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149

FORTUNE PARK HOTELS LIMITED

REPORT OF THE BOARD OF DIRECTORS FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 2019

1. YourDirectorssubmittheirReportforthefinancialyearended31stMarch,2019.

2. FINANCIAL PERFORMANCE

Duringtheyear,yourCompanyrecordedanOperatingIncomeof̀ 2,766.60lakhs(previousyear:`2,588.03lakhs)registeringanincreaseof7%.TheOtherIncomeoftheCompanywas`231.36lakhs(previousyear:`171.28lakhs).Profitfortheyearwas`661.09lakhs(previousyear:`192.97lakhs).

ThefinancialresultsofyourCompany,summarised,areasunder:

For the year ended 31st

March, 2019(` in lakhs)

Fortheyearended31st

March,2018(`inlakhs)

Profits

a. ProfitBeforeTax 935.79 367.23

b. Less:TaxExpense

CurrentTax

DeferredTax

272.00

2.70

236.28

(62.02)

c. Profitfortheyear 661.09 192.97

d. OtherComprehensiveIncome 1.83 11.66

e. TotalComprehensiveIncome 662.92 204.63

Statement of Retained Earnings

a. Atthebeginningoftheyear 2,213.17 2,076.24

b. Add:Profitfortheyear 661.09 192.97

c. Add:OtherComprehensiveIncome 1.83 11.66

d. Less:

-DividendPaid

-IncomeTaxonDividendPaid

56.25

11.56

56.25

11.45

e. Attheendoftheyear 2,808.28 2,213.17

3. DIVIDEND

The Board of Directors of the Company have recommended a dividend of`12.50(previousyear:`12.50)perEquityShareof`10/-each,fortheyearended31stMarch,2019.Totalcashoutflowinthisregardwillbe`67.81lakhsincludingDividendDistributionTaxof`11.56lakhs.

4. OPERATIONAL PERFORMANCE

YourCompany,whichcaters to the ‘Mid-market toUpscale’ segment throughachainofFortunehotels,continuestoforgenewalliancesandexpanditsfootprint.Currently,theCompanyhasanaggregateinventoryofnearly4,000roomsspreadover53propertiesofwhich47areoperatinghotels.Ofthebalance6properties,1hotelisslatedtobecommissionedintheensuingyearand5hotelprojectsareinvariousstagesofdevelopment.

TheCompanyhasestablished‘Fortune’asthepremier‘value’brandintheIndianhospitalitysector.Thebrandremainsafrontrunnerinitsoperatingsegmentandiswellpositionedtosustainitsleadershippositionintheindustry.

Duringtheyear,theCompanybaggedthe‘Today’sTravellerAward2018’aswellasthe‘HospitalityIndiaTravelAward2018’inthe‘BestPremierClassBusinessHotelChain’category.Itwasalsoawardedthe‘VersatileExcellenceTravelAward(VETA)2018’inthe‘BestBusinessHotelChain’categorybyTravelscapes.

5. DIRECTORS AND KEY MANAGERIAL PERSONNEL

(a) Changes in Directors and Key Managerial Personnel during the year

During the year under review, there were no changes in the compositionoftheBoardofDirectors(‘theBoard’)andKeyManagerialPersonneloftheCompany.

(b) Retirement by Rotation

In accordance with the provisions of Section 152 of the Companies Act,2013(‘theAct’)andArticles143and144oftheArticlesofAssociationoftheCompany,Mr.NakulAnand(DIN:00022279),Director,willretirebyrotationattheensuingAnnualGeneralMeeting(‘AGM’)oftheCompany,andbeingeligible,offershimselfforre-appointment.YourBoardhasrecommendedhisre-appointment.

6. BOARD AND BOARD COMMITTEES

TheCompanyhastwoBoardCommitteesanditspresentcompositionisasfollows:

A. Corporate Social Responsibility Committee

Mr.N.Anand – Chairman

Mr.J.Singh – Member

Mr.SamirMC – Member

B. New Alliance Approval Committee

Mr.J.Singh – Member

Mr.SamirMC – Member

FourmeetingsoftheBoardwereheldduringtheyearended31stMarch,2019.

7. DIRECTORS’ RESPONSIBILITY STATEMENT

AsrequiredunderSection134oftheAct,yourDirectorsconfirmhaving:

i) followedinthepreparationoftheAnnualAccounts,theapplicableAccountingStandardswithproperexplanationrelatingtomaterialdepartures,ifany;

ii) selected suchaccountingpolicies andapplied themconsistently andmadejudgmentsandestimatesthatarereasonableandprudentsoastogiveatrueandfairviewofthestateofaffairsoftheCompanyattheendofthefinancialyearandoftheprofitoftheCompanyforthatperiod;

iii) takenproperandsufficientcareforthemaintenanceofadequateaccountingrecords in accordance with the provisions of the Act for safeguarding theassets of the Company and for preventing and detecting fraud and otherirregularities;

iv) preparedtheAnnualAccountsonagoingconcernbasis;and

v) devised proper systems to ensure compliance with the provisions of allapplicablelawsandthatsuchsystemsareadequateandoperatingeffectively.

8. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

TheCompanydoesnothaveanysubsidiary,associateorjointventure.

9. PARTICULARS OF EMPLOYEES

The details of employee(s) drawing remunerationmore than the limit specifiedin Rule 5(2) of the Companies (Appointment and Remuneration ofManagerialPersonnel)Rules,2014alongwiththedetailsoftoptenemployeesoftheCompanyintermsofremunerationdrawn,asrequiredunderthesaidRule,areprovidedinAnnexure 1tothisReport.

The Company seeks to enhance equal opportunities for men and women andis committed to a gender-friendly workplace. Your Company has an InternalComplaints Committee as per the provisions of Sexual Harassment of Womenat Workplace (Prevention, Prohibition and Redressal) Act, 2013 and the Rulesthereunder.Duringtheyear,nocomplaintforsexualharassmentwasreceived.

10. RISK MANAGEMENT

Theriskmanagement frameworkof theCompany iscommensuratewith its sizeandnatureofbusiness.Managementofrisksvestswiththeexecutivemanagementwhich is responsible for the day-to-day conduct of the affairs of the Company,within the overall framework approved by the Board. The Internal AuditDepartmentofITCLimitedperiodicallycarriesout,attherequestoftheCompany,riskfocusedauditswiththeobjectiveofidentifyingareaswhereriskmanagementprocessescouldbestrengthened.TheBoardannuallyreviewstheeffectivenessoftheCompany’sriskmanagementsystemsandpolicies.

