EIH Associated Hotels Ltd Directors Report.

To The Members of EIH ASSOCIATED HOTELS LIMITED

REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS

Opinion

We have audited the accompanying financial statements of EIH ASSOCIATED HOTELS LIMITED ("the Company"), which comprise the Balance Sheet as at March 31, 2021, and the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Cash Flows and the Statement of Changes in Equity for the year then ended, and a summary of 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 financial statements give the information required by the Companies Act, 2Cl 3 ("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 March 31, 2021, and its loss, total comprehensive loss, its cashflows and the changes in equity for the year ended on that date.

Basis for Opinion

We conducted our audit of the financial statements in accordance with the Standards on Auditing specified under section 143(10) of the Act (SAs). Our responsibilities under those Standards are further described in the Auditors Responsibility 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 (ICAI) together with the ethical requirements that are relevant to our audit of the financial statements under the previsions of the Act and the Rules made there under, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAIs Cede of Ethics. We believe that the audit evidence obtained by us is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Key Audit Matters

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. These matters were 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. We have determined the matter described below to be the key audit matter to be communicated in our report.

Key Audit Matter Auditors Response
Contingent liabilities [Refer Note l(r), 3B and 40(a) to the financial statements] Principal audit procedures performed:
The Company has tax and other ongoing litigations including matters under dispute which involve significant judgement in determining the likely outcome of tax/legal matters by the management • Obtained an understanding of the Companys processes for evaluating and determining the likely outcome of tax/legal matters.
Tested the design, implementation and operating effectiveness of relevant internal controls relating to the managements evaluation and assessment of tax/legal matters;
There is a risk relating to ongoing tax/legal matters amounting to Rs. 150.55 million which is disclosed in Note 40(a) to the financial statements.
• Obtained managements evaluation and assessment discussed with Companys tax/legal team and circularised confirmations on sample basis, as considered necessary, from the Companys legal counsel/tax consultants for confirming the possible outcome of the outstanding cases related to tax and legal claims;
The amounts involved are significant and application of the accounting standard to determine the amount, if any, to be provided as a liability or disclosed as a contingent liability, is likelihood and/or timing of cash outflows from the business and the pending decisions of the appropriate authorities.
Due to the significant judgement involved in determining the likely outcome of the tax/ legal matters by the management, the above matter has been identified as a key audit matter. • On a sample basis, tested the completeness and accuracy of the underlying data used in the assessment and evaluating the assumptions used by management when determining uncertainty of tax/legal matters and the potential impact of past claims;.
• Assessed the independence, competency and objectivity of the management expert involved;
• For direct and indirect tax matters, we involved our tax specialists who assisted in evaluating the reasonableness of managements assessments based on prevailing law, past decisions from tax authorities, recent developments and new information, as applicable;
• Assessed the related disclosures in the financial statements and their compliance with Ind AS

Information Other than the Financial Statements and Auditors Report Thereon

• The Companys Board of Directors is responsible for the other information. The ether information comprises the information included in the Management Discussion and Analysis, Directors Report including annexures to the Directors Report, Business Responsibility Report, Report on Corporate Governance, but does not include the financial statements and our auditors report thereon.

• Our opinion on the financial statements does net cover the other information and we do not express any form of assurance conclusion thereon

• In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing sc, consider whether the ether information is materially inconsistent with the 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 a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Managements Responsibility 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 including other comprehensive income, cash flows and changes in equity of the Company in accordance with the Ind AS and ether 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 management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those Board of Directors are also responsible for overseeing the Companys financial reporting process.

Auditors Responsibility 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 net 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 emissions, misrepresentations, or the override of internal control.

• Obtain an understanding of internal financial control 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 the 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.

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. 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.

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 cr 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 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 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 sc far as it appears from our examination of these bocks.

c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive Income, the Statement of Cash Flews and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account.

d) In our opinion, the a fore said financial statements comply with the Ind AS specified under section 133 of the Act.

e) On the basis of the written representations received from the directors as on March 31, 2021 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2021 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "ANNEXURE A". Our report expresses an unmodified opinion on the adequacy and operating effectiveness of the Companys internal financial controls over financial reporting.

g) With respect to the ether matters to be included in the Auditors Report in accordance 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 explanations given to us, no remuneration has been paid by the Company to any of its directors. Accordingly, the provisions of section 197 of the Act relating to remuneration to directors are net applicable.

h) With respect to the ether 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 4C (a) to the financial statements;

ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses - Refer note 37 to the financial statements;

iii. There has been no delay in transferring amounts, required to be transferred, to the Investor Education and Protection Fund by the Company - Refer note 46 to the financial statements.

