Report on the Financial Statements
We have audited the accompanying financial statements of Hotel
Leela venture Limited (the Company) which comprises the Balance Sheet
as at 31st March 2013, the Statement of Profit and Loss and the Cash
Flow statement for the year then ended and a summary of significant
accounting policies and other explanatory information.
Management''s Responsibility for the Financial Statements
Management is responsible for the preparation of these 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
Accounting Standards referred to in Section 211(3C) of the Companies
Act,1956 (''the Act).This responsibility includes the design,
implementation and maintenance of the internal control 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.
Our responsibility is to express an opinion on these financial
statements based on our audit. We conducted our audit in accordance
with the Standards on Auditing issued by the Institute of Chartered
Accountants of India. 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 misstatements.
An audit involves performing procedures to obtain audit evidences about
the amounts and disclosures in the financial statements. The procedure
selected depends on auditor''s judgement, including the assessment of
the risks of the material misstatements of the financial statements
whether due to fraud or error. In making those risk assessments, the
auditor considers internal control relevant to the Company''s
preparation and fair presentation of the financial statements in order
to design audit procedures that are appropriate in the circumstances.
An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of the accounting estimates made
by the management, 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.
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 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 Balance Sheet, of the state of affairs of the Company
as at 31st March 2013;
b. In the case of Profit and Loss Account, of the loss for the year
ended on that date; and
c. In the case of the Cash Flow Statement, of the Cash Flows for the
year ended on that date.
Report on Other Legal and Regulatory Requirements
1 As required by the Companies (Auditor''s Report) Order, 2003 ( The
Order) issued by the Central Government of India in terms of Section
227(4A) of the Act, we give in the Annexure, a statement on the matters
specified in paragraphs 4 and 5 of the Order.
2. As required by Section 227(3) of the Act, we report that:
a. We have obtained all the information and explanations which, to the
best of our knowledge and belief, were necessary for the purposes of
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
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 Balance Sheet, the Statement of Profit and Loss
and the Cash Flow Statement comply with the Accounting Standards, to
the extent applicable, referred to in Section 211 (3C) of the Act;
e. On the basis of written representations received from the directors
as on March 31st, 2013, taken on record by the Board of Directors, none
of the directors is disqualified as at March 31st, 2013 from being
appointed as a director in terms of Section 274 (i) (g) of the Act.
ANNEXURE TO THE AUDITORS'' REPORT [referred to in paragraph (1) under
the heading of Report on Other Legal and Regulatory Requirements of
our report of even date]
i In respect of its 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, all the fixed assets were physically verified
by the Management 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 explanations given to us,
no material discrepancies were noticed on such verification.
c. The fixed assets disposed off during the year, in our opinion, do
not constitute a substantial part of the fixed assets of the Company
and such disposal has, in our opinion, not affected the going concern
status of the Company.
ii In respect of its Inventories:
a. As explained to us, inventories were physically verified during the
year by the Management at reasonable intervals.
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 were reasonable and adequate in relation to
the size of the Company and nature of the business.
c. In our opinion and according to the information and explanation
given to us, the Company has maintained proper records of inventories
and no material discrepancies were noticed on physical verification.
iii Loans from/to related parties:
a. According to the information and explanations given to us, the
Company has not granted secured or unsecured loans to companies, firms
or other parties covered in the Register maintained under Section 301
of the Act.
b. The Company has taken unsecured loans from four private limited
Companies listed in the register maintained under Section 301 of the
Act. The maximum balance outstanding during the year was Rs. 3,770 lakhs
and the outstanding as at the end of the year is Rs.1501.81 Lakhs.
c. The rate of interest and other terms and conditions of these
unsecured loans are in our opinion prima facie not prejudicial to the
interest of the Company.
d. In respect of the said loans and the interest thereon, there are no
iv. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the Company and nature of its business
with regard to purchase of inventories and fixed assets and sale of
goods and services. During the course of our audit, we have not
observed any continuing failure to correct major weaknesses in internal
v. a. To the best of our knowledge and belief and according to the
information and explanations given to us, transactions to be entered in
the register maintained under Section 301 of the Act, have been entered
in the register.