11. INTERNAL FINANCIAL CONTROLS

YourCompanyhasinplaceadequateinternalfinancialcontrolswithrespecttothefinancialstatements,commensuratewithitssizeandscaleofoperations.TheBoardwhichprovidesguidanceoninternalcontrols,alsoreviewsinternalauditfindingsandimplementationofinternalauditrecommendations.

During the year, the internal financial controls in theCompanywith respect tothefinancial statementswere tested andnomaterialweakness in thedesignoroperationofsuchcontrolswasobserved.Nonetheless,yourCompanyrecognisesthatany internalfinancialcontrol framework,nomatterhowwelldesigned,hasinherentlimitationsandaccordingly,regularauditandreviewprocessesensurethatsuchsystemsarereinforcedonanongoingbasis.

12. CORPORATE SOCIAL RESPONSIBILITY (CSR)

TheAnnualReportonCSRactivitiesoftheCompanyintermsofSection135oftheActreadwiththeCompanies(CorporateSocialResponsibilityPolicy)Rules,2014isenclosedasAnnexure 2tothisReport.

13. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

Duringtheyearended31stMarch,2019,theCompanyhasneithergivenanyloanorguaranteenorhasmadeanyinvestmentunderSection186oftheAct.

14. RELATED PARTY TRANSACTIONS

Duringtheyearended31stMarch,2019,theCompanyhasneitherenteredintoanycontractorarrangementwithitsrelatedpartieswhichisnotatarm’slengthnorhastheCompanyenteredintoanymaterialcontractorarrangementwiththem,intermsofSection188oftheAct.

15. SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS / COURTS / TRIBUNALS

Duringtheyearunderreview,nosignificantormaterialorderswerepassedbytheRegulators/Courts/TribunalsimpactingthegoingconcernstatusoftheCompanyanditsfutureoperations.

16. EXTRACT OF ANNUAL RETURN

The extract of Annual Return in theprescribed FormNo.MGT-9 is enclosed asAnnexure 3 tothisReport.

150


Annexure 1 to the Report of the Board of Directorsfor the financial year ended on 31st March, 2019

[Information pursuant to Rules 5(2) and 5(3) of the Companies (Appointment and Remuneration of Managerial personnel) Rules, 2014]

Names of Employees Age Designation Gross Remuneration

(`)

Net Remuneration

(`)

Qualifications Experience (Years)

Date of Commencement of employment /

deputation

Previous Employment / Position held

1 2 3 4 5 6 7 8 9

SamirMecherivalappilChandrasekharan*

43 ManagingDirector 1,82,30,195/- 91,37,050/- MBA,DiplomainHotelManagement

23 16.10.2017 ITCLimited,ExecutiveVicePresident

DhananjaySaliankar* 54 Head-Sales&Marketing

59,74,946/- 31,25,432/- B.A.(Economics) 28 01.12.2017 ITCLimited,GeneralManager–Sales&Marketing

JugalKishoreBatra* 48 VicePresident–Finance

51,74,486/- 25,66,240/- M.Com,ACA 23 10.11.2016 ITCLimited,ManagerFinance–Projects

RajKamalChopra* 53 CorporateChef 39,38,837/- 19,71,425/- B.Com(P),DiplomainHotelManagement

32 01.04.2013 ITCLimited,ExecutiveChef

RajendraAJGLouzado 58 GeneralManager–OperationsSupport

37,06,877/- 21,14,417/- DiplomainHotelManagement

37 17.03.2008 PrismPropertiesPrivateLimited,Manager

PPSrivastava* 59 EHSManager 33,65,311/- 16,14,147/- B.E. 37 11.07.2015 ITCLimited,ChiefEngineer

KovidSharma* 41 Head-HumanResources

33,33,842/- 19,61,101/- B.Sc.(Hons.)Statistics,MastersinIR&HRM

18 15.09.2017 ITCLimited–Manager–HumanResource

SaravananDhanabalu 46 GeneralManager 32,29,285/- 23,88,887/- PGCourseinFacilityManagement,B.Sc.(ComputerScience)

25 05.09.2007 AuromatrixHotelsPrivateLimited,Manager

RohitMalhotra# 62 VicePresident–Operations

32,17,107/- 18,03,270/- B.Sc.,DiplomainHotelManagement

41 01.01.2017 ITCLimited,GeneralManager

AjayJoginderlalSharma 52 GeneralManager 31,99,645/- 23,64,783/- DiplomainHotelManagement

31 19.05.2015 ElixirEnterprisesandHotelsPrivateLimited,Manager

*OndeputationfromITCLimited,theHoldingCompany(ITC).#Fixedtermcontractcompletedon31stDecember,2018.

Notes:

a. Grossremunerationincludessalary,variablepay,allowances&otherbenefits/applicableperquisitesexceptprovisionsforgratuityandleaveencashmentwhichareactuariallydeterminedonanoverallCompanybasis.Theterm‘remuneration’hasthemeaningassignedtoitundertheCompaniesAct,2013.

b. Netremunerationcomprisescashincomelessincometax&educationcessdeductedatsourceandemployee’sowncontributiontoprovidentfund.

c. CertainemployeesondeputationfromITChavebeengrantedStockOptionsbyITCinpreviousyear(s)underitsEmployeeStockOptionSchemesat‘marketprice’[withinthemeaningoftheSecuritiesandExchangeBoardofIndia(ShareBasedEmployeeBenefits)Regulations,2014].ITChasalsograntedEmployeeStockAppreciationLinkedRewardUnits(ESARUnits)tocertainemployeesunderitsStockAppreciationLinkedRewardPlan.SincetheseStockOptionsandESARUnitsarenottradeable,noperquisiteorbenefitisimmediatelyconferredupontheemployeesbygrantofsuchOptions/Units,andaccordinglythesaidgranthasnotbeenconsideredasremuneration.

d. Allappointments(exceptdeputedemployees)are/werecontractualinaccordancewithtermsandconditionsasperCompany’srules.

e. TheaforesaidemployeesareneitherrelativeofanyDirectornorholdanyequityshareintheCompany.