2. As required by the Companies (Auditors Report) Order, 2016 (‘the Order"/"CARO 2016") issued by the Central Government in terms of section 143(11) of the Act, we give in "ANNE XU RE B" a statement on the matters specified in paragraphs 2 and 4 of the Order.

(Referred to in paragraph 1(f) under Report on Other Legal and Regulatory Requirements section of our report of even date)

REPORT ON THE INTERNAL FINANCIAL CONTROLS OVER FINANCIAL REPORTING UNDER CLAUSE (i) OF SUB-SECTION 3 OF SECTION 143 OF THE COM PAN IES ACT, 2013 ("THE ACT")

We have audited the internal financial controls over financial reporting of EIH ASSOCIATED HOTELS LIMITED (‘the Company") as of March 21, 2021 in conjunction with our 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 Board of Directors 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 Contrats 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.

AUDITORS RESPONSIBILITY

Our responsibility is to express an opinion on the Companys internal financial controls over financial reporting of the Company 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") issued by the Institute of Chartered Accountants of India and the Standards on Auditing prescribed under section 143(1C) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls. These 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 ever 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.

MEANING OF INTERNAL FINANCIAL 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 reposting includes those policies and procedures that

(1) pertain to the maintenance of records that, in reasonable detail, accqurately 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.

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.

OPINION

In our opinion, to the best of our information and according to the explanations given to us, 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, 2021, based on the criteria for internal financial control ever financial reporting 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.

"Annexure B" to the independent Auditors Report (Referred to in paragraph 2 under ‘Report on Other Legal and Regulatory Requirements section of our report of even date)

(i) In respect of its property, plant and equipment:

a. The Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment.

b. The property, plant and equipment were physically verified during the year by the Management in accordance with a regular programme of verification which, in our opinion, provides for physical verification of all the property, plant and equipment at reasonable intervals and no material discrepancies were noticed on such verification.

c. According to the information and explanations given to us and the records examined by us and based on the examination of the registered sale deed and conveyance deed provided to us, we report that, the title deeds, comprising all the immovable properties of land and buildings which are freehold, are held in the name of the Company as at the balance sheet date. Immovable properties of land and buildings whose title deeds have been pledged as security for a cash credit facility are held in the name of the Company based on the confirmation directly received by us from lender. The Company does not have any immovable properties of land and building that have been taken on lease and disclosed as property, plant and equipment in the standalone financial statements.

(ii) In our opinion, the inventories were physically verified during the year by the Management at reasonable intervals and no material discrepancies were noticed on physical verification.

(iii) The Company has net granted any loans, secured or unsecured , to companies, firms, Limited Liability Partnerships or other parties covered in the register maintained under section 18 of the Companies Act, 2013.

(iv) In our opinion and according to the information and explanations given to us, the Company has complied with the provisions of sections 185 and 186 of the Companies Act, 2012, to the extent applicable, in respect of grant of loans, making investments and providing guarantees and securities, as applicable.

(v) In our opinion and according to the information and explanations given to us, the Company has net accepted any deposits from the public. The Company does not have any unclaimed deposits and accordingly the previsions of sections 73 to 76 or any other relevant previsions of the Companies Act, 2012 are not applicable to the Company.

(vi) The maintenance of cost records has not been specified by the Central Government under section 148(1) of the Companies Act, 2013.

(vii) According to the information and explanations given to us and the records of the Company examined by us, in respect of statutory dues:

a. The Company has generally been regular in depositing undisputed statutory dues, including Provident Fund, Employees State Insurance, Income-tax, Customs Duty, Value Added Tax, Goods and Services Tax, Cess and other material statutory dues applicable to it to the appropriate authorities.

b. There were no undisputed amounts payable in respect of Provident Fund, Employees State Insurance, Income-tax, Customs Duty, Value Added Tax, Goods and Services Tax, Cess and other material statutory dues in arrears as at March 31, 2021 for a period of mere than six months from the date they became payable.

