Report on the Financial Statements
We have audited the accompanying financial statements of U G HOTELS AND
RESORTS LIMITED ("the Company"), which comprise the Balance Sheet as at
March 31, 2013, and the Statement of Profit and Loss and 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 Standards
referred to in sub-section (3C) of section 211 of the Companies Act,
1956 ("the Act"). This responsibility includes the design,
implementation and maintenance of 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.
Auditor's 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 evidence about the amounts and disclosures in the
financial statements. The procedures selected depend on our 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, we consider 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 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 said accounts due to Note 6(A) of
regarding dispute & compromise with UMAK Investment Company Private
Limited & Note 13 of regarding non provision of doubtful debts for Rs.
48,20 lacs, give the information required by the Companies Act, 1956,
in the manner so required but don't give a true and fair view in
conformity with the accounting principles generally accepted in India,
in view of the dispute and compromise with UMAK Investment Company
Private Limited is still pending at various levels:
a) in the case of the Balance Sheet, of the state of affairs of the
Company as at March 31, 2013;
b) in the case of the Statement of Profit and Loss, 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 sub- section (4A) of section
227 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 purpose of our
audit;
b) in our opinion proper books of account as required by law have been
kept by the Company so far as appears from our examination of those
books;
c) the Balance Sheet, Statement of Profit and Loss, and Cash Flow
Statement dealt with by this Report are in agreement with the books of
account.
d) in our opinion, the Balance Sheet, statement of Profit and Loss, and
Cash Flow Statement comply with the Accounting Standards referred to in
subsection (3C) of section 211 of the Companies Act, 1956;
e) On the basis of written representations received from the directors,
as at March 31, 2013 and taken on record by the Board of Directors, we
report that none of the directors other than Harmit Ghai are
disqualified as at March 31, 2013 from being appointed as a director in
terms of Section 274 (1) (g) of the Act;
Annexure to the Auditors' Report of even date to the members of U G
HOTELS AND RESORTS LIMITED, on the financial statements for the year
ended March 31, 2013 (Refer to in paragraph 5(1) of our report of even
date)
Based on the Audit Procedures performed for the purpose of reporting a
true and fair view on the financials statements of the company and
taking into the consideration the information and explanation given to
us and the books of accounts and other records examined by us in the
normal course of audit, we report that: i) In respect of Fixed Assets
of the Company and in our opinion:
a. The Company has not maintained proper Fixed Assets records.
b. The Company has a programme of physical verification of its fixed
assets by which they are verified annually. In accordance with this
programme, fixed assets were verified during the year and no
discrepancies were noticed on such verification. In our opinion, the
frequency of the physical verification is reasonable having regards to
the size of the company and nature of fixed assets.
c. The Company has not disposed any fixed assets during the year. ii)
In respect of Inventories of the Company and in our opinion:
a. Inventories have been physically verified by management during the
year and the frequency of verification is reasonable.
b. The procedures for physical verification of inventory followed by
the management are reasonable and adequate in relation to the size of
the Company and the nature of its business.
c. The Company is maintaining proper records of inventory. No
material discrepancies were noticed on physical verification of
inventory.
iii) In respect of loans, secured or unsecured, granted to or taken
from companies, firms or other parties covered in the register
maintained under Section 301 of the Companies Act, in our opinion: a.
The Company has granted unsecured interest free/interest- bearing loans
to its subsidiaries which are listed in the register maintained under
Section 301 of the Companies Act, 1956. The terms and conditions of
such loans are prima facie, not prejudicial to the interest of the
Company.
b. The Company has taken loans from two parties covered in the
register maintained under Section 301 of the Companies Act, 1956. The
maximum amount outstanding at any time during the year aggregated to
Rs. 79, 61,928 and the balance outstanding at year end is Rs.79,61,928.
c. In our opinion rate of interest, where ever stipulated and other
terms and conditions of such loans are prima facie not prejudicial to
the interest of the Company.
d. The payments of principal amount and interest where ever stipulated
in respect of such loans have been regular.
e In respect of loans and advances in the nature of loans given by the
Company, the parties/employees have generally repaid the principal
amount and interest as per terms, wherever stipulated,
iv) In our opinion, there is an adequate internal control system
commensurate with the size of the Company and nature of its business
with regard to purchase of inventory, fixed assets and the sale of
goods & services. We have not observed any major weakness in the
internal control system during the course of the audit.
v )(a) In our opinion and according to the information and explanations
given to us, the Company has entered into contracts or arrangements
referred to in section 301 of the Companies Act, 1956, the particulars
of which are required to be entered in the register required to be
maintained under that section.
