| 1. We have audited the accompanying financial statements of James
Hotels Limited which comprise the Balance Sheet as at 31st March, 2015,
the Statement of Profit & Loss, the Cash Flow Statement for the year
then ended and a summary of significant accounting policies and other
explanatory information.
2. The Company's Board of Directors is responsible for the matters
stated in Section 134(5) of the Companies Act, 2013 with respect to the
preparation and presentation 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 the Accounting Standards
specified under Section 133 of the Act, 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 judgement
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.
3. Our responsibility is to express an opinion on these 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.
4. 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.
5. 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 auditor's judgement, 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 Company's preparation of the financial statements that give a
true and fair view in order to design audit procedures that are
appropriate in the circumstances, but not for the purpose of expressing
an opinion on whether the Company has in place an adequate internal
financial controls system over financial reporting and the operating
effectiveness of such controls. An audit also includes evaluating the
appropriateness of the accounting policies used and the reasonableness
of the accounting estimates made by the Company's 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 financial
statements.
6. Attention is invited to the following points of Note '4' of the
financial statements.
i) Note 4.1 - pending litigations against the Company.
ii) Note 4.2- the Company has increased Authorised Share Capital Rs.
140,000,000/- to Rs. 520,000,000/- by passing a special resolution
dated 14th December, 2011 by way of postal ballot; however, the exact
number of Equity Shares & Preference shares has not been specifically
classified.
iii) Note 4.5 - defaults in repayment of dues to banks and assignment
of loans granted by State Bank of India to Asset Reconstruction Company
(India) Limited. Provision for interest accrued, in absence of
confirmation of balances by banks, has been made on accrual basis.
iv) Note 4.8 - non-payment of fee for increase in Authorised Share
Capital.
v) Note 4.11 - provision of liability for Gratuity has been made on
accrual basis; Actuarial Valuation report as required under Accounting
Standard -15, has not been obtained.
vi) Note 4.13 - remuneration paid to Managing Director is subject to
the approval of Shareholders and Central Government.
7. Net-worth of the Company has completely eroded; the management is
of the opinion that the Company shall carry on its business as usual,
hence the financial statements of the Company have been prepared on a
going concern basis; the appropriateness of the said basis is
inter-alia dependent upon future performance and profitability and
presently we are unable to express an opinion on the same.
8. Subject to paragraph 6 & 7 above, 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 inconformity
with the accounting principles generally accepted in India, of the
state of affairs of the Company as at 31sl March, 2015 and its loss and
its cash flows for the year ended on that date.
9. As required by the Companies (Auditor's Report) Order, 2015 issued
by the Central Government of India in terms of sub-section (11) of
Section 143 of the Act, we give in the Annexure a statement on the
matters specified in the paragraph 3 and 4 of the Order, to the extent
applicable.
10. 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 & 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 financial statements, except
provision of liability for Gratuity on accrual basis without taking
actuarial valuation report as required under Accounting Standard - 15,
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, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164(2) of the
Act; and
(f) 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 has disclosed the impact of pending litigations on its
financial position in its financial statements (refer Notes 4.1 & 4.4).
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.
ANNEXURE TO THE INDEPENDENT AUDITORS' REPORT
(Referred to in paragraph 9 of our report of even date on accounts of
James Hotels Limited for the year ended 31st March, 2015).
i. In respect of its Fixed Assets :
a) The records maintained by the Company need to be updated to show
full particulars, including quantitative details and situation of fixed
assets.
b) As explained to us, the Company has a programme for physical
verification on a rotational basis, which, in our opinion, is
reasonable having regard to the size of the Company and the nature of
its business. Accordingly, certain fixed assets have been physically
verified by the management, during the year, and no material
discrepancies were noticed on such verification.
ii. In respect of its Inventories :
a) According to the information and explanations given to us, the
physical verification of inventories is conducted by the management at
periodic intervals; the frequency of verification is reasonable having
regard to the size of the Company and the nature of its inventories.
