To,
The Members of Tulip Star Hotels Limited
Report on Audit of Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of Tulip Star Hotels
Limited (the "Company"), which comprise the Balance Sheet as at March 31, 2019,
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
the significant accounting policies and other explanatory information. In our opinion and
to the best of our information and according to the explanations given to us, the
aforesaid standalone financial statements give the information required by the Act in the
manner so required and give a true and fair view in conformity with the accounting
principles generally accepted in India, of the state of affairs of the Company as at March
31, 2019, its Loss, 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) specified
under section 143(10) of the Companies Act, 2013. Our responsibilities under those
Standards are further described in the Auditors Responsibilities for the Audit of the
Financial Statements section of our report. We are independent of the Company in
accordance with the Code of Ethics issued by the Institute of Chartered Accountants of
India together with the ethical requirements that are relevant to our audit of the
financial statements under the provisions of the Companies Act, 2013 and the Rules there
under, and we have fulfilled our other ethical responsibilities in accordance with these
requirements and the Code of Ethics. We believe that the audit evidence we have obtained
is sufficient and appropriate to provide a basis for our opinion.
Emphasis of matter:
Attention is invited to note number 18, note number 19 and note number 20 of notes
forming part of accounts regarding the quality of the Companys investment in an investee
company as well as recoverability of its interest free loan in the said company. the
Management is of the opinion that notwithstanding the ongoing financial and legal issues
of the investee company, taking into account the present value of the investee companys
hotel property vis--vis its aggregate liabilities, there is no permanent diminution in
the book value of the Companys investments nor is there a threat to recovery of interest
free loan in the investee company in the long run. Our opinion on the financial statements
is not qualified in respect of this matter.
Key Audit Matter
Key audit matters are those matters that, in our professional judgment, were of most
significance in our audit of the financial statements of the current period. ese matters
were addressed in the context of our audit of the financial statements as a whole, and in
forming our opinion thereon, and we do not provide a separate opinion on these matters.
Managements Responsibility for the Standalone Financial Statements
the Companys Board of Directors is responsible for the matters stated in section
134(5) of the Companies Act, 2013 ("the Act") with respect to the preparation of
these standalone financial statements that give a true and fair view of the financial
position, financial performance, changes in equity and cash flows of the Company in
accordance with the accounting principles generally accepted in India, including the
accounting Standards specified under section 133 of the Act. is responsibility also
includes maintenance of adequate accounting records in accordance with the provisions of
the Act for safeguarding of 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 statement 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 management
either intends to liquidate the Company or to cease operations, or has no realistic
alternative but to do so. ose Board of Directors are also responsible for overseeing the
Companys financial reporting process.
Auditors Responsibilities for the Audit of the Financial Statements
Our 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 our 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, we exercise professional judgment and
maintain professional skepticism throughout the audit. We 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 our 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 control relevant to the audit in order to
design 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 whether
the company has adequate internal financial controls system 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 we conclude that a material uncertainty exists,
we are required to draw attention in our auditors report to the related disclosures in
the 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 auditors
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.
We 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 defficiencies in internal control that we identify during our audit. We also
provide those charged with governance with a statement that we 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 our
independence, and where applicable, related safeguards. From the matters communicated with
those charged with governance, we determine those matters that were of most significance
in the audit of the financial statements of the current period and are therefore the key
audit matters. We describe these matters in our auditors report unless law or regulation
precludes public disclosure about the matter or when, in extremely rare circumstances, we
determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditors Report) Order, 2016 ("the Order"),
issued by the Central Government of India in terms of sub-section (11) of section 143 of
the Companies Act, 2013, we give in the Annexure a statement on the matters specified in
paragraphs 3 and 4 of the Order, to the extent applicable.
2. 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 best
of 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 the
Company so far as it appears from our examination of those books.
c) the Balance Sheet, the Statement of Profit and Loss, and the Cash Flow Statement
dealt with by this Report are in agreement with the books of account.
d) In our opinion, the aforesaid standalone financial statements comply with the
Accounting Standards 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 31st
March, 2019 taken on record by the Board of Directors, none of the directors is
disqualified as on 31st March, 2019 from being appointed as a director in terms of Section
164 (2) of the Act.
f) According to the information and explanation given to us, the Company has not
established its internal financial control over financial reporting on criteria based on
or considering the essential components of internal controls stated in the Guidance Note
on Audit of Internal Financial Controls over financial reporting issued by the Institute
of Chartered Accountants of India. Consequently, we are unable to obtain sufficient
appropriate audit evidence to provide basis for our opinion whether the Company had
adequate internal financial controls over financial reporting and whether such internal
financial controls were operating effectively as at March 31st, 2019.
We have considered the disclaimer reported above in determining the nature, timing, and
extent of audit tests applied in our audit of the financial statements of the Company, and
the disclaimer does not affect our opinion on the financial statements of the Company.
g) 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
our opinion and 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 financial
position in its financial statements – Refer note number 21 of notes forming part of
accounts;
ii. the Company did not have any long term contracts including derivative contracts
that require provision under any law or accounting standards for which there were any
material foreseeable losses.
iii. ere was no amount to be transferred to the Investor Education and Protection Fund
by the Company.
|
For K A M G & Associates |
|
Chartered Accountants |
|
Firm Reg. No. 311027E |
|
Arpit Shah |
|
Partner |
| Place: Mumbai |
Membership No. 180949 |
| Date: May 29, 2019 |
|
ANNEXURE TO THE INDEPENDENT AUDITORS REPORT
the Annexure referred to in our Independent Auditors Report to the members of the
Company on the financial statements for the year ended 31 March 2019, we report that:
i. the Company does not have any Fixed Assets.
ii. the Company is a service company, primarily rendering hotel management services.