On behalf of the Board

Dated : 23rd April, 2019 Samir M C Managing Director Place : Gurugram J. Singh Director

17. COST RECORDS

TheCompanyisnotrequiredtomaintaincostrecordsintermsofSection148oftheActreadwiththeCompanies(CostRecordsandAudit)Rules,2014.

18. STATUTORY AUDITORS

TheCompany’s Auditors,Messrs. PriceWaterhouse LLP,CharteredAccountants,whowereappointedwithyourapprovalatthe19thAGMforaperiodoffiveyears,willcompletetheirpresenttermonconclusionofthe24thAGMoftheCompany.

TheBoardhasrecommendedfortheapprovaloftheMembers,theappointmentofMessrs.SRBC&COLLP,CharteredAccountants(‘SRBC’),astheAuditorsoftheCompanyforaperiodoffiveyearsfromtheconclusionoftheensuing24thAGMtill theconclusionofthe29thAGM.SRBChavegiventheirconsenttoactastheAuditorsoftheCompanyandhaveconfirmedthatthesaidappointment,ifmade,willbeinaccordancewithSection139and141oftheAct.TheBoardhasalso recommendedfor theapprovalof theMembers, theremunerationofSRBCforthefinancialyear2019-20.AppropriateresolutionseekingyourapprovaltotheappointmentandremunerationofSRBCastheAuditorsisappearingintheNoticeconveningtheensuingAGMoftheCompany.

19. COMPLIANCE WITH SECRETARIAL STANDARDS

TheCompany is in compliancewith the applicable Secretarial Standards issuedby the Institute of Company Secretaries of India and approved by the CentralGovernmentunderSection118oftheAct.

20. CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION, FOREIGN EXCHANGE EARNINGS AND OUTGO

Conservation of Energy & Technology Absorption

ConsideringthenatureofbusinessofyourCompany,nocommentisrequiredonconservationofenergyandtechnologyabsorption.

Foreign Exchange Earnings and Outgo

During the year under review, there has beenno foreign exchange earnings oroutflow.


Dated : 23rd April, 2019 Samir MC Managing DirectorPlace : Gurugram J. Singh Director

151


Annexure 2 to the Report of the Board of DirectorsAnnual Report on CSR Activities of the Company for the financial year ended 31st March, 2019

[Section 135 of the Companies Act, 2013 read with the Companies (Corporate Social Responsibility Policy) Rules, 2014]

1. AbriefoutlineoftheCompany’sCSRPolicyincludingoverviewofprojectsorprogramsproposedtobeundertaken

TheCompany,awhollyownedsubsidiaryofITCLimited(ITC),dischargesitscorporatesocialresponsibilities(CSR)byaligningitselfwiththeCSRPolicyofITC.

TheCompanyundertakesitsCSRactivities:

l aslistedinScheduleVIItotheCompaniesAct,2013,inlinewiththeCSRinitiativesof ITCandasapprovedbytheCSRCommitteeoftheCompany;

l directlyorthrougharegisteredtrustoraregisteredsocietyoracompanyestablished underSection8oftheCompaniesAct,2013.

TheCompanymaycollaboratewithITCorothercompaniesforundertakingCSRactivities.

2. CompositionofCSRCommittee Mr.N.Anand(Chairman)Mr.SamirMCMr.J.Singh

3. AveragenetprofitoftheCompanyforlastthreefinancialyears ` 8,18,34,174/-

4. PrescribedCSRexpenditure(twopercentoftheamountstatedunder3above) ` 16,36,684/-

5. DetailsofCSRspentduringthefinancialyear2018-19

Totalamountspentforthefinancialyear ` 16,37,000/-

TotalAmountunspent NIL

Mannerinwhichtheamountspentduringthefinancialyear2018-19isdetailedbelow:

CSR Project or activity identified

Sector in which the project is covered

Projects or programs(1) Local area or other(2) Specify the State and district

where projects or programs was undertaken

Amount outlay (Budget) project or program wise

Amount spent on the projects or programsSub heads:1. Direct expenditure on

projects or programs2. Overheads

Cumulative expenditure upto the reporting period

Amount spent:Direct or through implementing agency

ContributiontoITCRuralDevelopmentTrust

Undertaking rural developmentprojects[coveredunderClause(x)ofScheduleVII to theCompaniesAct,2013]

N.A. ` 16,37,000/- ` 16,37,000/- ` 16,37,000/- Implementing Agency - ITC RuralDevelopmentTrust,Kolkata

6. TheCSRCommitteeoftheBoardhasconfirmedthattheimplementationandmonitoringoftheCSRPolicyisincompliancewiththeCSRobjectivesandPolicyoftheCompany.


Dated : 23rd April, 2019 N. Anand Samir MC J. SinghPlace : Gurugram Chairman - CSR Committee Managing Director Director

Annexure 3 to the Report of the Board of DirectorsFORM NO. MGT-9

EXTRACT OF ANNUAL RETURNas on the financial year ended on 31st March, 2019

[Pursuant to Section 92(3) of the Companies Act, 2013 and Rule 12(1) of the Companies (Management and Administration) Rules, 2014]

I. REGISTRATION AND OTHER DETAILS

i) CIN : U55101HR1995PLC052281ii) RegistrationDate : 26thJuly,1995iii) NameoftheCompany : FortuneParkHotelsLimitediv) Category/Sub-CategoryoftheCompany : UnlistedPublicCompanylimitedbysharesv) AddressoftheRegisteredofficeandcontactdetails : ITCGreenCentre

10,InstitutionalAreaSector32,Gurugram-122001Phone:01244171717e-mail:[email protected]

vi) Whetherlistedcompany(Yes/No) : Novii) Name,AddressandContactdetailsofRegistrarandTransferAgent,ifany : N.A.

II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY Allthebusinessactivitiescontributing10%ormoreofthetotalturnoveroftheCompanyshallbestated:-

Sl. No.

Name and Description of main products / services NIC Code of the product/ service % to total turnover of the Company

1. Hotelservices 55101 100%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl. No.

Name and Address of the Company

CIN/GLN Holding/ Subsidiary/ Associate % of shares held in the Company Applicable Section

1. ITCLimitedVirginiaHouse37JawaharlalNehruRoadKolkata–700071

L16005WB1910PLC001985 Holdingcompany 100% 2(46)

152


IV. SHAREHOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)

(i) Category-wise Shareholding:

Category of ShareholdersNo. of Shares held at the beginning of the year No. of Shares held at the end of the year

% Change during the year

Demat Physical Total % of Total Shares

Demat Physical Total % of Total Shares

A. Promoters

(1) Indian a)Individual/HUFb)CentralGovt.c)StateGovt.(s)d)BodiesCorp.e)Banks/FIf)AnyOther

––––––

–––

4,50,008––

–––

4,50,008––

–––

100.00––

––––––

–––

4,50,008––

–––

4,50,008––

–––

100.00––

N.A.N.A.N.A.Nil

N.A.N.A.

