To the Members of
BALAJI HOTELS & ENTERPRISES LIMITED
I. Qualified Opinion:
We have audited the standalone financial statements of Balaji Hotels & Enterprises
Limited (The Company,)which compromises the Balance Sheet as at 31-03-2019,the statement
of Profit and Loss, Statement of Change in Equity and Statement of Cash flow for the year
ended on that date, and a summary of significant accounting policies and other explanatory
information (financial statements).
In our opinion, and to the best of our information and according to the explanations
given to us except for the effects of the matters as described in ‘Basis for
Qualified Opinion paragraph above, the accompanying standalone Ind AS financial
statements give the information required by the Companies Act 2013 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, total comprehensive income, its cash flows and the changes in equity for the
year ended on that date.
II. Basis for Qualified Opinion:
The Company has borrowed Rs. 15.12 crores at 12% interest per annum. For its failure to
service the loan, the creditor has filed suit for recovery. The Company has not provided
for the annual interest of Rs. 1.81 Crores and the accumulated interest of Rs. 29.87
Crores.
Non Provision for such an enforceable liability is against fundamental accounting
principle of accrual and prudence. An amount of Rs. 29.87 Crores would have been required
to increase the unsecured creditors and accordingly the unsecured creditors would have
increased by Rs.29.87 Crores, the loss for the year would have been higher by Rs. 1.81
Crores and the Share holders funds would have decreased by Rs. 29.87 Crores.
In the absence of Bank Statements / Confirmation of Balances of the Current Account
with Tamil Nadu Mercantile Bank (A/c No. 107150050315266),Vijaya Bank (A/c
No303900300000068.), Vijaya Bank (A/c No303900300000069, Vijaya Bank (A/c
No303900300000088) we are unable to comment on the transactions if any, effected through
these accounts.
III. Key Audit Matters:
Key audit matter are those matters that, in our professional judgment, were of most
significant in our audit of standalone financial statement of current period. These
matters were addressed in the context of our audit of standalone statements as a whole and
in forming our opinion there on, we do not provide a separate opinion on these matters.
IV. Information Other than the Standalone Financial Statements and Auditors Report
Thereon:
The Companys Board of Directors is responsible for the preparation of the other
information. The other information comprises the information included in the Management
Discussion and Analysis, Boards Report including Annexure to Boards Report, Business
Responsibility Report, Corporate Governance and Shareholders Information, but does not
include the standalone financial statements and our auditors report thereon.
Our opinion on the standalone financial statements does not cover the other information
and we do not express any form of assurance conclusion thereon.
In connection with our audit of the standalone financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other information
is materially inconsistent with the standalone financial statements or our knowledge
obtained during the course of our audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is no material
misstatement of this other information. We have nothing to report in this regard.
V. Responsibility of the Management for the 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 Ind AS financial statements that give a true and fair view of the
financial position, financial performance including other comprehensive income cash flows
and changes in equity of the Company in accordance with the accounting principles
generally accepted in India, including the Indian Accounting Standards (Ind AS) prescribed
under section 133 of the Act.
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 standalone Ind
AS financial statements that give a true and fair view and are free from material
misstatement, whether due to fraud or error.
VI. Auditors Responsibility
Our objectives are to obtain reasonable assurance about whether the standalone
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 standalone financial statements.
As part of an audit in accordance with SAs, we exercise professional judgment and
maintain professional scepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the standalone
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 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, 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 standalone 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 standalone
financial statements, including the disclosures, and whether the standalone financial
statements represent the underlying transactions and events in a manner that achieves fair
presentation.
Materiality is the magnitude of misstatements in the standalone 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. We consider
quantitative materiality and qualitative factors in (i) planning the scope of our audit
work and in evaluating the results of our work; and (ii) to evaluate the effect of any
identified misstatements in the financial statements.
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 deficiencies 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.
VII. 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 Section 143(11) of the
Act, we give in the Annexure-A, a statement on the matters specified in paragraph 3 and 4
of the Order.
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 purpose 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) Except for the effects of the matter described in the Basis for Qualified Opinion
paragraph above, 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.
(d) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive
Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this
Report are in agreement with the relevant books of account.