Accordingly, it does not hold any physical inventories. us, paragraph 3(ii) of the Order
is not applicable. iii. the following are the particulars of unsecured loans granted by
the Company to companies firms or other parties covered in the register maintained under
section 189 of the Companies Act, 2013 (‘the Act).
Details of loans granted:
| Sr.No. |
Name of the Party |
Relationship |
Amount (Rs. ) |
Year-End Balance (Rs. ) |
| 1. |
V Hotels Ltd |
Common Directors |
Nil |
37,00,00,000 |
| 2. |
Banzai Estates Private Limited |
Common Directors |
Nil |
1,15,00,000 |
the above loans are interest free as such these loans are prejudicial to the interest
of the Company.
We are informed that the terms of arrangements do not stipulate any repayment schedule.
Accordingly, paragraph 3 (iii) (b) & 3 (iii) (c) of the Order is not applicable to the
Company in respect of repayment of the principal amount. iv.
iv. In our opinion and according to the information and explanations given to us, the
company has not complied with the provisions of section 185 and 186 of the Act, with
respect to the loans and investments made to the following parties:
Non compliance with the provisions of section 185 and 186 of the Act
| Party |
Nature of Transaction |
Amount (Rs. ) |
| V Hotels Ltd |
Inter-Corporate Deposit |
37,00,00,000 |
| Non compliance with the provisions of section 185 and 186 of the Act |
|
| Party |
Nature of Transaction |
Amount (Rs. ) |
| Banzai Estates Private Limited |
Inter-Corporate Deposit |
1,15,00,000 |
| V Hotels Ltd |
Investment in Equity Shares |
21,99,82,000 |
| V Hotels Ltd |
Investment in Preference Shares |
2,50,000 |
v. the Company has not accepted any deposits from the public.
vi. the Central Government has not prescribed the maintenance of cost records under
section 148 (1) of the Act, for any of the services rendered by the Company..
vii. (a) According to the information and explanations given to us and on the basis of
our examination of the records of the Company, amounts deducted/ accrued in the books of
account in respect of undisputed statutory dues including provident fund and employees
state insurance and other material statutory dues (barring tax deducted at source and
service tax) have been regularly deposited during the year by the Company with the
appropriate authorities. As explained to us, the Company did not have any dues on account
of sales tax, wealth tax, duty of customs, value added tax, cess and duty of excise.
According to the information and explanations given to us, the following undisputed
amounts payable in respect of income tax and service tax were in arrears as at 31 March
2019 for a period of more than six months from the date they became payable.
| Particulars |
Amount (Rs.) |
| Fringe Benefit Tax |
4,75,000 |
| Service Tax |
13,63,126 |
| Tax Deducted at Source (TDS) |
2,01,03,180 |
| ESIC |
6,815 |
| Provident Fund |
50,557 |
(b) According to the information and explanations given to us, the following dues of
income tax, have not been deposited by the Company on account of disputes:
| Nature of Disputed Dues |
Amount (Rs. ) In Lacs |
Forum where dispute is pending |
| Penalty U/s 221(1) of the Income Tax Act, 1961 for assessment year 2007-08 |
40.34 |
Honble Income Tax Tribunal, New Delhi |
viii. the Company did not have any outstanding dues to financial institutions, banks or
Debenture holders during the year. ix. the company did not raise any money by way of
initial public offer or further public offer (including debt instruments) and term loans
during the year. Accordingly paragraph 3 (ix) of the order is not applicable.
x. According to the information and explanation given to us, no material fraud by the
Company or on the Company by its officers or employees has been noticed or reported during
the course of our audit. xi. According to the information and explanations give to us and
based on our examination of the records of the Company, the Company has not paid/provided
for any managerial remuneration. xii. In our opinion and according to the information and
explanations given to us, the Company is not a nidhi company. Accordingly, paragraph 3
(xii) of the Order is not applicable.
xiii. According to the information and explanations given to us and based on our
examination of the records of the Company, transactions with the related parties are in
compliance with sections 177 and 188 of the Act where applicable and details of such
transactions have been disclosed in the financial statements as required by the applicable
accounting standards.
xiv. According to the information and explanations give to us and based on our
examination of the records of the Company, the Company has not made any preferential
allotment or private placement of shares or fully or partly convertible debentures during
the year.
xv. According to the information and explanations given to us and based on our
examination of the records of the Company, the Company has not entered into non-cash
transactions with directors or persons connected with 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 Reserve
Bank of India.
|
For K A M G & Associates |
|
Chartered Accountants |
|
Firm Reg. No. 311027E |
|
Arpit Shah |
|
Partner |
| Place: Mumbai |
Membership No. 180949 |
| Date: May 29, 2019 |
|
+91-9892691696