Sub-total (A)(1) – 4,50,008 4,50,008 100.00 – 4,50,008 4,50,008 100.00 Nil

(2) Foreign a)NRIs-Individualsb)Other–Individualsc)BodiesCorp.d)Banks/FIe)AnyOther

–––––

–––––

–––––

–––––

–––––

–––––

–––––

–––––

N.A.N.A.N.A.N.A.N.A.

Sub-total (A)(2) – – – – – – – – N.A.

Total Shareholding of Promoter (A) = (A)(1)+(A)(2) – 4,50,008 4,50,008 100.00 – 4,50,008 4,50,008 100.00 Nil

B. Public Shareholding

1. Institutions a)MutualFundsb)Banks/FIc)CentralGovt.d)StateGovt.(s)e)VentureCapitalFundsf)InsuranceCompaniesg)FIIsh)ForeignVentureCapitalFundsi)Others(specify)

–––––––––

–––––––––

–––––––––

–––––––––

–––––––––

–––––––––

–––––––––

–––––––––

N.A.N.A.N.A.N.A.N.A.N.A.N.A.N.A.N.A.

Sub-total (B)(1): – – – – – – – – N.A.

2. Non-Institutions a)BodiesCorp.

i)Indianii)Overseas

b)Individualsi)Individualshareholdersholdingnominalsharecapitalupto`1lakh

ii)Individualshareholdersholdingnominalsharecapitalinexcessof`1lakh

c)Others(specify)

–––

–

–––

–

–––

–

–––

–

–––

–

–––

–

–––

–

–––

–

N.A.N.A.N.A.

N.A.

Sub-total (B)(2) – – – – – – – – N.A.

Total Public Shareholding (B)=(B)(1)+ (B)(2) – – – – – – – – N.A.

C. Shares held by Custodian for GDRs & ADRs – – – – – – – – N.A.

Grand Total (A+B+C) – 4,50,008 4,50,008 100.00 – 4,50,008 4,50,008 100.00 Nil

(ii) Shareholding of Promoters:

Sl. No.

Shareholder’s Name

Shareholding at the beginning of the year Shareholding at the end of the year

% change in shareholding

during the yearNo. of Shares % of total Shares of the Company

% of Shares pledged /

encumbered to total Shares

No. of Shares % of total Shares of the Company

% of Shares pledged /

encumbered to total Shares

1. ITCLimited 4,50,008 100.00 Nil 4,50,008 100.00 Nil Nil

(iii) Change in Promoters’ Shareholding (please specify, if there is no change):

Sl. No.

Shareholding at the beginning of the year Cumulative Shareholding during the year



Atthebeginningoftheyear

No change during the yearDatewiseIncrease/DecreaseinPromotersShareholdingduringtheyear

Attheendoftheyear

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs):NOTAPPLICABLE(v) Shareholding of Directors and Key Managerial Personnel:NoneoftheDirectorsandKeyManagerialPersonnelholdanyshareintheCompanyintheirindividualcapacity.

153


V. INDEBTEDNESS

Indebtedness of the Company including interest outstanding / accrued but not due for payment: NIL

VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL A. Remuneration to Managing Director, Whole-time Directors and/or Manager: (Amountin`)

Sl. No. Particulars of Remuneration

Samir MC(Managing Director)

(refer Note 1)

1. GrossSalary

(a)SalaryasperprovisionscontainedinSection17(1)oftheIncome-taxAct,1961 1,56,53,532

(b)ValueofperquisitesunderSection17(2)oftheIncome-taxAct,1961 19,12,643

(c)ProfitsinlieuofsalaryunderSection17(3)oftheIncome-taxAct,1961 –

2. StockOption –

3. SweatEquity –

4. Commission-as%ofprofit-others,specify

–

5. Others,pleasespecify –

Total Amount (A) 1,75,66,175

Ceiling as per the Companies Act, 2013 >84,00,000 per annum(refer Note 2)

Note 1: Mr. Samir MC is on deputation from ITC Limited (ITC) and has been granted Employee Stock Appreciation Linked Reward Units (ESAR Units) by ITC under its Stock Appreciation Linked Reward Plan. Since these ESAR Units are not tradeable, no perquisite or benefit is conferred upon the employee by grant of such Units, and accordingly the said grant has not been considered as remuneration.

Note 2: Ceiling as per Part II of Schedule V to the Companies Act, 2013 has been disclosed, considering that the profits of the Company for the financial year ended 31st March, 2019 are inadequate. The appointment of Mr. Samir MC is governed by the resolution passed by the Board and the shareholders of the Company. The statutory provisions apply with respect to notice period and severance fee.

B. Remuneration to other Directors: (Amountin`)

Sl. No. Name of Directors

Particulars of Remuneration Total Amount

Fee for attending Board and Board Committee meetings

Commission

1. Other Non - Executive Directors

N. Anand Nil Nil Nil

J. Singh

Total Amount (B) Nil

Total Managerial Remuneration (A+B) 1,75,66,175

OverallceilingaspertheCompaniesAct,2013 >84,00,000 per annum(refer Note)

Note: Ceiling as per Part II of Schedule V to the Companies Act, 2013 has been disclosed, considering that the profits of the Company for the financial year ended 31st March, 2019 are inadequate.

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD: NOTAPPLICABLE

VII. PENALTIES / PUNISHMENT / COMPOUNDING OF OFFENCES against the Company, Directors and other Officers in Default under the Companies Act, 2013: None


Dated : 23rd April, 2019 Samir MC Managing Director

Place : Gurugram J. Singh Director

154


INDEPENDENT AUDITOR’S REPORT

TO THE MEMBERS OF FORTUNE PARK HOTELS LIMITED

Report on the audit of the Financial Statements

Opinion

1. WehaveauditedtheaccompanyingfinancialstatementsofFortuneParkHotelsLimited(“theCompany”),whichcomprisethebalancesheetasatMarch31,2019,andthestatementofProfitandLoss((includingOtherComprehensiveIncome),statementofchangesinequityandstatementof cash flows for the year then ended, and notes to the financialstatements,includingasummaryofsignificantaccountingpoliciesandotherexplanatoryinformation.

