TAJ GVK Hotels & Resorts Limited
Report on theAudit ofthe Standalone Financial Statements
Opinion
We have audited the accompanying standalone financial statements of TAJ GVK Hotels & Resorts Limited (the “Company”), which comprise the Balance Sheet as at March 31, 2024, the Statement of Profit and Loss (including Other Comprehensive Income), the Statement of Changes in Equity and the Statement of Cash Flows for the year ended on that date and a summary of material accounting policies andotherexplanatoryinformation (hereinafter referredto as the“standalone 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 Indian Accounting Standards prescribed under section 133 ofthe Act read with the Companies (Indian Accounting Standards) Rules, 2015, as amended, (“ind AS”) and other accounting principles generally accepted in India, ofthe state of affairs ofthe Company as at March 31,2024 and its profit, total comprehensive income, changes in equity and its cash flows for the year ended on that date.
Basis for Opinion
We conducted our audit ofthe standalone financial statements in accordance with the Standards on Auditing (“SA”s) specified under section 143(10) ofthe Act. Our responsibilities under those Standards are further described in the Auditor’s Responsibilities for the Audit ofthe Standalone Financial Statements section of our report. We are independent ofthe 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 ofthe standalone financial statements under the provisions ofthe Act and the Rules made 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 obtained by us 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 ofthe standalone financial statements ofthe current period. These matters were addressed in the context of our audit ofthe 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 determinedthe matters described below to bethe keyaudit matters to be communicatedin our report.
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S. No.
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Key Audit Matter
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Auditor’s Response
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1
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Revenue Recognition
To ensure accuracy of recognition, measurement, presentation and disclosures of revenues and related accounts.
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Principal Audit Procedures
Ý We have assessed the Company’s internal controls surrounding its revenuetransactions;
Ý We tested the key controls identified,
Ý We performed substantive detail testing by selecting a sample of revenue transactions, that we considered appropriate to test the evidence of effectiveness of the internal controls and adherence to accounting policies in recognising the revenue, and the rebates and discounts thereagainst.
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2
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Fees and reimbursements to the Operating Company
To ensure accounting ofthe expenses comprising the Basic Fee, incentive Fee and reimbursement of expenses based on the terms of the Agreements entered into with the Operating Company and on the operating results of the respective Hotel properties underAgreement
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Principal Audit Procedures
Ý Ourauditapproachwasasfollows:
Review of each of the Hotel operating agreements enteredinto andtheirstate ofcurrency.
Ý implementation ofthe terms ofthe extant agreements or interim arrangements last approved by the Board of Directors, and validation of the key parameters of the computation thereof.
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3
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Capital Work-in-progress (CWIP)
To establish proper categorisation of items to be capitalised, and appropriate recognition thereof including the consequential derecognition ofthe carrying amounts in the CWiPtotheappropriate heads ofaccount.
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Principal Audit Procedures
Our audit approach was a combination of test of internal controls and substantive procedures which included the following:
Ý Review of amounts included in the CWIP with their work/ purchase orders, andthe due approvals therefor
Ý Applied the tests of Capital or revenue nature of the expenditure according to applicable Standards and principles andthe need, ifany, for impairmentthereof.
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Information Other than the Financial Statements and Auditor’s Report Thereon
The Company’s Board of Directors is responsible for the other information. The other information comprises the information included in the Management Discussion and Analysis, Board’s Report includingAnnexures to Board’s Report, Business Responsibility and Sustainability Report, Corporate Governance and Shareholder’s Information, but does not include the consolidated financial statements, standalonefinancial statements and ourauditor’s reportthereon.
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 ouraudit ofthestandalonefinancial statements, our responsibility is to readthe otherinformation and, indoing so, consider whether the other information is materially inconsistent with the standalone financial statements or our knowledge obtained duringthe course ofouraudit orotherwise appears to be materiallymisstated.
If, based on the work we perform, we conclude that there is a material misstatement of this other information, we are required to reportthatfact. We have nothingto report in this regard.
Responsibilities of Management and Those Charged with Governance for the Standalone Financial Statements
The Company’s Management and Board of Directors are responsible for the matters stated in section 134(5) ofthe Act with respect to the preparation of these standalone financial statements that give a true and fair view of the financial position, financial performance (including other comprehensive income), changes in equity and cash flows ofthe Company in accordance with the accounting principles generally accepted in India, including the Indian Accounting Standards specified under section 133 ofthe Act read with the Rules issued thereunder. This responsibility also includes maintenance of adequate accounting records in accordance with the provisions ofthe Act for safeguarding the assets ofthe 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 ofthe accounting records, relevant to the preparation and presentation ofthe standalone financial statements that giveatrue andfairviewand are free from material misstatement, whether due to fraud orerror.
In preparing the standalone financial statements, the Company’s Management and Board of Directors are responsible for assessing theCompany’s ability to continue as a goingconcern, disclosing, as applicable, matters related to goingconcern and usingthe going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.
The Board ofDirectors is also responsible foroverseeingthe 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 accordancewith SAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
Ý Identify and assess the risks of material misstatement ofthestandalonefinancial 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 mayinvolve collusion, forgery, intentional omissions, misrepresentations, orthe override ofinternal control.
Ý Obtain an understanding ofinternal financial control relevant to the audit in order to design audit procedures that are appropriate in the circumstances. Under section I43(3)(i) ofthe Act, we are also responsible for expressing our opinion on whether the Company has adequate internal financial controls system in place andthe operating effectiveness ofsuch controls.
Ý Evaluate the appropriateness of accounting policies used andthe reasonableness of accountingesti mates and related disclosures made bythe Company’s Management and Board ofDirectors.
