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You can view the entire text of Notes to accounts of the company for the latest year

BSE: 500850ISIN: INE053A01029INDUSTRY: Hotels, Resorts & Restaurants

BSE   ` 143.10   Open: 140.40   Today's Range 139.65
+4.15 (+ 2.90 %) Prev Close: 138.95 52 Week Range 110.00
Year End :2018-03 

Note 1: Corporate Information

The Indian Hotels Company Limited (“IHCL” or the “Company”), is primarily engaged in the business of owning, operating & managing hotels, palaces and resorts.

The Company is domiciled and incorporated in India in 1902 and has its registered office at Mandlik House, Mandlik Road, Mumbai - 400 001, India. It is promoted by Tata Sons Limited, which holds a significant stake in the Company.

The financial statements for the year ended March 31, 2018 were approved by the Board of Directors and authorised for issue on May 25, 2018.


(i) Non Convertible Debentures - Secured include:

a) 4,950, 7.85% Secured Non-Convertible Debentures ofRs. 10 lakhs each aggregating Rs. 495 crores, allotted on January 20, 2017 are repayable at par after the end of 5th year from the date of allotment i.e on April 15, 2022.

b) 3,000,10.10% Secured Non-Convertible Debentures of Rs. 10 lakhs each aggregating Rs. 300 crores, allotted on November 18, 2011 are repayable at par on November 18, 2021 i.e at the end of 10th year from the date of allotment.

c) 2,500, 9.95% Secured Non-Convertible Debentures of Rs. 10 lakhs each aggregating Rs. 250 crores, allotted on July 27, 2011 are repayable at par on July 27, 2021 i.e at the end of 10th year from the date of allotment.

(ii) All the Secured Non-Convertible Debentures are rated, listed and secured by a pari passu first charge created on all the property, plant and equipment of the Company, both present and future.

(iii) Non Convertible Debentures - Unsecured include:

a) 2,000, 7.85% Unsecured Non-Convertible Debentures ofRs. 10 lakhs each aggregatingRs. 200 crores, allotted on April 20, 2017 are repayable on April 20, 2020, i.e at the end of the 3rd year from the date of allotment.

b) 2,500, 2% Unsecured Non-Convertible Debentures of Rs. 10 lakhs each aggregating Rs. 250 crores, allotted on December 9, 2009 are repayable on December 9, 2019 i.e at the end of the 10th year from the date of allotment, along with redemption premium of Rs. 12.43 lakhs per debenture.

c) 2,000, 2% Unsecured Non-Convertible Debentures ofRs. 10 lakhs each aggregating Rs. 200 crores, allotted on April 23, 2012 were repayable on April 23, 2017, i.e at the end of the 5th year from the date of allotment along with redemption premium of Rs. 4.71 lakhs per debenture. During the year, the Company has repaid these debentures on the due date.

(iv) Term Loan from Banks (Unsecured) include:

a) External commercial borrowing of US $ 95 million was taken on November 23, 2011. The loan was repayable at the end of 50th, 60th, and 72nd month from November 23, 2011 in equal instalments to achieve the average maturity of 5.05 years and carries an interest which is based on a spread over LIBOR. The first instalment of US $ 31.67 million and the second instalment of US $ 31.67 million were repaid on January 25, 2016 and November 23, 2016 respectively. During the year, the Company has repaid the last instalment of US $ 31.66 million ( Rs. 205.29 crores) due on November 22, 2017.

b) Unsecured term loan from a bank of Rs. 49.88 crores outstanding at the beginning of the year was repaid on due date. The Company had further availed an unsecured term loan from a bank of Rs. 100 crores repayable at the end of 18 months from the date of drawdown. The loan was drawn in 3 tranches of Rs. 50 crores, Rs. 40 crores and Rs. 10 crores on September 9, 2017, September 15, 2017 and September 20, 2017 respectively. The Company has prepaid an amount ofRs. 50 crores during the year. The net loan now stands at Rs. 50 crores, of which Rs. 40 crores is due on March 15, 2019 and Rs. 10 crores is due on March 20, 2019 and has been classified under current maturities of long term borrowings. The Company has prepaid the outstanding loan of Rs. 50 crores in April, 2018.