2. Inouropinionandtothebestofourinformationandaccordingtotheexplanations given to us, the aforesaid financial statements give theinformation required by the Companies Act, 2013 (“the Act”) in themannersorequiredandgiveatrueandfairviewinconformitywiththeaccountingprinciplesgenerallyacceptedinIndia,ofthestateofaffairsoftheCompanyasatMarch31,2019,andtotalcomprehensiveincome(comprising of profit and other comprehensive income), changes inequityanditscashflowsfortheyearthenended.

Basis for opinion

3. WeconductedourauditinaccordancewiththeStandardsonAuditing(SAs)specifiedundersection143(10)oftheAct.Ourresponsibilitiesunderthose Standards are further described in the Auditor’s ResponsibilitiesfortheAuditoftheFinancialStatementssectionofourreport.Weareindependent of the Company in accordance with the Code of EthicsissuedbytheInstituteofCharteredAccountantsofIndiatogetherwiththeethical requirements thatare relevant toourauditof thefinancialstatements under the provisions of the Act and the Rules thereunder,andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththese requirements and theCodeof Ethics.Webelieve that the auditevidencewe have obtained is sufficient and appropriate to provide abasisforouropinion.

Other Information

4. The Company’s Board of Directors is responsible for the otherinformation.TheotherinformationcomprisestheinformationincludedintheDirector’sreport,butdoesnotincludethefinancialstatementsandourauditor’sreportthereon.

Our opinion on the financial statements does not cover the otherinformation andwedo not express any formof assurance conclusionthereon.

Inconnectionwithourauditofthefinancialstatements,ourresponsibilityistoreadtheotherinformationand,indoingso,considerwhethertheotherinformationismateriallyinconsistentwiththefinancialstatementsor our knowledge obtained in the audit or otherwise appears to bematerially misstated. If, based on the work we have performed, weconcludethatthereisamaterialmisstatementofthisotherinformation,wearerequiredtoreportthatfact.

Wehavenothingtoreportinthisregard.

Responsibilities of management and those charged with governance for the financial statements

5. TheCompany’sBoardofDirectorsisresponsibleforthemattersstatedin section 134(5) of the Act with respect to the preparation of thesefinancialstatementsthatgiveatrueandfairviewofthefinancialposition,financialperformance,changesinequityandcashflowsoftheCompanyinaccordancewiththeaccountingprinciplesgenerallyacceptedinIndia,includingtheAccountingStandardsspecifiedundersection133oftheActThisresponsibilityalsoincludesmaintenanceofadequateaccountingrecordsinaccordancewiththeprovisionsoftheActforsafeguardingoftheassetsoftheCompanyandforpreventinganddetectingfraudsandotherirregularities;selectionandapplicationofappropriateaccountingpolicies; making judgments and estimates that are reasonable andprudent; and design, implementation and maintenance of adequateinternal financial controls, thatwere operating effectively for ensuringtheaccuracy andcompletenessof the accounting records, relevant tothepreparationandpresentationofthefinancialstatementsthatgiveatrueandfairviewandarefreefrommaterialmisstatement,whetherduetofraudorerror.

6. In preparing the financial statements, management is responsiblefor assessing the Company’s ability to continue as a going concern,disclosing,asapplicable,mattersrelatedtogoingconcernandusingthegoing concern basis of accounting unlessmanagement either intendsto liquidate the Company or to cease operations, or has no realisticalternativebuttodoso.ThoseBoardofDirectorsarealsoresponsibleforoverseeingtheCompany’sfinancialreportingprocess.

Auditor’s responsibilities for the audit of the financial statements

7. Our objectives are to obtain reasonable assurance about whether thefinancial statements as a whole are free from material misstatement,whether due to fraud or error, and to issue an auditor’s report thatincludesouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanauditconductedinaccordancewithSAswillalwaysdetectamaterialmisstatementwhenitexists.Misstatementscanarisefromfraudorerrorandareconsideredmaterialif,individuallyor in the aggregate, they could reasonably be expected to influencethe economic decisions of users taken on the basis of these financialstatements.

8. As part of an audit in accordance with SAs, we exercise professionaljudgment andmaintain professional scepticism throughout the audit.Wealso:

• Identifyandassesstherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror,designandperformauditproceduresresponsivetothoserisks,andobtainauditevidencethatissufficientandappropriatetoprovideabasisforouropinion.Theriskofnotdetectingamaterialmisstatement resulting from fraudis higher than for one resulting from error, as fraudmay involvecollusion,forgery,intentionalomissions,misrepresentations,ortheoverrideofinternalcontrol.

• Obtain an understandingof internal control relevant to the auditin order to design audit procedures that are appropriate in thecircumstances. Under Section 143(3)(i) of the Act, we are alsoresponsible for expressing our opinion on whether the companyhasadequate internalfinancialcontrolswith reference tofinancialstatementsinplaceandtheoperatingeffectivenessofsuchcontrols.

• Evaluate the appropriateness of accounting policies used and thereasonableness of accounting estimates and related disclosuresmadebymanagement.

• Concludeontheappropriatenessofmanagement’suseofthegoingconcern basis of accounting and, based on the audit evidenceobtained, whether a material uncertainty exists related to eventsor conditions that may cast significant doubt on the Company’sabilitytocontinueasagoingconcern.Ifweconcludethatamaterialuncertaintyexists,wearerequiredtodrawattentioninourauditor’sreporttotherelateddisclosuresinthefinancialstatementsor,ifsuchdisclosuresareinadequate,tomodifyouropinion.Ourconclusionsare based on the audit evidence obtained up to the date of ourauditor’sreport.However,futureeventsorconditionsmaycausetheCompanytoceasetocontinueasagoingconcern.

• Evaluate the overall presentation, structure and content of thefinancial statements, including the disclosures, and whether thefinancial statements represent the underlying transactions andeventsinamannerthatachievesfairpresentation.

9. We communicate with those charged with governance regarding,amongothermatters, theplannedscopeand timingof theauditandsignificantauditfindings,includinganysignificantdeficienciesininternalcontrolthatweidentifyduringouraudit.