Ý Conclude on the appropriateness of the Company’s Management and Board of Directors 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 ourauditor’s report to the related disclosures in the standalone 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 ofourauditor’s report. However, future events or conditions maycausetheCompanyto ceaseto continue as agoing concern.
Ý Evaluate the overall presentation, structure and content of the standalone financial statements, including the disclosures, and whether the standalone 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 andsignificant auditfindings, includinganysignificant deficiencies in internal control thatwe identify during ouraudit.
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 bearon ourindependence, andwhere applicable, relatedsafeguards.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the standalone financial statements for the year ended 31st March 2024 and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences ofdoingsowould reasonably be expectedto outweigh the public interest benefits ofsuch communication
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 in terms of Section 143(11) ofthe Act, we give in “Annexure B”astatement on the matters specifiedin paragraphs 3 and4ofthe Order.
2. A. As required bySectioni43(3) ofthe Act, based on ourauditwe reportthat:
a) We have sought and obtained all the information and explanations which to the best of our knowledge and belief were necessary forthe purposes ofour 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 ofthose books.
c) The Balance Sheet, the Statement of Profit and Loss including Other Comprehensive income, Statement of Changes in Equity andthe Statement ofCash Flows dealtwith by this Report are in agreementwith the books ofaccount.
d) inouropinion, the aforesaidstandalonefinancial statements complywith the indAS specified underSectioni33 oftheAct.
e) On the basis ofthe written representations received from the directors as on March 31,2024 taken on recordbythe Board of Directors, none ofthe directors is disqualified as on March 31, 2024 from being appointed as a director in terms of Section 164(2) oftheAct.
f) With respect to the adequacy ofthe internal financial controls with reference to Standalone Financial Statements ofthe Company andthe operatingeffectiveness ofsuch controls, refer to ourseparate Report in'Annexure A”. Our report expresses an unmodified opinion on the adequacy and operating effectiveness ofthe Company’s internal financial controls with reference to Standalone Financial Statements.
B. With respect to the other matters to be included in the Auditor’s Report in accordance with Rulell ofthe Companies (Audit and Auditors) Rules, 2014, as amended, in our opinion and to the best of our information and according to the explanations given to us:
i. TheCompany has disclosedthe impact ofpendinglitigations on itsfinancial position in its standalonefinancial statements.
ii. the Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses
iii. There has been no delay in transferring amounts, required to be transferred, to the investor Education and Protection Fund by theCompany.
iv. (a) The Management has represented that, to the best of its knowledge and belief, no funds (which are material either individually
or in the aggregate) have been advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kindof funds) by theCompany to or in anyother person or entity, includingforeign entity (“lntermediaries”),with the understanding, whether recorded in writing or otherwise, that the intermediary shall, whether, directly or indirectly lendto orinvestinother persons or entities identifiedin any mannerwhatsoever by oron behalfof the Company (“Ultimate Beneficiaries”) or provide anyguarantee, securityorthelike on behalfofthe Ultimate Beneficiaries;
(b) The Management has represented, that, to the best of its knowledge and belief, no funds (which are material either individually or in the aggregate) have been received by the Company from any person or entity, including foreign entity (“Funding Parties”), with the understanding, whether recorded in writing or otherwise, that the Company shall, whether, directly or indirectly, lendto orinvest in other persons or entities identified in any mannerwhatsoever by oron behalfofthe Funding Party (“Ultimate Beneficiaries”) or provide anyguarantee, security or the like on behalf ofthe Ultimate Beneficiaries;
(c) Based on the audit procedures that have been considered reasonable and appropriate in the circumstances, nothing has come to our notice that has caused us to believe that the representations under sub-clause (i) and (ii) of Rule 11(e), as provided under (a) and (b) above, contain any material misstatement.
v. The final dividend paid by the Company during the year in respect of the dividend declared for the previous financial year 20222023 is in accordancewith sectionl23 oftheCompanies Act 2013to the extent it applies to payment ofdividend.
As stated in note 26 to thestandalonefinancial statements, the Board of Directors of the Company has proposedfinal dividend for the year which is subject to the approval of the members at the ensuing Annual General Meeting. The dividend declared is in accordancewith sectionl23 oftheAct to the extent it applies to declaration ofdividend.
vi. Based on our examination which included test checks, except for the instances mentioned below and as explained in note 36 of the standalone financial statements, the Company has used accounting software’s for maintaining its books of account, which have a feature of recording audit trail (edit log) facility and the same has operated throughout the year for all relevant transactions recordedinthe respective software’s:
i. The feature of recording audit trail (edit log) facility was not enabled, fora portion of the year at the application layer of the accounting software used for maintaining general ledgers for master fields and direct data changes to transactions; the audit trail feature was enabled in a phased manner betweenjune 2023 andjuly2023.
11. Thefeature ofrecording audit trail (edit log) facility was enabled atthe database level to log anydirect data changes forthe accountingsoftware’s usedfor maintainingthe books ofaccounts inthe month ofjanuary 2024.
Further, forthe periods where audit trail (edit log) facilitywas enabled and operatedforthe respective accountingsoftware, we did not come across anyinstance ofthe audit trail feature beingtamperedwith.
C. 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 Companyto its Managerial Personnel duringtheyear is in accordance with the provisions ofsectioni97 ofthe Act.
For M BHASKARA RAO & Co
Chartered Accountants (Firm’s Registration No. 000459S)
D. BAPU RAGHAVENDRA
Partner
Place: Hyderabad (Membership N0.213274)
Date: May 23, 2024 UDIN: 24213274BKEXBC2782
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