(b) In the absence of competitive information provided to us, we are
unable to comment regarding the reasonableness of prices of the
transactions entered. In our opinion, the Company has not entered into
any contracts or arrangements referred to in Section 301 of the
Companies Act, 1956, the particulars of which are required to be
entered in the register, maintained section 301.
vi) In our opinion, the Company has not accepted any deposits from the
public within the meaning of section 58A and section 58AA or any other
relevant provisions of the Act and the Companies (Acceptance of
Deposits) Rules, 1975 with regard to the deposits accepted from the
public. No order has been passed by the Company Law Board or National
Company Law Tribunal or Reserve Bank of India or any Court or any other
Tribunal.
vi) In our opinion, the company has an internal audit system
commensurate with the size and nature of its business. However, no
Internal Audit Report was shown to us.
vF:if The maintenance of cost records prescribed under section
209(1)(d) of the Companies Act,1956, is not applicable to the company,
'X) In respect of disputed and undisputed Statutory Dues of the Company
and according to information and explanations given to us and on the
basis of our examination of the records of the Company
a. Amounts deducted / accrued in the books of accounts in respect of
Provident Fund, Investor Education and Protection Fund, Employees'
State Insurance, Income tax, Sales Tax, Wealth Tax, Service Tax,
Customs Duty, Excise Duty and any other material Statutory Dues have
generally been regularly deposited during the year by the Company with
the appropriate authorities, to the extent applicable. There were no
dues on account of Cess under Section 441A of the Companies Act, 1956
since the aforesaid section has not yet been made effective by the
Central Government. b. According to the information and explanations
given to us, no undisputed amounts payablein respect aforesaid dues
were in arrears, as at March 31, 2013 for a period of more than six
months from the date they became payable, wherever applicable except
Employer's contribution to Provident Fund Employee contribution to
Provident Fund, Administration charges on Provident Fund, Service Tax,
Luxury Tax and VAT amounting to Rs.7.18 Lacs, Rs. 4.66 Lacs, Rs. 0.38
Lacs, Rs. 7.98 Lacs, Rs. 18.86 Lacs and 5.93 Lacs respectively.
x) The Company has accumulated losses at the end of the financial year
more than the Net Worth of the company and it has incurred cash losses
in the current year as well as immediately preceding financial year.
xi) Based on our audit procedures and in our opinion, the Company has
not defaulted in repayment of dues to financial institutions or banks
or debenture holders except for car loan from Central Bank of India,
ICICI Bank Limited, Tata Capital Limited and Kotak Mahindra Limited,
but during the financial year company has made settlement/ paid all
these loans except loan from Central bank of India.
xii) The Company has not granted any loans and advances on the basis of
security by way of pledge of shares, debentures and other securities.
Accordingly, the provisions of paragraph 4 clause (xii) of the Order
are not applicable.
xiii) The Company is not a Chit Fund or a Nidhi/Mutual Benefit fund/
society. Accordingly, the provisions of paragraph 4 clause (xiii) of
the Order are not applicable.
xiv) In our opinion the company is not dealing or trading in shares,
debentures, securities and other investments. Accordingly, the
provisions of paragraph 4 clause (xiv) of the Order are not applicable.
xv) In our opinion, the terms and conditions of guarantees given by the
Company for loans taken by others from banks and financial institutions
are not prima facie prejudicial to the interests of the Company.
xvi) In our opinion and to the best of our knowledge and belief,
proceeds of term loans taken were, prima facie, applied for the purpose
it was obtained and no fresh term loan was obtained during the year.
xvii) In our opinion and on an overall examination of the balance sheet
of the Company, no funds have been raised on short-term basis.
xviii) In our opinion, the Company has not made any preferential
allotment of shares to parties or companies covered in the register
maintained under Section 301 of the Companies Act, 1956.
xix) In our opinion and the records examined by us, no debentures have
been issued during the year.
xx) The Company has not raised any monies by way of public issue during
the year. Accordingly, the provisions of paragraph 4 clause (xx) of the
Order are not applicable.
xxi) In our opinion, no material fraud on or by the Company has been
noticed or reported during the period covered by our audit.
FOR SHARMA GOEL & CO.
CHARTERED ACCOUNTANTS
FRN: 000643N
Amar Mittal
Place: New Delhi Partner
Date: 30.05.2013 M.No. 017755 |