(e) In our opinion, the aforesaid standalone Ind AS financial statements comply with
the Accounting Standards specified under section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014.
(f) The matter described in the Basis for Qualified Opinion paragraph above, in our
opinion, may have an adverse effect on the functioning of the Company.
(g) On the basis of the written representations received from the directors as on 31st
March, 2018 taken on record by the Board of Directors, none of the directors are
disqualified as on 31st March, 2018 from being appointed as a director in terms of section
164(2) of the Act.
(h) The qualification relating to maintenance of accounts and other matters connected
therewith are as stated in the Basis for Qualified Opinion paragraph.
(i) With respect to the adequacy of internal financial controls over financial
reporting of the Company and the operating effectiveness of such controls, refer to our
separate report in ‘Annexure – B; and
(j) 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, 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 no 19 to Financial statements)
ii) The Company did not have any long-term contracts including derivative contracts for
which there were any material foreseeable losses under the applicable law or accounting
standards.
iii) There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company.
ANNEXURE - A TO THE INDEPENDENT AUDITORS REPORT OF BALAJI HOTELS AND ENTERPRISES
LIMITED
Based on the information and explanations furnished to us and the books and records
examined by us in the normal course of our audit, we report that to the best of our
knowledge and belief:
i. In respect of fixed assets :
a) The company has maintained proper records showing full particulars including
quantitative details and situation of fixed assets.
b) We are informed that during the year, the fixed assets have been physically verified
by the management. In our opinion physical verification has been conducted at reasonable
intervals having regard to the size of the company, nature and value of its assets. No
material discrepancies were noticed on such verification.
c) According to the information and explanation given to us and on the basis of our
examination of records of the Company, the title deeds of immovable properties are held in
the name of the company.
ii. In respect of inventories:
The Company being neither a trading nor a manufacturing concern, holding of inventories
at any point of the year does not arise.
iii. In respect of loans, secured or unsecured, granted to companies, firms or other
parties covered in the register maintained under section 189 of the Companies Act, 2013:
The Company has not granted any loans to any Company, firms or other parties covered in
the register maintained under section 189 of the Companies Act, 2013.
iv. In respect of loans, investments, guarantees, and security to companies, firms or
other parties as per section 185 and 186 of the Companies Act, 2013:
The Company has complied with the provisions of section 185 and 186 of the Act, with
respect to loans and investments made.
v. In respect of deposits:
The Company has not accepted any deposits. Therefore, the provisions of section 73 and
76 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014 with
regard to the deposits accepted from the public and from the members are not applicable to
the Company.
vi. In respect of cost records:
In our opinion and according to the information and explanations given to us, the
requirement for maintenance of cost records pursuant to the Companies (Cost Records and
Audit) Rules, 2014 specified by the Central Government of India under Section 148 of the
Companies Act, 2013 are not applicable to the Company for the year under audit.
vii. In respect of statutory dues:
a) The Company has been generally regular in depositing with appropriate authorities,
undisputed statutory dues including, Provident Fund, Income Tax, Sales Tax,Goods and
Service Tax and other applicable statutory dues during the year.
b) In respect of Income Tax, Sales Tax, Service tax, Customs duty, Excise duty and
Cess, there are no undisputed amounts outstanding as at March 31, 2019 for a period of
more than six months from the date they became payable. (Refer Note No.19)
c) The details of dues of income tax / wealth tax which have not been deposited due to
disputes are as under :
| Period to which the Demand relates (Assessment Year) |
Disputed Tax |
Forum where the dispute is pending |
|
Rs. Lakhs |
|
| 2008-09 (Income tax) |
1981.32 |
Commissioner of Income Tax, (Appeals) Chennai |
| 2009-10 (Income tax) |
3612.08 |
Commissioner of Income Tax, (Appeals) Chennai |
viii. In respect of repayment of loans or borrowing to Banks, Financial Institutions,
Government and Debenture Holders:
The Company has not borrowed from banks or financial institutions and no debentures are
outstanding as at the end of the year.
ix. In respect of utilization of monies raised by way of initial public offer or
further public offer (including debt instruments) and term loans:
The Company has not raised monies by way of initial public offer, further public offer
and term loans during the year.