b) According to the information and explanations given to us, the
procedures for 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) According to the information and explanations given to us, the
Company is maintaining proper records of inventory. The discrepancies
noticed on verification between the physical stocks and the book
records were not material and have been properly dealt with in the
books of account.
iii. According to the information and explanations given to us, the
Company has not granted any loan, secured or unsecured to Companies,
firms or other parties covered in the register maintained under Section
189 of the Companies Act, 2013. Accordingly, clauses (a) &(b) of
paragraph 3(iii) of the Order are not applicable; hence not commented
upon. iv. According to the information and explanations given to us,
there is an adequate internal control system commensurate with the size
of the Company and nature of its business with regard to purchase of
inventories & fixed assets and with regard to the sale of goods &
rendering of services. Further, on the basis of our examination and
according to the information and explanations given to us, we have
neither come across nor have been informed of any major weakness in the
aforesaid internal control system during the year. v. The Company has
not accepted any deposits from the public.
Unsecured loans from promoters were taken in pursuance of stipulations
of the Banks. Unsecured loan (Rs.23,162,704/-) from promoter is exempt
deposit, inconformity with the provisions of Section 73 of the
Companies Act, 2013 read with Rule 2(c)(xiii) of the Companies
(Acceptance of Deposits) Rules, 2014 . The Company, during the year,
has repaid (Rs. 19,700,564/-) to the director and promoters of the
Company. vi. The Central Government has not prescribed maintenance of
cost records under Section 148 of the Companies Act, 2013, read with
the Companies (Cost Records and Audit) Amendment Rules, 2014. vii. In
respect of its Statutory dues :
a) According to the information & explanations given to us and on the
basis of our examination of the records of the Company, amounts
deducted/accrued in the books of account in respect of undisputed
statutory dues including Provident Fund, Employees State Insurance,
Income Tax, Sales Tax. Wealth Tax, Service Tax, Excise Duty, Custom
Duty, Value Added Tax, Cess and other material statutory dues, to the
extent applicable, have not been regularly deposited, during the year,
by the Company with the appropriate authorities.
According to the information and explanations given to us, no
undisputed amounts payable, in respect of Provident Fund, Employees
State Insurance, Income Tax, Sales Tax, Wealth Tax, Service Tax, Excise
Duty, Custom Duty, Value Added Tax, Cess and other material statutory
dues, were in arrears as at 31st March, 2015 for a period of more than
six months from the date they became payable except as mentioned below:
Name of the Nature of Amount Period to which
Statue Dues the amount relates
Income Tax Act, 1961 Tax deducted at
source 10,350 Jun., 2014 to Sep.,
2014
b) According to the information and explanations given to us, there are
no dues of Income Tax, Sales Tax, Wealth Tax, Service Tax, Custom Duty,
Excise Duty, Value Added Tax and Cess which have not been deposited
with appropriate authorities on account of any dispute.
c) According to the information and explanations given to us, there is
no amount required to be transferred to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made thereunder.
viii. The accumulated losses of the Company at the end of the financial
year are more than fifty percent of its net worth. The Company has
incurred cash losses during the current financial year as well as in
the immediately preceding financial year.
ix. According to the information & explanations given to us and on the
basis of verification of records, the Company has defaulted in
repayment of principal amount and interest due to State Bank of India,
Punjab National Bank and United Bank of India; resultantly the accounts
were classified as NPA, the amount of default remained unconfirmed,
(refer Note 4.5). The Company, during the year, has not taken any loan
from financial institution.
x. According to the information & explanations given to us, the Company
has not given any guarantee for loans taken by others from banks or
financial institutions.
xi. According to the information and explanations given to us, the term
loans taken by the Company have been applied for the purpose for which
they were obtained.
xii. According to the information & explanations given to us, no fraud
on or by the Company has been noticed or reported during the course of
our audit.
For VASUDEVA & ASSOCIATES
CHARTERED ACCOUNTANTS
Firm Registration No. - 022239N
Sd/-
Dated : 30th May, 2015 (P.K. VASUDEVA)
Place : Chandigarh PARTNER
Membership No. -13787 |