To The Members of ECO HOTELS AND RESORTS LIMITED (Formally known as Sharad Fibres and
Yarn Processors Limited)
Report on the Audit of the Financial Statements
Opinion
I have audited the accompanying financial statements of Eco Hotels and Resorts Limited
("the Company"), which comprise the Balance Sheet as at 31st March
2023, and the Statement of Profit and Loss (including Other Comprehensive Income), the
Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a
summary of significant accounting policies and other explanatory information (hereinafter
referred to as "the financial statements"). In my opinion and to the best of my
information and according to the explanations given to me, the aforesaid financial
statements give the information required by the Companies Act, 2013 ("the Act")
in the manner so required and give a true and fair view in conformity with the Indian
Accounting Standards prescribed under section 133 of the Act read with the Companies
(Indian Accounting Standards) Rules, 2015, as amended, ("Ind AS") and other
accounting principles generally accepted in India, of the state of affairs of the Company
as at 31
March 2023, its loss including total comprehensive loss, its cash flows and the changes
in equity for the year ended as on that date.
Basis for Opinion
I have conducted the audit of the Financial Statements in accordance with the Standards
on Auditing (SAs), as specified under Section 143(10) of the Act. My responsibility under
those Standards are further described in the
Auditors Responsibility for the Audit of the Financial Statements section of my
report. I am independent of the
Company in accordance with the Code of Ethics issued by the Institute of Chartered
Accountants of India (ICAI) together with the ethical requirements that are relevant to my
audit of the financial statements under the provisions of the Act and the Rules
thereunder, and I have fulfilled my other ethical responsibilities in accordance with
these requirements and the ICAIs Code of Ethics. I believe that the audit evidence
obtained by me is sufficient and appropriate to provide a basis for my audit opinion on
the Financial Statements.
Key Audit Matters
Key audit matters are those matters that, in my professional judgment, were of most
significance in my audit of the financial statements of the current period. I have
determined that there are no key audit matters to communicate in my report.
Information Other than the Financial Statements and Auditors Report Thereon
The Companys Board of Directors is responsible for the other information. The other
information comprises the information included in the Management Discussion and Analysis,
Boards Report including Annexures to Boards Report, Business Responsibility Report, but
does not include the financial statements and my auditors report thereon.
My opinion on the financial statements does not cover the other information and I do
not express any form of assurance conclusion thereon.
In connection with my audit of the financial statements, my responsibility is to read
the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial statements or my knowledge obtained during the
course of my audit or otherwise appears to be materially misstated.
If, based on the work I have performed, I conclude that there is a material
misstatement of this other information, I am required to report that fact. I have nothing
to report in this regard.
Responsibilities of Management and Those Charged with Governance for the Financial
Statements
The Companys Board of Directors is responsible for the matters stated in section
134(5) of the Act with respect to the preparation of these financial statements that give
a true and fair view of the financial position, financial performance, total comprehensive
income, changes in equity and cash flows of the Company in accordance with the Ind AS and
other accounting principles generally accepted in India. This responsibility also includes
maintenance of adequate accounting records in accordance with the provisions of the Act
for safeguarding the assets of the Company and for preventing and detecting frauds and
other irregularities; selection and application of appropriate accounting policies; making
judgments and estimates that are reasonable and prudent; and design, implementation and
maintenance of adequate internal financial controls, that were operating effectively for
ensuring the accuracy and completeness of the accounting records, relevant to the
preparation and presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the
Companys ability to continue as a going concern, disclosing, as applicable, matters
related to going concern and using the going concern basis of accounting unless the Board
of Directors either intends to liquidate the Company or to cease operations, or has no
realistic alternative but to do so.
The Companys Board of Directors are responsible for overseeing the Companys financial
reporting process.
Auditors Responsibility for the Audit of the Financial Statements
My objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditors report that includes my opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with SAs will always detect a material misstatement when it
exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with SAs, I exercise professional judgment and
maintain professional scepticism throughout the audit. I also:
Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to those
risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for
my opinion. The risk of not detecting a material misstatement resulting from fraud is
higher than for one resulting from error, as fraud may involve collusion, forgery,
intentional omissions, misrepresentations, or the override of internal control.
Obtain an understanding of internal financial controls relevant to the audit in order
to design audit procedures that are appropriate in the circumstances. Under section
143(3)(i) of the Act, I am also responsible for expressing my opinion on whether the
Company has adequate internal financial controls with reference to financial statements in
place and the operating effectiveness of such controls.
Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
Conclude on the appropriateness of managements use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Companys
ability to continue as a going concern. If I conclude that a material uncertainty exists,
I am required to draw attention in my auditors report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify my opinion. My
conclusions are based on the audit evidence obtained up to the date of my audit report.
However, future events or conditions may cause the Company to cease to continue as a going
concern.
Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the underlying
transactions and events in a manner that achieves fair presentation.
Materiality is the magnitude of misstatements in the financial statements that,
individually or in aggregate, makes it probable that the economic decisions of a
reasonably knowledgeable user of the financial statements may be influenced. I consider
quantitative materiality and qualitative factors in (i) planning the scope of my audit
work and in evaluating the results of my work; and (ii) to evaluate the effect of any
identified misstatements in the financial statements.
I communicate with those charged with governance regarding, among other matters, the
planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that I identify during my audit.
I also provide those charged with governance with a statement that I have complied with
relevant ethical requirements regarding independence, and to communicate with them all
relationships and other matters that may reasonably be thought to bear on my independence,
and where applicable, related safeguards.
Report on Other Legal and Regulatory Requirements
1. As required by Section 143(3) of the Act, based on my audit I report, to the extent
applicable that:
a) I have sought and obtained all the information and explanations which to the best of
my knowledge and belief were necessary for the purposes of my audit.
b) In my opinion, proper books of account as required by law have been kept by the
Company so far as it appears from my examination of those books;
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive
Loss, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report
are in agreement with the books of account.
d) In my opinion, the aforesaid financial statements comply with the Indian Accounting
Standards prescribed under section 133 of the Act, except Ind AS 19 Retirement Benefits.
e) On the basis of the written representations received from the directors as on March
31, 2023 taken on record by the Board of Directors, none of the directors is disqualified
as on March 31, 2023 from being appointed as a director in terms of Section 164 (2) of the
Act. f) With respect to the adequacy of the internal financial controls with reference to
financial statements of the
Company and the operating effectiveness of such controls, refer to my separate Report
in "Annexure A". My report expresses an unmodified opinion on the
adequacy and operating effectiveness of the Companys internal financial controls with
reference to financial statements.
g) With respect to the other matters to be included in the Auditors Report in
accordance with the requirements of section 197(16) of the Act, as amended, in my opinion
and to the best of my information and according to the explanations given to me, the
remuneration paid by the Company to its directors during the year is in accordance with
the provisions of section 197 of the Act.
h) With respect to the other matters to be included in the Auditors Report in
accordance with Rule 11 of the
Companies (Audit and Auditors) Rules, 2014, as amended in my opinion and to the best of
my information and according to the explanations given to m i. The Company does not have
any pending litigations which would impact its financial position.
ii. The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses.
iii. There were no amounts which were required to be transferred to the Investor
Education and
Protection Fund by the Company.
iv. (a) The Management has represented that, to the best of its knowledge and belief,
as disclosed in the other notes to the financial statements, no funds have been advanced
or loaned or invested (either from borrowed funds or share premium or any other sources or
kind of funds) by the Company to or in any other person(s) or entity(ies), including
foreign entities ("Intermediaries"), with the understanding, whether recorded in
writing or otherwise, that the Intermediary shall, directly or indirectly lend or invest
in other persons or entities identified in any manner whatsoever by or on behalf of the
Company
("Ultimate Beneficiaries") or provide any guarantee, security or the like on
behalf of the Ultimate
Beneficiaries.
(b) The Management has represented, that, to the best of its knowledge and belief, as
disclosed in the
Other note to the financial statements, no funds have been received by the Company from
any person(s) or entity(ies), including foreign entities ("Funding Parties"),
with the understanding, whether recorded in writing or otherwise that the Company shall,
directly or indirectly, lend or invest in other persons or entities identified in any
manner whatsoever by or on behalf of the Funding Party ("Ultimate
Beneficiaries") or provide any guarantee, security or the like on behalf of the
Ultimate Beneficiaries.
(c) Based on the audit procedures performed that have been considered reasonable and
appropriate in the circumstances, nothing has come to my notice that has caused us to
believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided
under (a) and (b) above, contain any material misstatement.
v. The company has not declared or paid any dividend during the year and has not
proposed final dividend for the year.
vi. Proviso to Rule 3(1) of the Companies (Accounts) Rules, 2014 for maintaining books
of account using accounting software which has a feature of recording audit trail (edit
log) facility is applicable to the Company w.e.f. April 1, 2023, and accordingly,
reporting under Rule 11(g) of Companies (Audit and Auditors) Rules, 2014 is not applicable
for the financial year ended March 31, 2023.