10. We also provide those charged with governance with a statementthat we have complied with relevant ethical requirements regardingindependence,andtocommunicatewiththemallrelationshipsandothermattersthatmayreasonablybethoughttobearonourindependence,andwhereapplicable,relatedsafeguards.

Report on other legal and regulatory requirements

11. As required by the Companies (Auditor’s Report) Order, 2016 (“theOrder”), issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure B astatementonthemattersspecifiedinparagraphs3and4oftheOrder,totheextentapplicable.

12. AsrequiredbySection143(3)oftheAct,wereportthat:

a) Wehavesoughtandobtainedalltheinformationandexplanationswhichtothebestofourknowledgeandbeliefwerenecessaryforthepurposesofouraudit.

b) Inouropinion,properbooksofaccountasrequiredby lawhavebeenkeptbytheCompanysofarasitappearsfromourexaminationofthosebooks.

c) TheBalanceSheet,theStatementofProfitandLoss(includingothercomprehensive income), the StatementofChanges in Equity andCashFlowStatementdealtwithbythisReportareinagreementwiththebooksofaccount.

155


d) Inouropinion,theaforesaidfinancialstatementscomplywiththeAccountingStandardsspecifiedunderSection133oftheAct.

e) On the basis of the written representations received from thedirectors as onMarch31, 2019 takenon recordby theBoardofDirectors,noneofthedirectorsisdisqualifiedasonMarch31,2019frombeingappointedasadirectorintermsofSection164(2)oftheAct.

f) WithrespecttotheadequacyoftheinternalfinancialcontrolswithreferencetofinancialstatementsoftheCompanyandtheoperatingeffectiveness of such controls, refer to our separate Report in“AnnexureA”.

g) With respect to theothermatters tobe included in theAuditor’sReport in accordance with Rule 11 of the Companies (AuditandAuditors) Rules, 2014, in our opinion and to thebest of ourinformationandaccordingtotheexplanationsgiventous:

i.TheCompanyhasdisclosedtheimpactofpendinglitigationsonitsfinancialpositioninitsfinancialstatements–ReferNote25tothefinancialstatements;

ii. TheCompany did not have any derivative contracts and inrespect of other long-term contracts there are no materialforeseeablelosses.

iii.TherewerenoamountswhichwererequiredtobetransferredtotheInvestorEducationandProtectionFundbytheCompanyduringtheyearendedMarch31,2019.

iv. Thereportingondisclosures relatingtoSpecifiedBankNotesis not applicable to the Company for the year endedMarch31,2019.

ForPriceWaterhouseCharteredAccountantsLLP

FirmRegistrationNumber:012754N/N500016

CharteredAccountants

AshokNarayanaswamy

Place:Gurugram Partner

Date:April23,2019 MembershipNumber:095665

Referredtoinparagraph12(f)oftheIndependentAuditors’ReportofevendatetothemembersofFortuneParkHotelsLimitedonthefinancialstatementsfortheyearendedMarch31,2019

Report on the Internal Financial Controls with reference to financial statements under Clause (i) of Sub-section 3 of Section 143 of the Act

1. WehaveauditedtheinternalfinancialcontrolswithreferencetofinancialstatementsofFortuneParkHotelsLimited(“theCompany”)asofMarch31,2019inconjunctionwithourauditofthefinancialstatementsoftheCompanyfortheyearendedonthatdate.

Management’s Responsibility for Internal Financial Controls

2. The Company’s management is responsible for establishing andmaintaining internal financial controls based on the internal financialcontrols with reference to financial statements criteria established bythe Company considering the essential components of internal controlstatedintheGuidanceNoteonAuditofInternalFinancialControlsOverFinancial Reporting issued by the Institute of Chartered Accountants ofIndia(ICAI).Theseresponsibilitiesincludethedesign,implementationandmaintenanceof adequate internal financial controls thatwereoperatingeffectively for ensuring theorderly andefficient conductof itsbusiness,includingadherencetocompany’spolicies,thesafeguardingofitsassets,the prevention and detection of frauds and errors, the accuracy andcompleteness of the accounting records, and the timely preparation ofreliablefinancialinformation,asrequiredundertheAct.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company’s internalfinancialcontrolswithreferencetofinancialstatementsbasedonouraudit.WeconductedourauditinaccordancewiththeGuidanceNoteonAuditofInternalFinancialControlsOverFinancialReporting(the“GuidanceNote”)and the Standards on Auditing deemed to be prescribed under section143(10)oftheActtotheextentapplicabletoanauditofinternalfinancialcontrols,bothapplicabletoanauditofinternalfinancialcontrolsandbothissuedbytheICAI.ThoseStandardsandtheGuidanceNoterequirethatwecomplywithethicalrequirementsandplanandperformtheaudittoobtainreasonableassuranceaboutwhetheradequate internalfinancial controlswithreferencetofinancialstatementswasestablishedandmaintainedandifsuchcontrolsoperatedeffectivelyinallmaterialrespects.

4. Ourauditinvolvesperformingprocedurestoobtainauditevidenceaboutthe adequacyof the internal financial controls systemwith reference tofinancialstatementsandtheiroperatingeffectiveness.Ourauditofinternalfinancialcontrolswithreferencetofinancialstatementsincludedobtaininganunderstandingofinternalfinancialcontrolswithreferencetofinancialstatements,assessingtheriskthatamaterialweaknessexists,andtestingandevaluatingthedesignandoperatingeffectivenessofinternalcontrolbasedontheassessedrisk.Theproceduresselecteddependontheauditor’sjudgement,includingtheassessmentoftherisksofmaterialmisstatementofthefinancialstatements,whetherduetofraudorerror.

5. We believe that the audit evidence we have obtained is sufficient and

Annexure A to Independent Auditor’s Report

appropriate to provide a basis for our audit opinion on theCompany’sinternalfinancialcontrolssystemwithreferencetofinancialstatements.

