pecos hotels & pubs ltd share price Auditors report


To the Members of Pecos Hotels and Pubs Limited

Report on the Audit of the Standalone Financial Statements

Opinion

We have audited the accompanying standalone Financial Statements of Pecos Hotels and Pubs Limited ("the Company"), which comprise the balance sheet as at 31st March 2023, and the statement of profit and loss including a summary of significant accounting policies and other explanatory information for the year then ended (hereinafter referred to as Financial Statements).

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 Companies Act, 2013 ("the Act") in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India including Ind AS, of the state of affairs of the Company as at March 31, 2023 and its Profit for the year ended on that date.

Basis for Opinion

We conducted our audit in accordance with the Standards on Auditing specified under section 143(10) of the Act. Our responsibilities under those Standards are further described in the "Auditor?s Responsibilities for the Audit of the Standalone 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 provisions of the Act and the Rules thereunder, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the ICAI?s Code of Ethics.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our Audit opinion on the Standalone 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 Standalone Financial Statements of the current period. These matters were addressed in the context of our audit of the Standalone Financial Statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the Key Audit Matters to be communicated in our report.

Information Other than the Standalone Financial Statements and Auditor?s Report Thereon :

The Company?s 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, Board?s Report including Annexures to Board?s Report, but does not include the standalone financial statements and our auditor?s 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 in the 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.

Responsibilities of Management and those charged with Governance for the Standalone Financial Statements:

The Company?s 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 the standalone financial statements that give a true and fair view of the financial position, financial performance, 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. This 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 standalone financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. In preparing the standalone financial statements, the Management is responsible for assessing the Company?s 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 Management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so. The Board of Directors are also responsible for overseeing the Company?s financial reporting process.

Auditor?s Responsibilities for the Audit of the Standalone Financial Statements:

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 auditor?s 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 skepticism throughout the audit. We also: i. 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. ii. 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. iii. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. iv. Conclude on the appropriateness of management?s 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 Company?s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor?s 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 auditor?s report. However, future events or conditions may cause the Company to cease to continue as a going concern. v. 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 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.

Report on Other Legal and Regulatory Requirements:

1. As required by the Companies (Auditor?s Report) Order, 2020 ("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? 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,

2023 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 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 over financial reporting of the Company and the operating effectiveness of such controls, refer to our separate Report in "Annexure B". g. With respect to the other matters to be included in the Auditor?s 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, 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 Auditor?s 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 does not have any pending litigations which would impact its financial position as on 31st March 2023. 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 during the year ended March 31, 2023. iv. The Company has neither advanced, loaned or invested any funds nor received any funds from any persons or entities during the financial year and hence, the reporting under this clause is not applicable; and v. The Company has not declared and paid dividend during the financial year and hence, reporting under this clause is not applicable.

For Phillipos& Co., Chartered Accountants

Firm registration number: 002650S

SD/- CA Joe James Partner

Membership number: 251076 UDIN: 23251076BGTNUS9104

Place: Bangalore Date: 22nd May, 2023

Annexure A to Independent Auditor?s report:

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

1. In respect of the Company?s Property, Plant and Equipment?s: a) According to the information and explanation given to us, the Company has maintained proper records showing full particulars, including quantitative details and situation of property, plant and equipment and intangible assets. b) According to the information given to us, the property, plant and equipment have not been physically verified by the management during the year. Hence, we are unable to comment on the discrepancies, if may, which could have risen on such verification. c) According to the information and explanation given to us and on basis of our examination of the records, the Company does not have any immovable properties and hence, provisions of para 3(i)(c) of the order regarding title deeds of properties is not applicable to the Company. d) According to the information and explanation given to us, the Company has not revalued its Property, Plant and Equipment (including Right of Use assets) or intangible assets or both during the year and hence, provisions of para 3(i)(d) of the order is not applicable to the Company. e) According to the information and explanation given to us, no proceedings have been initiated or are pending against the company for holding any Benami property under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and rules made thereunder. Hence, provisions of para 3(i)(e) of the order is not applicable to the Company.

2. In respect of the inventories, working capital limits and investments of the company.

1. According to the information and explanations given to us, the Company has carried out a valuation of its inventories as is commensurate to its scale and there were no material discrepancies noticed.

2. According to the information and explanation given to us and on the basis of our examination of the records, the Company has not been sanctioned any working capital limit in excess of five crore rupees and hence provisions of para 3(ii)(b) of the order is not applicable to the Company.

3. According to the information and explanations given to us, the Company has neither made any investments nor granted any loans, secured or unsecured to the companies, firms, LLP or any other parties covered in the register maintained under section 189 of the Act, and hence the provisions of para 3(iii)(a) to (f) of the is not applicable to the Company.