2. As required by the Companies (Auditors Report) Order, 2020 ("the Order")
issued by the Central
Government in terms of Section 143(11) of the Act, I give in "Annexure B"
a statement on the matters specified in paragraphs 3 and 4 of the Order.
|
For J H Bhandari & Co. |
|
Chartered Accountants |
|
Firm Reg. No. 138960W |
| Place: Mumbai |
|
| Date: 29th May, 2023 |
|
| UDIN: 23158795BGTIIV9526 |
|
|
Jinal H. Bhandari |
|
Proprietor |
|
Membership No: 158795 |
Annexure "A" to the Independent Auditors Report
(Referred to in paragraph 1(f) under ‘Report on Other Legal and Regulatory
Requirements section of my report to the Members of Eco Hotels and Resorts Limited
(Formally known as Sharad Fibers and Yarn Processors Limited)
Report on the Internal Financial Controls with reference to financial statements under
Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 ("the
Act")
I have audited the internal financial controls with reference to financial statements
of Eco Hotels and
Resorts Limited ("the Company") as of March 31, 2023 in conjunction with my
audit of the Ind AS financial statements of the Company for the year ended on that date.
Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls with reference to standalone financial statements based on the internal
control with reference to standalone financial statements criteria established by the
Company considering the essential components of internal control stated in the Guidance
Note on Audit of Internal Financial Controls Over Financial Reporting issued by the
Institute of Chartered Accountants of India (ICAI). These responsibilities include the
design, implementation and maintenance of adequate internal financial controls that were
operating effectively for ensuring the orderly and efficient conduct of its business,
including adherence to companys policies, the safeguarding of its assets, the prevention
and detection of frauds and errors, the accuracy and completeness of the accounting
records, and the timely preparation of reliable financial information, as required under
the Companies Act, 2013.
Auditors Responsibility
My responsibility is to express an opinion on the Companys internal financial controls
with reference to financial statements of the Company based on my audit. I conducted my
audit in accordance with the
Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the
"Guidance Note") issued by the Institute of Chartered Accountants of India
(ICAI) and the Standards on Auditing prescribed under section 143(10) of the Companies
Act, 2013, to the extent applicable to an audit of internal financial controls, with
reference to financial statements. Those Standards and the Guidance Note require that I
comply with ethical requirements and plan and perform the audit to obtain reasonable
assurance about whether adequate internal financial controls reference to financial
statements was established and maintained and if such controls operated effectively in all
material respects.
My audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls with reference to financial statements and their operating
effectiveness. My audit of internal financial controls with reference to financial
statements included obtaining an understanding of internal financial controls with
reference to financial statements, assessing the risk that a material weakness exists, and
testing and evaluating the design and operating effectiveness of internal control based on
the assessed risk. The procedures selected depend on the auditors judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due
to fraud or error. I believe that the audit evidence I have obtained is sufficient and
appropriate to provide a basis for my audit opinion on the Companys internal financial
controls with reference to financial statements.
Meaning of Internal Financial Controls with reference to financial statements
A companys internal financial control with reference to financial statements is a
process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance
with generally accepted accounting principles. A companys internal financial control with
reference to financial statements includes those policies and procedures that (1) pertain
to the maintenance of records that, in reasonable detail, accurately and fairly reflect
the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial
statements in accordance with generally accepted accounting principles, and that receipts
and expenditures of the company are being made only in accordance with authorizations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorized acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.
Inherent Limitations of Internal Financial Controls with reference to financial
statements
Because of the inherent limitations of internal financial controls with reference to
financial statements, including the possibility of collusion or improper management
override of controls, material misstatements due to error or fraud may occur and not be
detected. Also, projections of any evaluation of the internal financial controls with
reference to financial statements to future, periods are subject to the risk that the
internal financial control with reference to financial statements may become inadequate
because of changes in conditions, or that the degree of compliance with the policies or
procedures may deteriorate.
Opinion
In my opinion, to the best of my information and according to the explanations given to
me, the Company has, in all material respects, an adequate internal financial controls
with reference to financial statements and such internal financial controls with reference
to financial statements were operating effectively as at March 31, 2023, based on the
criteria for internal financial control with reference to financial statements established
by the Company considering the essential components of internal control stated in the
Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by
the Institute of Chartered Accountants of India (ICAI).