Note 2 : Accounting and Disclosures for Scheme of Amalgamation

During the year, the National Company Law Tribunal (“NCLT”), Mumbai bench vide its Order dated March 8, 2018 has approved the Scheme of Amalgamation of TIFCO Holdings Ltd (“TIFCO”), a wholly owned investment holding subsidiary, with the Company. The Scheme was approved by the Board of Directors on May 26, 2017. Consequent to the said Order and filing of the final certified Orders with the Registrar of the Companies, Maharashtra on April 11, 2018, the Scheme has become effective upon the completion of the filing with effect from the Appointed Date of April 1, 2017.

Upon coming into effect of the Scheme, the undertaking of TIFCO stands transferred to and vested in the Company with effect from the Appointed Date.

As this is a business combination of entity under common control, the amalgamation has been accounted using the ‘pooling of interest’ method (in accordance with the approved Scheme). The figures for the previous periods have been recast as if the amalgamation had occurred from the beginning of the preceding period to harmonise the accounting for the Scheme with the requirements of Appendix C of Ind AS 103 on Business Combinations. The following Assets and Liabilities and Income and Expense are included (after eliminating the intercompany balances) in the financial statements of the Company for the periods presented below:

All equity shares of TIFCO held by the Company were cancelled without any further application, act or deed. Accordingly, the investment held by the Company in TIFCO aggregating to Rs. 81.50 crores has been eliminated and the reserves and surplus of TIFCO aggregating to Rs. 159.76 crores and Rs. 151.30 crores for years ended March 31, 2018 and March 31, 2017 respectively were added on line by line basis with the respective reserves of the Company after considering the impact of the difference of accounting policies. This amalgamation did not involve any cash outflow (except for the transaction costs which was expensed out) as TIFCO was a wholly owned subsidiary and the amalgamation has been accounted using the ‘pooling of interest’ method. Opening cash balances aggregating to Rs. 0.31 crore were transferred to the Company.

Note 3 : Contingent Liabilities (to the extent not provided for) and Contingent Assets:

The Company is involved in a number of appellate, judicial and arbitration proceedings (including those described below) concerning matters arising in the course of conduct of the Company’s businesses and is exposed to other contingencies arising from having issued guarantees to lenders of its subsidiaries and other entities. Some of these proceedings in respect of matters under litigation are in early stages, and in some other cases, the claims are indeterminate.

(a) On account of matters in dispute:

Amounts in respect of claims (excluding interest and penalties) asserted by various revenue authorities on the Company, in respect of taxes, etc., which are in dispute, are as under:


i) In respect of Income Tax matters, the Company has ongoing disputes with Income Tax Authorities relating to treatment of certain items / adjustments carried out by the Department. The Company’s appeals are pending before various Appellate Authorities. Most of these disallowances /adjustments, being repetitive in nature, have been raised by the income tax authorities consistently in most of the years. Cash outflows for the above are determinable only on receipt of judgements pending with various authorities /Tribunals. The Company expects to sustain its position on ultimate resolution of the appeals.

ii) In respect of regulatory matters please refer note no. 36

(b) On account of lease agreements:

In respect of a plot of land provided to the Company under a lease agreement, on which the Company has constructed a hotel, the lessor has made a claim of Rs. 387.95 crores to date, (13 times the previous annual rental) for increase in the rentals with effect from 2006-07. The Company believes these claims to be untenable. The Company has contested the claim based upon legal advice, by filing a suit in the Honourable High Court of Judicature at Bombay on grounds of the lessor’s inconsistent stand on automatic renewal of lease, levy of lease rentals and method of computing such lease rent, within the terms of the then existing lessors’s policy as also a Supreme Court judgment on related matters. Even taking recent enactments into consideration, in the opinion of the Company, the computation cannot stretch beyond Rs. 100.41 crores (excluding interest / penalty), and this too is being contested by the Company on merit.

Further, a “Notice of Motion” has been filed by the company before by the Honourable High Court of Judicature at Bombay, inter alia, for a stay against any further proceedings by the lessor, pending a resolution of this dispute by the Honourable Bombay High Court. In view of this, and based on legal advice, the Company regards the likelihood of sustainability of the lessor’s claim to be remote and the amount of any potential liability, if at all, to be indeterminate.