b. According to the information and explanation given to us, the
Company has not entered into any contracts / arrangements which need to
be entered in the register maintained under Section 301 of the Act,
exceeding the value of Rs. 5 Lakhs in respect of each party during the
year under review.
i. In our opinion and according to the information and explanations
given to us, the Company has not accepted deposits in terms of the
provisions of Sections 58A and 58AA or any other relevant provisions of
vii In our opinion, the Company has an adequate internal audit system
commensurate with the size and nature of its business.
viii The central Government has not prescribed maintenance of cost
records under section 209 (1) (d) of the Act in respect of any of the
activities of the Company.
ix a. Based on information and explanation furnished to us there are
delays in depositing undisputed statutory dues, including Provident
Employees'' State Insurance, Income-Tax, Wealth Tax, Sales Tax, Service
Tax, Cess and other material statutory dues with the appropriate
authorities during the year under review. As at the end of the
financial year there are no undisputed amounts payable in respect of
the aforesaid dues which were outstanding as on 31st March 2013 for a
period of more than six months from the date they became payable except
wealth tax dues of Rs. 2.37 lakhs.
b. According to the information and explanations given to us, details
of disputed Sales Tax, Income Tax, Custom Duty, Wealth Tax, Service
Tax, Excise Duty and Cess which have not been deposited with
appropriate authorities as on 31st March, 2013 on account of dispute
are given below:
Name of the Statute Nature of Dues Amount
(? in Lakhs)
Karnataka VAT Act,
2003 VAT with interest and 145.25
Customs Act Customs Duty and Penalty 75.09
Customs Act Customs Duty and Penalty 2.00
Goa Tax on
Luxuries Act Luxury Tax 33.93
2002 VAT with interest and 39.72
Name Period to
which the Forum where dispute
Customs Act Financial
2005-06 to Commissioner Of Appeals
Customs Act 1989 -90
2000-2001 Customs ,Excise &Service
Customs Act Tribunal ,
1990-1991 Commissioner of Customs,
Customs Act 2007-08 Appellate Authority, The Assistant
Commissioner of Commercial
Customs Act 2008-09 Joint Commissioner of Sales
Tax Appeals II ,Mumbai
x The accumulated losses of the Company do not exceed 50% of its net
worth. The Company has incurred cash losses during the financial year
covered by our audit and has not incurred cash losses in the
immediately preceding financial year.
xi. In our opinion, on the basis of audit procedures and according to
the explanation and information given to us, the Company has not
defaulted in repayment of dues to banks/financial
institutions/debenture holders in view of the debt restructuring
approved under CDR mechanism. The Foreign Currency Convertible Bonds
including redemption premium amounting to Rs.34,063.26 lakhs which were
due for redemption on 25th April 2012 were redeemed on 25th May 2012.
xii. In our opinion and according to the information and explanations
given to us, no loans and advances have been granted by the Company on
the basis of securities by way of pledge of shares, debentures and
xiii. The Company is not a chit fund / nidhi / mutual benefit fund /
society. Accordingly, clause 4 (xiii) of the Order is not applicable to
the Company during the year under audit.
xiv. The Company during the year under review has not dealt or traded
in shares, securities, debentures and other investments except
investment in mutual funds, for which proper records of the
transactions and contracts are maintained. All investments have been
held by the Company in its own name.
xv. The Company has not given any guarantee for loans taken by others
from financial institutions or banks.
xvi. To the best of our knowledge and belief and according to the
information and explanations given to us, in our opinion, term loans
availed by the Company were, prima facie, applied by the Company during
the year for the purposes for which the loans were obtained.
xvii. According to the information and explanations given to us, and on
an overall examination of the Balance Sheet of the Company, funds
raised on short term basis have not been used during the year for long
xviii. The company has made preferential allotment of shares to
companies covered in the Register maintained under section 301 of the
Act and the price at which shares have been issued is prima facie not
prejudicial to the interest of the Company.
xix. The Company has created securities / charges in respect of
secured debentures issued.
xx. The Company has not raised any monies by way of public issue
during the year.
xxi. To the best of our knowledge and belief and according to the
information and explanations given to us, no material fraud on or by
the Company has been noticed or reported during the year.
For PICARDO & CO.
Registration No: 107917W
Mumbai, 20th May, 2013