For J H Bhandari & Co. |
| Chartered Accountants |
| Firm Reg. No. 138960W |
Annexure B to the Independent Auditors Report
(Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory
Requirements section of my report of even date)
In terms of the information and explanations sought by me and given by the Company and
the books of account and records examined by me in the normal course of audit and to the
best of my knowledge and belief, I state that:
i) (a) (A) The Company does not have any Property, Plant and Equipment and hence
reporting under clause (i)(a)(A) of paragraph 3 of the Order is not applicable. (B) The
Company does not have any intangible assets and hence reporting under clause (i)(a)(B) of
paragraph 3 of the Order is not applicable.
(b) The Company does not have any Property, Plant and Equipment and hence reporting
under clause (i)(b) of paragraph 3 of the Order is not applicable.
(c) The Company does not have any immovable properties, (other than immovable
properties where the Company is the lessee and the lease agreements are duly executed in
favour of the Company) and hence reporting under clause (i)(c) of paragraph 3 of the Order
is not applicable.
(d) The Company does not have any Property, Plant and Equipment and intangible assets;
hence reporting under clause (i)(d) of paragraph 3 of the Order is not applicable.
(e) No proceedings have been initiated during the year or are pending against the
Company as at March 31, 2023 for holding any benami property under the Benami Transactions
(Prohibition) Act, 1988 (as amended in 2016) and rules made thereunder.
ii) (a) The Company does not have any inventory and hence reporting clause ii (a)
of paragraph 3 of the Order is not applicable.
(b) According to the information and explanations given to me, the company has not been
sanctioned any working capital limit from banks or financial institutions on the basis of
security of current assets at any point of time during the year hence reporting under
clause (ii)(b) of paragraph 3 of the Order is not applicable.
iii) The Company has not made any investments, provided any guarantee or security
or granted any loans or advances in the nature of loans, secured or unsecured to
companies, firms, limited liability partnerships or any other parties during the year, and
hence clause (iii)(a) to (iii)(f) of paragraph 3 of the Order is not applicable.
iv) The Company has not granted any loans, made investments, provided guarantees or
securities and clause (iv) of paragraph 3 of the Order is not applicable.
v) The Company has not accepted any deposit or amount which is deemed to be
deposit.
Hence, reporting under clause (v) of paragraph 3 of the Order is not applicable.
vi) The maintenance of cost records as specified by the Central Government under
section 148(1) of the Companies Act, 2013 for the business activities carried out by the
Company is not applicable to the Company. Thus, reporting under clause (vi) of paragraph 3
of the order of is not applicable to the Company.
vii) In respect of statutory dues:
(a) Undisputed statutory dues, including Goods and Service tax, Provident Fund,
Employees State
Insurance, Income-tax, duty of Custom, cess and other material statutory dues
applicable to the Company have generally been regularly deposited by it with the
appropriate authorities though there has been a delay in respect of remittance of tax
deducted at source dues. There were no undisputed amounts payable in respect of Goods and
Services tax, Provident Fund,
Employees State Insurance, Income Tax, Customs Duty, Cess and other material statutory
dues in arrears as at March 31, 2023, for a period of more than six months from the date
they became payable.
(b) There are no statutory dues referred in sub-clause (a) above which have not been
deposited on account of disputes as on March 31, 2023.
(viii) There were no transactions relating to previously unrecorded income that
were surrendered or disclosed as income in the tax assessments under the Income Tax Act,
1961 (43 of 1961) during the year.
(ix) (a) In my opinion, the Company has not defaulted in the repayment of loans or
other borrowings or in the payment of interest thereon to any lender during the year.
(b) The Company has not been declared wilful defaulter by any bank or financial
institution or government or any government authority.
(c) The Company has not taken any term loan during the year and there are no unutilised
term loans at the beginning of the year; hence reporting under clause (ix)(c) of paragraph
3 of the Order is not applicable.
(d) On an overall examination of the financial statements of the Company, funds raised
on short-term basis have, prima facie, not been used during the year for long term
purposes by the Company.
(e) The company does not hold any investment in any subsidiary, associates, or joint
venture during the year ended March 31, 2023. Hence clause (ix)(e) of paragraph 3 of the
Order is not applicable.