The lessor’s lawyer had given a statement before the Honourable High Court of Judicature at Bombay that it shall not give effect to its notice of termination during the pendency of the suit and the statement continues to be in force till date.

(c) Others:

Management is generally unable to reasonably estimate a range of possible loss for proceedings or disputes other than those included in the estimate above, including where:

(i) plaintiffs / parties have not claimed an amount of money damages, unless management can otherwise determine an appropriate amount;

(ii) the proceedings are in early stages;

(iii) there is uncertainty as to the outcome of pending appeals or motions or negotiations; and

(iv) there are significant factual issues to be resolved; and/or there are novel legal issues presented.

The Company’s management does not believe, based on currently available information, that the outcomes of the above matters will have a material adverse effect on the Company’s financial position, though the outcomes could be material to the Company’s operating results for any particular period, depending, in part, upon the operating results for such period. It is not practicable for the Company to estimate the timings of cash flows, if any, in respect of the above.

(d) Key development in respect of a property:

After expiry of the license period ofTaj Mahal Hotel, New Delhi, there was an ongoing litigation between the Company and the licensor, New Delhi Municipal Council (NDMC). On April 20, 2017, the Supreme Court has permitted NDMC to conduct e-auction of license rights, and has also allowed the Company six months’ time to handover the premises in case the Company is unsuccessful in the e-auction. The hotel at the premises shall continue to carry out its operations in the meantime. The Supreme Court has directed that at the time of conducting such e-auction, NDMC shall take into account the unblemished record of the Company as well as its capabilities. NDMC has been directed to take into account these facts while taking a final decision in the matter. On the 9th of December, 2017, NDMC published a Tender for the hotel and land, with certain terms and conditions, vide which the auction was scheduled to take place on the 30th of January, 2018. Interested bidders, including the Company, have submitted queries on the said terms, which were supposed to be responded on the 3rd of January, 2018. However, the said responses were never published, as the dates were postponed indefinitely. Subsequently, on the 25th of April, 2018, a new Tender has been published. The Company is evaluating its options with respect to the same.

(e) Claims filed by the Company:

The Company has filed a claim for Government subsidy with the Department of Industrial Policy and Promotion for a new greenfield hotel project which has commenced operations. The claim is in the initial stage of verification and in the absence of reasonable certainty at this stage on the amount that may be ultimately approved, no deferred income has been recognised.

Note 4 : Capital Commitments

Estimated amount of contracts remaining to be executed on capital account net of capital advances and not provided for is Rs. 101.62 crores (Previous Year - Rs. 62.47 crores).

Note 5: Rights Issue of Equity Shares

On November 7, 2017, the Company allotted 19,99,84,430 Equity Shares of face value of Rs. 1 each for cash, at a price of Rs. 75 per equity share (including a premium of Rs. 74 per share), aggregating to Rs. 1499.88 crores to the existing shareholders on a “rights” basis in the ratio of 1 Equity Share for every 5 equity shares held by equity shareholders.

Note 6 : Operating Leases

The Company has taken certain vehicles, land and immovable properties on operating lease. The lease of hotel properties are generally long term in nature with varying terms, escalation clauses and renewal rights expiring within five to one hundred and ninety eight years. On renewal, the terms of the leases are renegotiated. The total lease rent paid on the same is included under Rent and Licence Fees forming part of Other Expenses (Refer Note 26, Footnote (iv)).

b) Fair value hierarchy

The following table presents the fair value hierarchy of assets and liabilities measured at fair value on a recurring basis, it also includes the financial instruments which are measured at amortised cost for which fair values are disclosed.


(i) The Company has not disclosed the fair value of financial instruments such as trade receivables, trade payables, short term loans, deposits etc. because their carrying amounts are a reasonable approximation of fair value.

(ii) The carrying amounts of the borrowings (excluding non-convertible debentures) that are not measured at fair value are reasonable approximation of fair value, as they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period.


(i) The Company has not disclosed the fair value of financial instruments such as trade receivables, trade payables, short term loans, deposits etc. because their carrying amounts are a reasonable approximation of fair value.

