations 2015with regard to Minimum Public Shareholding.

2. Note No. 41(b) i.e. the Company is yet to achieve 100% dematerialization of thepromoter's shareholding. As such the Company has not complied with Regulation 31(2) ofSEBI (Listing Obligations and Disclosures Requirements) Regulations 2015.

3. Note No. 41(c) i.e. the Related Party Transactions ("RPT") covered u/s 188of the Act during the year and previous years are not approved by the Audit Committee andBoard of Directors due to various disputes and pending legal matter before Hon'bleNational Company Law Tribunal (NCLT) as explained in the notes. These RPTs are not enteredin the Register maintained under Section 189 of the Act. As such the Company is yet tocomply with sections 188 and 189 of the Act and Regulation 23 of SEBI (Listing Obligationsand Disclosures Requirements) Regulations 2015.

4. The ultimate outcome of the matters specified in paras 1-3 above cannot presently bedetermined and its consequential impact on these financial statements cannot beascertained.

We conducted our audit in accordance with the Standards on Auditing (SAs) specifiedunder section 143(10) of the Act. Our responsibilities under those Standards are furtherdescribed in the Auditor's Responsibilities for the Audit of the Financial Statementssection of our report. We are independent of the Company in accordance with the Code ofEthics issued by the Institute of Chartered Accountants of India together with theindependence requirements that are relevant to our audit of the financial statements underthe provisions of the Act and the rules thereunder and we have fulfilled our otherethical responsibilities in accordance with these requirements and the Code of Ethics. Webelieve that the audit evidence we have obtained is sufficient and appropriate to providea basis for our opinion.

Key Audit Matters

Key audit matters are those matters that in our professional judgement were of mostsignificance in our audit of 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.

S. No. Key Audit Matter Auditor's Response
1 One of the Joint Managing Directors filed a petition before the Hon'ble National Company Law Tribunal New Delhi ("NCLT") against the Company and others under Sections 397/398 402 403 and 237 of the Companies Act 1956 and Section 219 & Section 220 of the Companies Act 2013 which is explained in the notes to financial statements. The Petition is currently pending adjudication. (Refer Note No. 39 to the financial statements) We have studied and analysed the petition pending with Hon'ble National Company Law Tribunal and other related documents. Due to various non-compliances in the earlier years the Hon'ble NCLT inducted a new independent director as chairman of the company.

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

The Company's Board of Directors is responsible for preparation of the otherinformation. The other information comprises the information included in Annual Reportbut does not include the financial statements and our auditor's report thereon.

Our opinion on financial statement does not cover the other information and we do notexpress any form of assurance conclusion thereon.

In connection with our audit of the financial statements our responsibility is to readthe other information and in doing so consider whether the other information ismaterially inconsistent with the financial statements or our knowledge obtained during thecourse of our audit or otherwise appears to be materially misstated. If based on thework we have performed we conclude that there is material misstatement of this otherinformation we are required to report that fact. We have nothing to report in thisregard.

Management's responsibility 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 applicable IndAS and other accounting principles generally accepted in India.

This responsibility also includes maintenance of adequate accounting records inaccordance with the provisions of the Act for safeguarding the assets of the Company andfor preventing and detecting frauds and other irregularities; selection and application ofappropriate accounting policies; making judgements 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 the Board of Directors is responsible forassessing the company's ability to continue as going concern disclosing as applicablematters related to going concern and using the going concern basis of accounting unlessthe Board of Directors either intends to liquidate the company or to cease the operationsor has no realistic 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 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 aggregate they couldreasonably be expected to influence the economic decisions of users taken on the basis ofthese financial statements.

As part of an audit in accordance with SAs we exercise professional judgement 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 procedure 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 financial controls 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 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 statement or if such disclosures are inadequate to modify our opinion. Ourconclusions are based on the audit evidence obtained up to the date of our auditor'sreport. However future events or conditions may cause the company to cease to continue asa going concern.

• Evaluate the overall presentation structure and content of the financialstatements including the disclosures and whether the financial statements represent theunderlying transaction and events in a manner that achieves fair presentation.

Materiality is the magnitude of misstatements in the financial statements thatindividually or in aggregate makes it probable that the economic decisions of areasonably knowledgeable user of the financial statements may be influenced. We considerquantitative materiality and qualitative factor in (i) planning the scope of our auditwork and in evaluating the results of our work; and (ii) to evaluate the effect of anyidentified misstatements in the financial statements. We communicate with those chargedwith governance regarding among other matters the planned scope and timing of the auditand significant audit findings including any significant deficiencies in internal controlthat 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 financial statements of thecurrent period and are therefore the key audit matters. We describe these matters in ourauditor's report unless law or regulation precludes public disclosures about the matter orwhen 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 ("the Order")issued by the Central Government in terms of section 143(11) of the Act we give inAnnexure A a statement on the matters specified in paragraphs 3 and 4 of the Order tothe extent applicable.

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) Except for the matters described in the Basis of Qualified Opinion paragraph in ouropinion proper books of accounts as required by law have been kept by the company so faras 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 Flows dealt with by thisreport are in agreement with the books of accounts.

d) In our opinion the aforesaid financial statements comply with the Indian AccountingStandards prescribed under section 133 of the Act read with relevant rules issuedthereunder.

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 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 overfinancial 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 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 on its financialposition in its financial statements.

(ii) The Company has made provision as required under the applicable law or accountingstandards for material foreseeable losses if any on long term contracts includingderivative contracts.

(iii) There is no delay in transferring amounts to the Investor Education andProtection Fund.

