polo hotels ltd share price Auditors report


To The Members of M/s POLO HOTELS LIMITED

Report on the Financial Statements

We have audited the accompanying standalone financial statements of M/s POLO HOTELS LIMITED, which comprise the Balance Sheet as at 31st March, 2017, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Managements Responsibility for the Standalone Financial Statements

The Companys Management is responsible for the matters stated in Section 134(5)of the Companies Act,2013 ("the Act") with respect to the preparation and presentation of these financial statements that give a true and fair view of the financial position,financial performanceand 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 Companies Act,2013 read with Rule 7 of the Companies (Accounts) Rules, 2014. 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 estimatesthat 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.

Auditors Responsibility

Our responsibility is to express an opinion on these standalone financial statements based on our audit.

We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be

included in the audit report under the provisions of the Act and the Rules made thereunder.

We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Companys preparation of the financial statements that give a true and fair view in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the accounting policies used and the reasonableness of the accounting estimates made by the Companys Directors, as well as evaluating the overall presentation of the financial statements.

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

Basis of Qualified Opinion

1. The company has provided depreciation on the basis of revised useful lives taken on new technical estimate. Therefore had the company provided depreciation on the basis of useful life specified in Schedule II of the Companies Act, 2013 the depreciation would have been higher and the fixed assets have been lower by the amount of Rs. 9.80 Lacs.

2. The company is in non-compliance of AS 15 Employee Benefits to the extent of provision for leave encashment and provision for gratuity without ascertaining actuarial valuation.

Subject to the qualification above, in our opinion and to the best of our information and according to the explanations given to us, the 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.

(a) In the case of the Balance Sheet, of the State of Affairs of the Company as at 31st March, 2017;

(b) In the case of the Statement of Profit and Loss, of the Profit of the Company for the year ended on that date, and

(C) in the case of the Cash Flow Statement, of the Cash Flows of the Company for the year ended on that date.

Emphasis Of Matter

The Company has received notice issued under sec. 13(2) of the Securitisation and reconstruction of financial Assets & Enforcementof security Interest Act, 2002 from Allahabad bank/Religare finvest ltd./Deewan housing finance Ltd., in respect of term loans availed from the Banks/Financial Institutions.The Company is taking legal advice on the same.

Other Matter

We draw attention to the fact that the trade receivable includes an amount of Rs.50,92,237 due from Hot Millions Food Pvt. Ltd. is pending realization and the same being disclosed in the Note 27 of the financial statements.

Our opinion is not modified in respect to the above matter.

Report on Other Legal and Regulatory Requirements

1. As required by the Companies (Auditors Report) Order, 2017 ("the Order") issued by the Central Government of India in terms of Sub Section (11) of Section 143 of the Act, we give in the Annexure -2 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 Actand Companies (Audit and Auditors) Rule 2014, 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 accounts 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, Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of accounts.

(d) In our opinion, the Balance Sheet, Statement of Profit and Loss, and Cash Flow Statement comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules 2014 except as stated above in qualified opinion para.

(e) On the basis of the written representations received from the directors as on 31st March, 2017 taken on record by the Board of Directors, none of the directors is disqualified as on 31st March, 2017 from being appointed as a director in terms of Section 164(2) of the Act and,

(f) Our separate report on adequacy of internal financial control system and operating effectiveness of such controls is enclosed in Annexure 1.

(g) with respect to the other matters included in the Auditors Report in accordance with Rule 11 of the Companies (Audit and

Auditors) Rules, 2014 in our opinion and to best of our information and according to the explanation given to us.

i. The company has pending litigation impacting its financial position in its financial statement and the disclosure as required has been disclosed in the financial statements.

ii. The Company did not have any long term contracts including derivative contracts as such the question of commenting on

any material foreseeable losses does not arise.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the

Company.

iv The Company has provided requisite disclosures in its Financial statements as to holdings as well as dealings in Specified bank Notes during the period from 8th November, 2016 to 30th December 2016 and these are in accordance with the books of accounts maintained by the Company.

For Ashwani K. Gupta & Associates
Chartered Accountants
Firm Regn. No. 003803N
Arvinder Singh
Date : 21 August, 2017 Partner
Place: Panchkula Membership Number: 091721

Report on the Internal Financial Controls under Clause (i) of Sub-Section 3 of Section 143 of

The Companies Act, 2013 ("the Act")

We have audited the internal financial controls over financial reporting of M/s Polo Hotels Limited ("the Company") as of 31st

March, 2017 in conjunction with our audit of the standalone financial statements of the Company for the year ended on that date.

Managements Responsibility for Internal Financial Controls

The Companys management is responsible for establishing and maintaining internal financial controls 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.

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, issued by ICAI and deemed to be prescribed under Section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, 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 judgment, 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 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 authorizations of management and directors of the company; and

(3) Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the companys assets that could have a material effect on the financial statements.