(ii) The carrying amounts of the borrowings (excluding non-convertible debentures) that are not measured at fair value are reasonable approximation of fair value, as they are floating rate instruments that are re-priced to market interest rates on or near the end of the reporting period.

c) Fair value hierarchy:

The fair value hierarchy is based on inputs to valuation techniques that are used to measure fair value that are either observable or unobservable and consists of the following three levels:

(a) Level 1: Level 1 hierarchy includes financial instruments measured using quoted prices in an active market. This includes listed equity instruments, traded debentures and mutual funds that have quoted price/ declared NAV. The fair value of all equity instruments (including debentures) which are traded in the stock exchanges is valued using the closing price as at the reporting period.

(b) Level 2: Level 2 hierarchy includes financial instruments that are not traded in an active market (for example, traded bonds/ debentures, over the counter derivatives). The fair value in this hierarchy is determined using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.

(c) Level 3: If one or more of the significant Inputs is not based on observable market data, the instrument is included in level 3. Fair values are determined in whole or in part using a valuation model based on assumptions that are neither supported by prices from observable current market transactions in the same instrument nor are they based on available market data. Financial instruments such as unlisted equity shares, loans are included in this hierarchy.

d) Inter level transfers:

There are no transfers between levels 1 and 2 as also between levels 2 and 3 during the year.

e) Valuation technique used to determine fair value

Specific valuation techniques used to value financial instruments include:

- the use of quoted market prices for the equity instruments;

- the fair value of interest rate swaps is calculated as the present value of the estimated future cash flows based on observable yield curves;

- the fair value of non convertible debentures is valued using FIMMDA guidelines;

- the fair value for the cross currency swaps/principal swap is determined using forward exchange rates at the balance sheet date;

- the fair value of certain unlisted shares are determined based on the income approach or the comparable market approach. For these unquoted investments categorised under Level 3, their respective cost has been considered as an appropriate estimate of fair value because of a wide range of possible fair value measurements and cost represents the best estimate of fair value within that range;

- the fair value of the remaining financial instruments is determined using the discounted cash flow analysis.

f) Reconciliations of level 3 fair values

The following table shows reconciliation from the opening balances to closing balances for Level 3 fair values:

Note 7 : Financial risk management Risk management framework

The Company’s Board of Directors has the overall responsibility for the establishment and oversight of the Company’s risk management framework. The Board of Directors has established a Risk Management Committee, which is responsible for developing and monitoring the Company’s risk management policies. The Committee reports regularly to the Board of Directors on its activities.

The Company’s risk management policies are established to identify and analyse the risk faced by the Company, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Company’s activities. The Company’s Audit Committee oversees how management monitors compliance with the Company’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Company. The Audit Committee is assisted in its oversight role by the internal audit team. The internal audit team undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the audit committee.

The Company has exposure to the following risks arising from financial instruments:

- Credit risk;

- Liquidity risk;

- Market risk

a) Credit risk

Credit risk arises from the possibility that customers or counterparty to financial instruments may not be able to meet their obligations. To manage this, the Company periodically assesses the financial reliability of customers, taking into account the financial condition, current economic trends, analysis of historical bad debts and ageing of accounts receivable. Credit risks arises from cash and cash equivalents, deposits with banks, financial institutions and others, as well as credit exposures to customers, including outstanding receivables.

The Company’s policy is to place cash and cash equivalents and short term deposits with reputable banks and financial institutions.

The Company has established a credit policy under which each new customer is analysed individually for creditworthiness before entering into contract. Credit limits are established for each customer, reviewed regularly and any sales exceeding those limits require approval from the appropriate authority. There are no significant concentrations of credit risk within the Company.

b) Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Company’s approach to managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to Company’s reputation.

Management monitors rolling forecasts of the Company’s liquidity position and cash and cash equivalents on the basis of expected cash flows to ensure it has sufficient cash to meet operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities at all times so that the Company does not breach borrowing limits or covenants on any of its borrowing facilities, Such forecasting takes into consideration the Company’s debt financing plans, covenant compliance and compliance with internal statement of financial position ratio targets.

i) Financing arrangements

The Company had access to the following undrawn borrowing facilities at the end of the reporting period:

The bank overdraft facilities may be drawn at anytime by the Company. There were no bank loan facilities available as on March 31, 2018 (Previous Year - the bank loan facilities were available upto July 31, 2017 and had a maturity of 18 months from drawdown).