(f) The company does not hold any investment in any subsidiary, associates or joint
venture during the year ended March 31, 2023. Hence clause (ix)(f) of paragraph 3 of the
Order is not applicable.
(x) (a) The Company has not raised moneys by way of initial public offer or further
public offer (including debt instruments) during the year and hence reporting under clause
(x)(a) of paragraph 3 of the Order is not applicable.
(b) During the year, the Company has done preferential allotment of shares to the
shareholders of Eco Hotels India Private Limited. However, transfer of shares was not
completed as at the year end and hence reporting under clause (x)(b) of paragraph 3 the
Order is not applicable.
(ix) (a) To the best of my knowledge, no fraud by the Company and no material fraud
on the Company has been noticed or reported during the year.
(b) To the best of my knowledge, no report under subsection (12) of section 143 of
the Companies Act has been filed in Form ADT-4 as prescribed under rule 13 of Companies
(Audit and Auditors) Rules, 2014 with the Central Government, during the year and upto the
date of this report.
(c) As represented to us by the Management, there were no whistle blower complaints
received by the Company during the year.
(xii) The Company is not a Nidhi Company and hence reporting under clause (xii) of
paragraph 3 of the Order is not applicable.
(xiii) In my opinion, the Company is in compliance with Section 177 and 188 of the
Companies Act, where applicable, for all transactions with the related parties and the
details of related party transactions have been disclosed in the financial statements etc
as required by the applicable accounting standards.
(xiv) (a) Based on information and explanations provided to me and my audit
procedures, in my opinion, the Company has an internal audit system commensurate with the
size and nature of its business.
(b) In November 2022, there has been a change in the Management of the company and new
CEO and CFO have joined in December 2022 and January 2023 respectively. It was informed to
us by the management that Internal Audit is under progress and will be completed by June
2023. Thus, we are unable to obtain on timely basis any of the Internal audit reports of
the Company for the period under audit and hence the same is not considered.
(xv) In my opinion and according to the information and explanations given to us,
the Company has not entered into any non-cash transactions with its directors or persons
connected to its directors and hence, provisions of Section 192 of the Act are not
applicable to the Company.
(xvi) (a) The Company is not required to be registered under section 45-IA of the
Reserve Bank of India Act, 1934 and hence, reporting under clause (xvi)(a), (b) and (c) of
paragraph 3 of the Order is not applicable.
(b) The Group does not have any Core Investment Company (CIC) as part of the group and
accordingly reporting under clause (xvi)(d) of paragraph 3 of the Order is not applicable.
(xvii) The company has incurred cash losses of Rs. 1,82,05,932/- in the current
year and of Rs. 40,02,185/- in the immediately preceding financial year.
(xviii) There has been no resignation of the statutory auditors of the Company
during the year and hence reporting under clause (xviii) of paragraph 3 of the Order is
not applicable.
(xix) According to the information and explanations given to me and on the basis of
the financial ratios, ageing and expected dates of realization of financial assets and
payment of financial liabilities, other information accompanying the financial statements
and my knowledge of the Board of Directors and management plans and based on my
examination of the evidence supporting the assumptions, nothing has come to my attention,
which causes me to believe that any material uncertainty exists as on the date of the
audit report indicating that company is not capable of meeting its liabilities existing at
the date of balance sheet as and when they fall due within a period of one year from the
balance sheet date. I, however, state that this is not an assurance as to the future
viability of the company. I further state that my reporting is based on the facts up to
the date of the audit report and I neither give any guarantee nor any assurance that all
liabilities falling due within a period of one year from the balance sheet date, will get
discharged by the company as and when they fall due.
(xx) In my opinion and according to the information and explanations given to me,
the Company does not fulfil the thresholds u/s section 135 of Companies Act, 2013 and
hence, the Company is not liable for any payments towards Corporate Social Responsibility.
Accordingly, clause (xx) of paragraph 3 of the Order is not applicable.
(xxi) The Company is not required to prepare Consolidated Financial Statement as
per Ind AS 110 as the Company does not control any other entity. Hence, clause (xxi) of
paragraph 3 of the Order is not applicable.
|
For JH Bhandari & Co. |
|
Chartered Accountants |
|
Firm Reg. No. 138960W |
| Place: Mumbai |
|
| Date: 29th May, 2023 |
|
| UDIN: 23158795BGTIIV9526 |
|
|
Jinal H. Bhandari |
|
Proprietor |
|
Membership No: 158795 |
+91-9892691696