4. In our opinion and according to the information and explanations given to us, the Company has not entered into any transaction covered under Sections 185 and 186 of the Act. Accordingly, provisions of clause 3 (iv) of the Order is not applicable to the Company.

5. In our opinion, the Company has not accepted any deposit during the year within the meaning of Sections 73 and 76 of the Act and the Companies (Acceptance and Deposit) Rules, 2014 (as amended) nor have any unclaimed deposits as at March 31, 2022. Accordingly, the provisions of the clause 3 (v) of the Order are not applicable to the Company.

6. In our opinion and based on the information and explanation given to us, the maintenance of cost records is not applicable for the Company under sub-section 1 of section 148 of the Companies Act, 2013 and hence the provisions of clause 3(vi) is not applicable to the Company

7. According to the information and explanations given to us and on the basis of examination of our records, in respect of statutory dues, the Company is generally regular in depositing undisputed statutory dues including provident fund, employee?s state insurance, Income Tax, Goods and Service Tax, etc. with appropriate authority. According to the information and explanations given to us, no undisputed amounts payable in respect of Provident Fund, Income Tax, Value Added Tax, Cess , Goods and Service Tax and other material statutory dues were in arrears as at 31st March, 2023.

8. According to the information and explanations given to us, there are no transactions unrecorded in the books of account which have been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act, 1961. Accordingly, the provisions of the clause 3 (viii) of the Order are not applicable to the Company.

9. The Company does not have any loans or borrowings from any lender during the year. Accordingly, paragraph 3(ix) (a) to (f) of the order is not applicable.

10. The Company has not raised any money by way of initial public offer or the further public offer

(including debt instruments). Also, the Company has no term loans. Accordingly, paragraph 3(x) (a) and (b) of the order is not applicable to the Company.

11. 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.

12. In our opinion and according to the information and explanations given to us, the paragraph 3(xii) of the order regarding Nidhi Company is not applicable to the Company.

13. According to the information and explanations given to us and based on our examination of the records of the Company, the provisions of section 177 and transactions with the related parties incompliance with section188 of the Act where applicable, for all transactions with the related parties and the details of related party transactions have been disclosed in the Standalone Financial Statements as required by the applicable accounting standards.

14. According to the information and explanation given to us the Company has got an internal audit system that is commensurate to the size and nature of its business.

15. In our opinion and according to the information and explanations given to us and based on our examination of the records, the Company has not entered into any non-cash transactions with Company?s directors or persons connected with them and hence paragraph 3 (xv) of the Order is not applicable to the Company.

16. According to the information and explanations given to us, the Company is not required to be registered under section45-IA of the Reserve Bank of India Act,1934 and hence, the paragraph 3 (xvi) of the order is not applicable to the Company.

17. The Company has not incurred cash losses during the financial year covered by our audit and the immediately preceding financial year.

18. There has not been any resignation of statutory auditor during the year and hence the paragraph 3 (xviii) of the Order is not applicable to the Company.

19. According to the information and explanations given to us, there is no existence of material uncertainty as on the date of the audit report and the Company is capable of meeting its liabilities and hence paragraph 3(xix) of the Order is not applicable to the Company.

20. According to the information and explanations given to us, and on the basis of our examination of the records provisions of sec 135 of the Companies Act, 2013 is not applicable to the Company and hence paragraph 3(xx) of the Order is not applicable to the Company.

21. In our opinion, the Company being a Standalone Company the paragraph 3(xxi) of the order is not applicable to the Company.

For Phillipos & Co.,

Chartered Accountants Firms Registration No. 002650S

Joe James Partner

Membership No. 251076

UDIN: 23251076BGTNUS9104 Place: Bangalore Date: 22nd May, 2023

Annexure "B" to Independent Auditor?s report:

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

(Referred to in paragraph 2(f) under the heading ‘Report on Other Legal and Regulatory Requirements? of our report of even date) We have audited the internal financial controls over financial reporting of Pecos Hotels and Pubs Limited ("the Company") as of March 31, 2023 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Management?s Responsibility for Internal Financial Controls:

The Company?s management is responsible for establishing and maintaining 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 (‘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 company?s 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 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 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. 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 auditor?s judgment, including the assessment of the risks of material misstatement of the standalone 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 Company?s 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 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 standalone 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 standalone 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:

According to the information and explanations given to us and based on our audit, except for the effects/possible effects of the material weaknesses described in our report of even date on the achievement of the objectives of the control criteria, the Company has maintained, in all material respects, adequate internal financial controls over financial reporting and such internal financial controls over financial reporting were operating effectively as of March 31,2023, 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 Phillipos & Co., Chartered Accountants

Firms Registration No. 002650S

Joe James Partner

Membership No. 251076 UDIN: 23251076BGTNUS9104 Place: Bangalore Date: 22nd May, 2023