The breakup of the borrowings into fixed and floating interest rates is as follows:

ii) Maturities of financial liabilities

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual redemption premium payments on low coupon debentures.

iii) Capital Risk Management

The Company manages its capital to ensure that it will be able to continue as a going concern. The structure is managed to maintain an investment grade credit rating, to provide ongoing returns to shareholders and to service debt obligations, whilst maintaining maximum operational flexibility.

Consistent with others in the industry, the Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by Equity. Net debt is calculated as total borrowings (including ‘current and non-current term loans’ as shown in the balance sheet) less cash and cash equivalents.

c) Market risk

Market risk is the risk that the changes in market prices such as foreign exchange rates, interest rates and equity prices will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return.

The Company uses derivatives to manage its exposure to foreign currency risk and interest rate risk. All such transactions are carried out within the guidelines set by the risk management committee.

i) Foreign Currency risk

The predominant currency of the Company’s revenue and operating cash flows is Indian Rupee {INR). The Company’s reported debt has an exposure to borrowings held in US Dollars. Further, the Company has foreign currency exposure for its investments (equity and shareholder’s loan) in its international subsidiaries. Movements in foreign exchange rates can affect the Company’s reported profit, net assets.

The Company’s investment in foreign subsidiaries is offset partially by US Dollar denominated derivative instruments and bank loan which mitigates the foreign currency risk arising from the subsidiary’s net assets.

The Company uses interest rate swaps and currency swaps to hedge its exposure in foreign currency and interest rates. The information on derivative instruments is as follows:-


For the year ended March 31, 2018 and March 31, 2017, every 3% depreciation in the exchange rate between the Indian rupee and US dollar, shall reduce the Company’s profit before tax by approximately 15.88% and 14.72% respectively and every 3% increase in the interest rate shall reduce / (increase) the Company’s profit before tax by approximately 9.92% and 5.82% respectively.

For the year ended March 31, 2018 and March 31, 2017, every 3% appreciation in the exchange rate between the Indian Rupee and US Dollar, shall increase the Company’s profit before tax by approximately 1.00% and 3.96% respectively and every 3% decrease in the interest rate shall increase / (reduce) the Company’s profit before tax by approximately (9.10)% and (4.94)% respectively.


For the year ended March 31, 2018 and March 31, 2017, every 3% depreciation / appreciation in the exchange rate between the Indian Rupee and US Dollar, shall affect the Company’s profit before tax by approximately 0.04% and 2.03% respectively.

ii) Interest rate risk

The Company adopts a policy to hedge the interest rate movement in order to mitigate the risk with regards to floating rate linked loans based on the market outlook on interest rates. This is achieved partly by entering into fixed rate instruments and partly by borrowing at a floating rate and using interest rate swaps as hedges of the variability in cash flows attributable to interest rate risk.

The total borrowing at variable rate was Rs. 50.00 crores as at March 31, 2018 (Previous Year - Rs. 125.36 crores). The carrying value of the long term debt approximates fair value since the current interest rate approximates the market rate.

iii) Other market price risks

The Company’s exposure to equity securities price risk arises from investments held by the Company and classified in the balance sheet as fair value through Other Comprehensive Income. If the equity prices of quoted investments are 3% higher/ lower, the Other Comprehensive Income for the year ended March 31, 2018 would increase/ decrease by 31.16% (for the year ended March 31, 2017: increase/ decrease by 6.76 %).

Note 8 : Employee Benefits

(a) The Company has recognised the following expenses as defined contribution plan under the head “Company’s Contribution to Provident Fund and Other Funds” (net of recoveries):

(b) The Company operates post retirement defined benefit plans as follows

a. Funded:

i. Provident Fund

ii. Post Retirement Gratuity

iii. Pension to Employees - Post retirement minimum guaranteed pension scheme for certain categories of employees, which is funded by the Company and the employees.

b. Unfunded:

i. Pension to Executive Directors and Employees - Post retirement minimum guaranteed pension scheme for select existing and retired executive directors and certain categories of employees, which is unfunded.

ii. Post Employment Medical Benefits to qualifying employees.

(c) Provident Fund:

The Company operates Provident Fund Scheme through a trust - ‘Indian Hotels Company Limited Employees Provident Fund Trust’ (‘the Plan’), set up by the Company and for certain categories contributions are made to State Plan.