Meaning of Internal Financial Controls with reference to financial statements

6. Acompany’sinternalfinancialcontrolswithreferencetofinancialstatementsis a process designed to provide reasonable assurance regarding thereliabilityoffinancialreportingandthepreparationoffinancialstatementsforexternalpurposes inaccordancewithgenerallyacceptedaccountingprinciples.Acompany’sinternalfinancialcontrolswithreferencetofinancialstatementsincludesthosepoliciesandproceduresthat(1)pertaintothemaintenance of records that, in reasonable detail, accurately and fairlyreflectthetransactionsanddispositionsoftheassetsofthecompany;(2)providereasonableassurancethattransactionsarerecordedasnecessarytopermitpreparationoffinancialstatementsinaccordancewithgenerallyaccepted accounting principles, and that receipts and expenditures ofthecompanyarebeingmadeonly inaccordancewithauthorisationsofmanagementanddirectorsof thecompany;and(3)provide reasonableassurance regarding prevention or timely detection of unauthorisedacquisition,use,ordispositionofthecompany’sassetsthatcouldhaveamaterialeffectonthefinancialstatements.

Inherent Limitations of Internal Financial Controls with reference to financial statements

7. Because of the inherent limitations of internal financial controls withreferencetofinancialstatements, includingthepossibilityofcollusionorimpropermanagementoverrideof controls,materialmisstatementsduetoerrororfraudmayoccurandnotbedetected.Also,projectionsofanyevaluation of the internal financial controls with reference to financialstatements to future periods are subject to the risk that the internalfinancial control controls with reference to financial statements maybecomeinadequatebecauseofchangesinconditions,orthatthedegreeofcompliancewiththepoliciesorproceduresmaydeteriorate.

Opinion

8. In our opinion, the Company has, in allmaterial respects, an adequateinternalfinancialcontrolssystemwithreferencetofinancialstatementsandsuchinternalfinancialcontrolswithreferencetofinancialstatementswereoperatingeffectivelyasatMarch31,2019,basedontheinternalfinancialcontrolswithreferencetofinancialstatementscriteriaestablishedbytheCompanyconsideringtheessentialcomponentsofinternalcontrolstatedintheGuidanceNoteonAuditofInternalFinancialControlsOverFinancialReportingissuedbytheInstituteofCharteredAccountantsofIndia.




AshokNarayanaswamy



156


Referredtoinparagraph11oftheIndependentAuditors’Reportofeven

date to the members of Fortune Park Hotels Limited on the financial

statementsasofandfortheyearendedMarch31,2019

i. (a) The Company is maintaining proper records showing full particulars,

including quantitative details and situation, of property, plant and

equipment.

(b) The property, plant and equipment of the Company have been

physicallyverifiedbytheManagementduringtheyearandnomaterial

discrepancieshavebeennoticedonsuchverification.Inouropinion,the

frequencyofverificationisreasonable.

(c) TheCompanydoesnotownanyimmovablepropertiesasdisclosedin

Note3onproperty,plantandequipment to thefinancial statements.

Therefore, the provisions of Clause 3(i)(c) of the said Order are not

applicabletotheCompany.

ii. TheCompanyisinthebusinessofrenderingservices,andconsequently,

doesnotholdanyinventory.Therefore,theprovisionsofClause3(ii)of

thesaidOrderarenotapplicabletotheCompany.

iii. The Company has not granted any loans, secured or unsecured, to

companies,firms,LimitedLiabilityPartnershipsorotherpartiescovered

intheregistermaintainedunderSection189oftheAct.Therefore,the

provisionsofClause3(iii),(iii)(a),(iii)(b)and(iii)(c)ofthesaidOrderare

notapplicabletotheCompany.

iv. TheCompanyhasnotgrantedanyloansormadeanyinvestments,or

providedanyguaranteesorsecuritytothepartiescoveredunderSection

185and186.Therefore,theprovisionsofClause3(iv)ofthesaidOrder

arenotapplicabletotheCompany.

v. TheCompanyhasnotacceptedanydepositsfromthepublicwithinthe

meaningofSections73,74,75and76oftheActandtheRulesframed

thereundertotheextentnotified.

vi.TheCentralGovernmentofIndiahasnotspecifiedthemaintenanceof

costrecordsundersub-section(1)ofSection148oftheActforanyofthe

productsoftheCompany.

vii. (a) According to the information and explanations given to us and the

recordsoftheCompanyexaminedbyus,inouropinion,theCompanyis

regularindepositingtheundisputedstatutorydues,includingprovident

fund,employees’stateinsurance,incometax,salestax,servicetax,duty

ofcustoms,dutyofexcise,valueaddedtax,cess,goodsandservicetax

andothermaterial statutorydues, as applicable,with the appropriate

authorities.

(b) According to the information and explanations given to us and the

recordsoftheCompanyexaminedbyus,therearenoduesofincome-

tax,sales-tax,service-tax,dutyofcustoms,anddutyofexciseorvalue

addedtaxorgoodsandservicetaxwhichhavenotbeendepositedon

accountofanydispute.

viii. AstheCompanydoesnothaveanyloansorborrowingsfromanyfinancial

institutionorbankorGovernment,norhasitissuedanydebenturesasat

thebalancesheetdate,theprovisionsofClause3(viii)oftheOrderare

notapplicabletotheCompany.

ix. The Company has not raised any moneys by way of initial publicoffer, furtherpublicoffer(includingdebt instruments)andtermloans.Accordingly,theprovisionsofClause3(ix)oftheOrderarenotapplicabletotheCompany.

x. DuringthecourseofourexaminationofthebooksandrecordsoftheCompany,carriedoutinaccordancewiththegenerallyacceptedauditingpractices in India, and according to the information and explanationsgiventous,wehaveneithercomeacrossanyinstanceofmaterialfraudbytheCompanyorontheCompanybyitsofficersoremployees,noticedorreportedduringtheyear,norhavewebeeninformedofanysuchcasebytheManagement.

xi. The Company has paid/ provided for managerial remuneration inaccordancewiththerequisiteapprovalsmandatedbytheprovisionsofSection197readwithScheduleVtotheAct.

xii.AstheCompanyisnotaNidhiCompanyandtheNidhiRules,2014arenotapplicabletoit,theprovisionsofClause3(xii)oftheOrderarenotapplicabletotheCompany.

xiii. The Company has entered into transactions with related parties incompliancewiththeprovisionsofSection188of theAct. Thedetailsof such relatedparty transactionshavebeendisclosed in thefinancialstatementsasrequiredunderIndianAccountingStandard(IndAS)24,RelatedPartyDisclosuresspecifiedunderSection133oftheAct.Further,theCompany isnot requiredtoconstituteanAuditCommitteeunderSection177oftheAct,andaccordingly,tothisextent,theprovisionsofClause3(xiii)oftheOrderarenotapplicabletotheCompany.

xiv. The Company has not made any preferential allotment or privateplacementofsharesorfullyorpartlyconvertibledebenturesduringtheyear under review. Accordingly, the provisions of Clause 3(xiv) of theOrderarenotapplicabletotheCompany.

xv. TheCompanyhasnotentered intoanynoncashtransactionswith itsdirectorsorpersonsconnectedwithhim.Accordingly,theprovisionsofClause3(xv)oftheOrderarenotapplicabletotheCompany.

xvi. TheCompanyisnotrequiredtoberegisteredunderSection45-IAoftheReserveBankofIndiaAct,1934.Accordingly,theprovisionsofClause3(xvi)oftheOrderarenotapplicabletotheCompany.