c. Details of dues of Income-tax, Service Tax, Value Added Tax and Luxury Tax which have net been deposited as on March 31, 2021 on account of disputes are given below:

Name of the Statute Nature of Dues Forum where dispute is pending Period Amount unpaid (Rs. Million]
The Income Tax Act. 1961 Income Tax Commissioner of Income Tax (Appeals) 2004-05 ^ Nil
The Income Tax Act. 1961 Income Tax Madras High Court 2005-06 ^ Nil
Sub-total Nil##
Finance Act, 1994 Service tax Commissioner (Appeals) 2004-07 and 2012-18 E.66
Sub-total( see note below) 5.66 #
The Rajasthan Value Added Tax Act, Value Added Tax Rajasthan Tax Board 2011-12 to 201E-16 Nil
Value Added Tax Rajasthan High Court 2011-12 to 2012-14 Nil
The Tamil Nadu Value Added Tax Act, 2006 Value Added Tax Appellate Tribunal 2011-12 1.08
The Uttar Pradesh Value Added Tax Act, 2008 Value Added Tax Allahabad High Court 2007-08 0.12
Sub-total 1.20 AA
The Rajasthan Tax on Luxuries (in Hotels and Lodging Houses) Act, 1990 Luxury Tax Rajasthan High Court 2010-11 to 2012-14 1.77
Tamil Nadu Tax on Luxuries Act, 1981 Luxury Tax Joint Commissioner 2007-08 to 2011-12 14.E6
The Himachal Pradesh Tax on Luxuries (In Hotels and Lodging House) Act, 1979 Luxury Tax Himachal Pradesh High Court 2008-09 to 2015-16 4.72
The Rajasthan Tax Luxuries (In Hotels and Lodging House) Act, 1990 Luxury Tax Deputy Commissioner (Appeals) 2 014-15 to 2017-18 11.42
Sub-total 32.47 **

^periods c represents assessment year

## Net of Fs 16.47 million paid uncertain protest

# Net of Fs. 0.17 million paid model protest

 

^^ Net of Fs. 11.42 million paid uncertain pretest

**Net of Fs. 13.65 millon paid under protest

Note:

As indicated in note 40 (a] to the financial statements, during the year, the Company has received a demand order from the Commissioner of Central Excise with respect to service tax for the period 2013-14 to 2017-12 amounting to Rs. 14.23 million and the Company intends to file an appeal in respect thereof with the appropriate authorities.

There are no dues in respect of Sales Tax, Customs Duty Excise Duty and Goods and Services Tax which have not been deposited on account of any dispute.

(viii)The Company has not taken any leans or borrowings from financial institutions, banks and government or has not issued any debentures. Hence reporting under clause (viii) of CARO 20l6 is not applicable to the Company.

(ix) The Company has not raised moneys by way of initial public offer or further public offer (including debt instruments) or term loans and hence reporting under clause (ix) of CARO 2016 is net applicable.

(x) To the best of our knowledge and according to the information and explanations given to us, no fraud by the Company and no material fraud on the Company by its officers or employees has been noticed or reported during the year.

(xi) In our opinion and according to the information and explanations given to us, the Company has not paid/ provided any managerial remuneration during the year in accordance with the provisions of section 197 of the Companies Act, 2C13 and hence reporting under clause (xi) of CARO 2016 is net applicable to the Company.

(xii) The Company is not a Nidhi Company and hence reporting under clause.

(xii) of CARO 2016 is not applicable.

(xiii) In our opinion and according to the information and explanations given to us. the Company is in compliance with section 177 and 128 of the Companies Act. 2Cl 3, where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the financial statements as required by the applicable accounting standards.

(xiv) During the year the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures and hence reporting under clause (xiv) of CARO 2016 is not applicable to the Company.

(xv) In our opinion and according to the information and explanations given to us, during the year the Company has not entered into any non-cash transactions with its directors or directors of its holding, subsidiary or associate company, as applicable, or persons connected with them and hence provisions of section 192 of the Companies Act, 2013 are not applicable.

(xvi) The Company is not required to be registered under.

For Deloitte Haskins & Sells LLP
Chartered Accountants
(Firms Registration No. U7366W/W-100018)
Alka Chadha Partner (Membership No. 93474)
Date: May 4, 2021 (UDIN: 21C93474AAAAAV9004)
Place: Gurugram