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Hotel Leela Venture
BSE: 500193|NSE: HOTELEELA|ISIN: INE102A01024|SECTOR: Hotels
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« Mar 12
Auditor's Report (Hotel Leela Venture) Year End : Mar '13
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.
 
 Auditors'' Responsibility
 
 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.
 
 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
 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 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
 overdue amounts.
 
 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
 controls.
 
 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
 the Act.
 
 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
 Fund,
 
 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 
                         penalty
 
 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
 
 Maharashtra VAT, 
 2002                    VAT with interest and            39.72 
                         penalty
 
 Name                 Period to
                      which the       Forum where dispute
                                      is pending
                      amount 
                      relates
 
 Customs Act          Financial 
                      Year 
                      2005-06 to     Commissioner Of Appeals
                                     III, Bangalore
                      2009-10
 
 Customs Act          1989 -90
                      and 
                      2000-2001     Customs ,Excise &Service 
                                    Tax Appellate
 
 Customs Act          Tribunal ,
                      Mumbai
                      1990-1991     Commissioner of Customs,
                                    Mumbai 
 Customs Act          2007-08       Appellate Authority, The Assistant
                                    Commissioner of Commercial
                                    Taxes,Margao 
 
 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
 other securities.
 
 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
 term investment.
 
 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. 
 
                                       Chartered Accountants
 
                                       Registration No: 107917W
 
                                       K.V. Gopalakrishnayya
 
                                       Partner
 
                                       Membership No.21748
 
 Mumbai, 20th May, 2013
Source : Dion Global Solutions Limited
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