x. In respect of frauds:
In our opinion and according to the information and explanation given to us, no fraud
on or by the Company has been noticed or reported during the year that causes the
financial statements to be materially misstated.
xi. In respect of managerial remuneration:
The Company has not paid / provided for managerial remuneration and hence the
provisions of section 197 read with schedule – V are not applicable.
xii. In respect of Nidhi Company:
The Company is not a nidhi company and the provisions relating to Net Owned Funds are
not applicable to the Company.
xiii. In respect of transactions with related parties and in compliance with section
177 and 188 of the Companies Act, 2013:
The Company has not entered in to any transactions with related parties and hence the
provisions of Section 177 and 188 of the Companies Act, 2013 are not applicable.
xiv. In respect of preferential allotment or private placement of shares or fully or
partly convertible debentures:
The Company has not made any preferential allotment or private placement of shares or
fully or partly convertible debentures during the year.
xv. In respect of non-cash transactions entered into with directors or persons
connected with him as per the provisions of section 192 of Companies Act, 2013:
The Company has not entered non-cash transactions with directors or persons connected
with him. xvi. In respect of provisions of Sec 45-IA of the Reserve Bank of India Act,
1934: The Company is not required to be registered under Section 45-IA of the Reserve Bank
of India Act, 1934.
ANNEXURE - B TO THE INDEPENDENT AUDITORS REPORT OF BALAJI HOTELS AND ENTERPRISES
LIMITED
[Report on the Internal Financial Controls under Clause (i) of sub-section 3 of Section
143 of the Companies Act, 2013 ("the Act")]
I. We have audited the internal financial controls over financial reporting of
BALAJI HOTELS & ENTERPRISES LTD (the "Company") as of March 31, 2019 in
conjunction with our audit of the financial statements of the Company for the year ended
on that date.
II. Managements Responsibility for Internal Financial Controls
The Companys management is responsible for establishing and maintaining internal
financial controls based on the internal control over financial reporting 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. 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.
III. Auditors Responsibility
Our responsibility is to express an opinion on the Companys internal financial
controls over financial reporting based on our audit. We conducted our audit in accordance
with the Guidance Note on Audit of Internal Financial Controls over Financial Reporting
(the "Guidance Note") and the Standards on Auditing, to the extent applicable to
an audit of internal financial controls, both issued by the Institute of Chartered
Accountants of India. Those Standards and the Guidance Note require that we comply with
ethical requirements and plan and perform the audit to obtain reasonable assurance about
whether adequate internal financial controls over financial reporting was established and
maintained and if such controls operated effectively in all material respects.
Our audit involves performing procedures to obtain audit evidence about the adequacy of
the internal financial controls system over financial reporting and their operating
effectiveness. Our audit of internal financial controls over financial reporting included
obtaining an understanding of internal financial controls over financial reporting,
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 judgement, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud or error.
We believe that the audit evidence we have obtained is sufficient and appropriate to
provide a basis for our audit opinion on the Companys internal financial controls system
over financial reporting.
IV. Meaning of Internal Controls over Financial Reporting
A companys internal financial control over financial reporting 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 over financial
reporting 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 authorisations of
management and directors of the company; and (3) provide reasonable assurance regarding
prevention or timely detection of unauthorised acquisition, use, or disposition of the
companys assets that could have a material effect on the financial statements.
V. Inherent Limitations of Internal Financial Controls over Financial Reporting
Because of the inherent limitations of internal financial controls over financial
reporting, 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 over financial
reporting to future periods are subject to the risk that the internal financial control
over financial reporting may become inadequate because of changes in conditions, or that
the degree of compliance with the policies or procedures may deteriorate.
VI. Opinion
In our opinion, the Company has, in all material respects, an adequate internal
financial controls system over financial reporting and such internal financial controls
over financial reporting were operating effectively as at March 31, 2019, based on the
internal control over financial reporting 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.
For SRISPOORTHI & ASSOCIATES
Chartered Accountants
FRN: 017573S
Srispoorthi P
Proprietor
M No.240795
Place: Chennai
Date : May 27, 2019
+91-9892691696