For Satinder Goyal & Co.
Chartered Accountants
Firm's Regn. No: 027334N
S. K. Goyal
(Partner)
Date: 19th July 2020 Membership No.: 084613
Place: New Delhi UDIN No: 20084613AAAAAO1718

ANNEXURE "A" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 1 under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date on the financial statements of U.P. Hotels Limited for the year ended 31st March 2020)

(i) (a) The Company is maintaining proper records showing full particulars includingQuantitative details and situation of its fixed assets.

(b) According to the explanation and information given to us the Company has a regularprogram of physical verification of its fixed assets. In our opinion the frequency ofphysical verification is reasonable having regard to the size and the nature of itsassets. As informed to us the discrepancies noticed on such verification were notmaterial and have been properly dealt with in the books of accounts.

(c) According to the information and explanations given to us and on the basis of ourexamination of the books of accounts the title deeds of immovable property are held inthe name of the Company.

(ii) As explained to us the inventories were physically verified during the year bythe Management at reasonable intervals and no material discrepancies were noticed onphysical verification. The discrepancies noticed on physical verification of inventory ascompared to books of accounts were not material.

(iii) During the year the Company has not granted any loans secured or unsecured toCompanies firms or other parties covered in the Register maintained under Section 189 ofthe Act. Accordingly paragraph 3 (iii) of the Order is not applicable.

(iv) According to the information and explanations given to us in respect ofguarantee security loans and investments made by the Company the provisions of section185 and 186 of the Act have been complied with.

(v) The Company has not accepted any deposits from the public. As such requirement ofclause (v) of paragraph 3 of the aforesaid order is not applicable.

(vi) The Central Government has not prescribed the maintenance of cost records undersection 148(1) of the Act in respect of services carried out by the Company.

(vii) a) According to the information and explanations given to us and on the basis ofour examination of the records of the company during the year the company is regular indepositing undisputed statutory dues including provident fund investor education andprotection fund employees' state insurance income tax service tax duty of customvalue added tax goods and services tax (GST) cess and any other applicable statutorydues to the appropriate authorities.

According to information and explanations given to us there are no undisputed amountpayable in respect of provident fund investor education & protection fund incometax employees state insurance wealth tax sales tax custom duty service tax exciseduty cess and other statutory dues which were outstanding at the year-end for period ofmore than six months from the date they become payable.

b) According to the records and information and explanation given to us there are nodues in respect of Income tax Sales tax VAT Service-tax Custom duty cess outstandingas at March 312020 due to any dispute.

(viii) As per books and records maintained by the Company and according to theinformation and explanations given to us there were no defaults in making payments tobanks/financial institutions. The Company has no debenture holder and loan fromgovernment.

(ix) The Company has not raised moneys by way of initial public offer or further publicoffer (including debts instruments) during the year. However term loan raised during theyear are applied for the purpose for which it was raised.

(x) We have neither come across any instance of fraud on or by the Company nor have webeen informed of any such case by the Management.

(xi) According to the information and explanations given 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) In our opinion and according to the information and explanations given to usall transactions with the related parties are not in compliance with Section 177 and 188of the Act. The details of such transactions have however been disclosed in the financialstatements as required by the applicable standards and related party transactions are alsonot recorded in the register under Section 189 of the Act. (Refer Note 30 and 41(c) to thefinancial statements)

(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) In our opinion and according to the information and explanations given to us theCompany has not entered into any non-cash transactions with directors or persons connectedwith him. Accordingly paragraph 3 (xv) of the 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 Satinder Goyal & Co.
Chartered Accountants
Firm's Regn. No: 027334N
S. K. Goyal
(Partner)
Date: 19th July 2020 Membership No.: 084613
Place: New Delhi UDIN No: 20084613AAAAAO1718

ANNEXURE "B" TO THE INDEPENDENT AUDITOR'S REPORT

(Referred to in paragraph 2(f) under the heading "Report on Other Legal andRegulatory Requirements" of our report of even date on the financial statements of U.P. Hotels Limited for the year ended 31st March 2020)

Report on the Internal Financial Controls over Financial Reporting under Clause (i) ofSub-section 3 of Section 143 of the Companies Act 2013 ("the Act")

We have audited the internal financial controls over financial reporting of U. P.Hotels Limited ("the Company") as of March 312020 in conjunction with our auditof the 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 (the "Guidance Note").These responsibilities include the design implementation and maintenance of adequateinternal financial controls that were operating effectively for ensuring the orderly andefficient conduct of its business including adherence to 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 Act.

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 and the Standards on Auditing prescribed under section 143(10) ofthe Act to the extent applicable to an audit of internal financial control. ThoseStandards and the Guidance Note require that we comply with ethical requirements and planand perform the audit to obtain reasonable assurance about whether adequate internalfinancial controls over financial reporting was established and maintained and if suchcontrols 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 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 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.

Limitations of Internal Financial Controls over Financial Reporting Because of theinherent limitations of internal financial controls over financial reporting includingthe possibility of collusion or improper management override of controls materialmisstatements due to error or fraud may occur and not be detected. Also projections ofany evaluation of the internal financial controls over financial reporting to futureperiods are subject to the risk that the internal financial control over financialreporting may become inadequate because of changes in conditions or that the degree ofcompliance 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 March 312020 based on theinternal control over financial reporting criteria established by the Company consideringthe essential components of internal control stated in the Guidance Note.

For Satinder Goyal & Co.
Chartered Accountants
Firm's Regn. No: 027334N
S. K. Goyal
(Partner)
Date: 19th July 2020 Membership No.: 084613
Place: New Delhi UDIN No: 20084613AAAAAO1718

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