The Plan guarantees minimum interest at the rate notified by the Provident Fund Authorities. The contribution by the employer and employee together with the interest accumulated thereon are payable to employees at the time of separation from the Company or retirement, whichever is earlier. The benefit vests immediately on rendering of the services by the employee. In terms of the guidance note issued by the Institute of Actuaries of India for measurement of provident fund liabilities, the actuary has provided a valuation of provident fund liability and based on the assumptions provided below, there is no shortfall as at March 31, 2018 and March 31, 2017.

The Company contributed Rs. 9.98 crores and Rs. 9.80 crores towards provident fund to the Plan during the year ended March 31, 2018 and March 31, 2017 respectively and the same has been recognised in the statement of profit and loss.

(d) Pension Scheme for Employees:

The Company has formulated a funded pension scheme for certain employees. The actuarial liability arising on the above, after allowing for employees’ contribution is determined as at the year end, on the basis of uniform accrual benefit, with demographic assumptions taken as Nil.

(e) The above defined benefit plans typically expose the Company to actuarial risks such as: investment risk, interest rate risk, longevity risk and salary risk.

The Company, on a review of its foreign operations had, in the past, made voluntary disclosures to the appropriate regulator, of what it considered to be possible irregularities, in relation to foreign exchange transactions relating to the period prior to 1998. Arising out of such disclosures, the Company received show cause notices and the Company had replied to the notices. During the year, the Company has received adjudication cum demand of Rs. 10.89 crores on certain matters which has been disputed by the Company. This has been disclosed as Contingent Liability. For the balance Show Cause Notices, adjudication proceedings are in progress.

Note 9 : Segment Information

Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-maker. The Managing Director and Chief Executive Officer who is responsible for allocating resources and assessing performance of the operating segments, has been identified as the chief operating decision-maker. From the internal organisation of the Company’s activities and consistent with the internal reporting provided to the chief operating decision-maker and after considering the nature of its services, the ultimate customer availing those services and the methods used by its to provide those services, “Hotel Services” has been identified to be the Company’s sole operating segment. Hotel Services include “Revenue from Operations” including Management and Operating Fees where hotels are not owned or leased by the Company. The organisation is largely managed separately by property based on centrally driven policies and the results and cash flows of the period, financial position as of each reporting date aggregated for the assessment by the Managing Director and Chief Executive Officer. The Company’s management reporting and controlling systems principally use accounting policies that are the same as those described in Note 2 in the summary of significant accounting policies under Ind AS. As the Company is engaged in a single operating segment, segment information that has been tabulated below is Company-wide:


Non-current assets exclude financial assets, deferred tax assets, post-employment benefit assets and rights under insurance contracts.

No single customer contributes more than 10% or more of the Company’s total revenue for the years ended March 31, 2018 and March 31, 2017.

Note 10: Earnings Per Share (EPS):

Earnings Per Share is calculated in accordance with Ind AS 33 - ‘Earnings Per Share’.

i) Guarantees/ Letters of Comfort given by the Company in respect of loans obtained by other companies and outstanding as on March 31, 2018 - Rs. 404.23 crores (Previous Year - Rs. 420.29 crores). Out of this, counter indemnity for Rs. 116.77 crores (Previous Year - Rs. 122.31 crores) has been obtained from a JV partner for his 50% share.

ii) The Company has given letters of support to select subsidiaries, a joint venture and an associate during the year.

Dividends paid during the year ended March 31, 2018 out of Retained Earnings was Rs. 0.35 per equity share for the year ended March 31, 2017.

The dividends declared by the Company are based on the profits available for distribution as reported in the standalone financial statements of the Company. Accordingly, the retained earnings reported in these financial statements may not be fully distributable. As of March 31, 2018, retained earnings not transferred to reserves available for distribution was Rs. 411.84 crores.

On May 25, 2018, the Board of Directors of the Company have proposed a final dividend ofRs. 0.40 per equity share in respect of the year ended March 31, 2018, subject to the approval of shareholders at the Annual General Meeting. If approved, the dividend would result in a cash outflow of Rs. 57.35 crores, inclusive of dividend distribution tax of Rs. 9.78 crores.

Note 11: Other Notes

Previous Year’s financial statements were audited by a firm of Chartered Accountants other than B S R & Co. LLP.