Inherent Limitations of Internal Financial Controls 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, 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 31st March, 2017, 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 Ashwani K. Gupta & Associates
Chartered Accountants
Firm Regn. No. 003803N
Arvinder Singh
Partner
Membership Number: 091721
Panchkula
21st August, 2017

Auditors Report as per the Companies (Auditors Report) Order 2017

The Annexure referred to in our Independent Auditors Report to the members of the Company on the statements for the year ended 31 March, 2017, we report that:-

1. In respect of fixed assets:

a) The Company has maintained proper records showing full particulars including quantitative details and situation of fixed assets on the basis of available information.

b) As explained to us, the management during the year has physically verified the fixed assets in a phased periodical manner, which in our opinion is reasonable having regard to the size of the Company and nature of its assets. According to the information and explanation given to us no material discrepancieswere noticed on such physical verification.

c) In our opinion and according to the information and explanation given to us, the company has not disposed of substantial part

of fixed assets during the year and the going concern status of the Company is not affected.

2. In respect of its Inventories: a) As explained to us, inventories have been physically verified by the management at reasonable interval during the year.

b) In our opinion and according to the information and explanation given to us, the procedures of physical verification of inventories followed by the management are reasonable and adequate in relation to the size of the company and the nature of its business.

c) In our opinion and according to the information and explanation given to us, the company has maintained proper records of inventories. As explained to us, there was no material discrepancies noticed on physical verification of inventory as compared to the book records.

3. According to the Information and explanation given to us, the company has during the year not granted any unsecured loan to anyparty covered in the register maintained under Section 189 of the Companies Act 2013 and in our opinion, hence Para (a) and (b) are not applicable.

4. The company has not given any loans, guarantees or made any investments under section 185 of the Companies Act, 2013. However it had given guarantee against fund based limits provided to M/s ASD Tobacco Pvt. Ltd. The same being classified as NPA by the bank during the year and the company has been called upon to discharge in full the liability by paying to the bank. The guarantee amount does not exceed the limit as per provisions of Section 186.

5. In our opinion and according to the information and explanation given to us, the company during the year has not accepted any deposits in contravention of the directives issued by the Reserve Bank of India and the provisions of sections 73 to 76 or any other relevant provisions of the Companies Act 2013 and the rules framed there under, where applicable, have been complied with. No order has been passed by the Company Law Board or National Company Law Tribunal or RBI or any court or any other tribunal.

6. According to the information and explanation given to us, government has not prescribed maintenance of cost records under sub section (1) of section 148 of the Companies Act, 2013 for the products of the company.

7A. According to the information and explanation given to us and on the basis of our examination of the records of the Company is not regular in depositing the undisputed statutory dues including Income Tax, Sales Tax, Service Tax, Cess and other statutory dues as applicable to it.

7B. According to the information and explanation given to us and the records of the company examined by us, there are material

dues of Tax Deducted Source pending as on March 31, 2017 which have not been deposited on account of a dispute.

Name of the Statute Nature of Dues Amount (Rs.) Period to which the amount relates Forum where dispute is pending
Finance Act, 1994 Service Tax 1776413/- March 2009 to July 2012 ACCEST, Panchkula

7C. According to information and explanation given to us, there was no amount which is required to be transferred to Investor Education and Protection Fund in accordance with the relevant provisions of the Companies Act, 2013 and rules made thereunder.

8. According to information and explanations given to us, the company has defaulted in repayment of dues to banks or financial institutions during the year of audit. Further, the Company has not issued any debentures.

9. In our opinion and according to the information given to us, the term loans have been applied for the purpose for which they were taken. Further, the company has not raised funds by way of Initial Public Offer or further public offer during the year under consideration.

10. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the information and explanations given to us, we have neither come across any instance of material fraud on or by the company, noticed or reported during the year, nor have we been informed of such case by the management.

11. The company has paid themanagerial remuneration during the period under consideration, as per the provisions of Section

197 and 198 relating to payment of managerial remuneration.

12. As the company is not a Nidhi company, hence this clause is not applicable.

13. All transactions with the related parties are in compliance with sections 177 and 188 of Companies Act, 2013 and the details have been disclosed in the Financial Statements as required by the applicable accounting standards.

14. The Company has made private placement of 88,88,889 compulsory convertible preference shares to the promoters bearing face value of Rs.10/- issued at premium of Rs. 1.25/- and converted them into equity shares during the year under review as per the provision of section 42 of the companies act2013.

15. In our opinion and according to the information and explanation given to us, during theyear company has not entered into any non-cash transactions with directors or persons connected with him. Hence, the provisions of section 192 of Companies Act, 2013 are not applicable to the company.

16. company is not required to be registered under section 45-IA of the Reserve Bank of India Act, 1934 as it is not a NBFC.

For Ashwani K. Gupta & Associates
Chartered Accountants
Firm Regn. No. 003803N
st Arvinder Singh
Date : 21 August, 2017
Partner
Place: Panchkula
Membership Number : 091721