AshokNarayanaswamy



Annexure B to Independent Auditor’s Report

157


Balance Sheet (Allamountsinrupeesunlessotherwisestated) Notes As at 31st March, 2019 As at 31st March, 2018

ASSETS Non-current assetsProperty,plantandequipment 3 22,33,995 32,46,519

Deferredtaxassets(net) 4 2,29,78,265 2,33,19,271

Incometaxassets(net) 5 5,79,78,255 4,24,51,240

Total non-current assets 8,31,90,515 6,90,17,030

Current assets

Financial assets

i.Investments 6(a) 12,13,86,658 9,95,15,133

ii.Tradereceivables 6(b) 10,99,67,826 10,03,15,314

iii.Cashandcashequivalents 6(c) 1,31,23,551 60,32,846

iv.Others 6(d) 5,25,57,663 5,78,54,872

Othercurrentassets 7 26,78,840 25,19,528

Total current assets 29,97,14,538 26,62,37,693

Total assets 38,29,05,053 33,52,54,723

EQUITY AND LIABILITIES

Equitysharecapital 8 45,00,080 45,00,080

Otherequity 31,75,75,532 25,80,64,943

Total equity 32,20,75,612 26,25,65,023

LIABILITIES

Non-current liabilities

Otherfinancialliabilities 9(a) 13,72,761 –

Provisions 10(a) 1,20,46,362 1,04,15,736

Total non-current liabilities 1,34,19,123 1,04,15,736

Current liabilities

Financial liabilities

i. Tradepayables 9(b)

Totaloutstandingduesofmicroenterprisesandsmallenterprises – –

Totaloutstandingduesofcreditorsotherthanmicro enterprisesandsmallenterprises 1,45,48,692 1,64,62,523

ii. Otherfinancialliabilities 9(c) 61,71,048 55,09,031

Provisions 10(b) 63,95,354 1,00,55,399

Othercurrentliabilities 11 2,02,95,224 3,02,47,011

Total current liabilities 4,74,10,318 6,22,73,964

Total liabilities 6,08,29,441 7,26,89,700

Total equity and liabilities 38,29,05,053 33,52,54,723

Theaccompanyingnotes1to28areanintegralpartofthefinancialstatements.

ThisistheBalanceSheetreferredtoinourreportofevendate. For Price Waterhouse Chartered Accountants LLP OnbehalfoftheBoardofDirectors FirmRegistrationNo.:012754N/N500016 Ashok Narayanaswamy Samir Mecherivalappil Chandrasekharan Jagdish Singh Partner ManagingDirector DirectorMembershipNumber:095665 DIN08064002 DIN00042258Place:Gurugram Place:Gurugram Place:GurugramDate:23rdApril,2019 Date:23rdApril,2019 Date:23rdApril,2019

158


Statement of Profit and Loss (Allamountsinrupeesunlessotherwisestated)

Notes For the year ended For the year ended 31st March, 2019 31st March, 2018Revenuefromoperations 12 27,66,60,399 25,88,03,180Otherincome 13 2,31,35,945 1,71,27,801Total income 29,97,96,344 27,59,30,981

Expenses Employeebenefitsexpense 14 14,49,84,517 15,44,94,076Depreciationexpense 3 10,70,981 14,85,210Otherexpenses 15 6,01,61,711 8,32,28,701Total expenses 20,62,17,209 23,92,07,987

Profit before tax 9,35,79,135 3,67,22,994Incometaxexpense - Currenttax 16 2,72,00,000 2,36,28,000 - Deferredtax 16 2,70,394 (62,02,069)Total tax expense 2,74,70,394 1,74,25,931Profit for the year 6,61,08,741 1,92,97,063Othercomprehensiveincome Items that will not be reclassified to profit or loss – Remeasurementsofpost-employmentbenefitobligations 2,53,816 16,15,979 – Incometaxrelatingtotheseitems (70,612) (4,49,565)Othercomprehensiveincomefortheyear,netoftax 1,83,204 11,66,414Total comprehensive income for the year 6,62,91,945 2,04,63,477

Earnings per equity share Basicearningspershare 17 146.91 42.88 Dilutedearningspershare 17 146.91 42.88Theaccompanyingnotes1to28areanintegralpartofthefinancialstatements.ThisistheStatementofProfitandLossreferredtoinourreportofevendate.For Price Waterhouse Chartered Accountants LLP OnbehalfoftheBoardofDirectors FirmRegistrationNo.:012754N/N500016 Ashok Narayanaswamy Samir Mecherivalappil Chandrasekharan Jagdish Singh Partner ManagingDirector DirectorMembershipNumber:095665 DIN08064002 DIN00042258Place:Gurugram Place:Gurugram Place:GurugramDate:23rdApril,2019 Date:23rdApril,2019 Date:23rdApril,2019

Statement of changes in equity (Allamountsinrupeesunlessotherwisestated)

A. Equity Share Capital

Balance as at 1st April, 2017 45,00,080 ChangesinEquityShareCapital – Balance as at 31st March, 2018 45,00,080 ChangesinEquityShareCapital – Balance at 31st March, 2019 45,00,080

B. Other Equity

Reserves and Surplus

CapitalReserve RetainedEarnings GeneralReserve Total

Balance as at 1st April, 2017 30,00,000 20,76,23,706 3,37,47,999 24,43,71,705 Profitfortheyear – 1,92,97,063 – 1,92,97,063 Othercomprehensiveincome(netoftax) – 11,66,414 – 11,66,414 Total comprehensive income – 2,04,63,477 – 2,04,63,477 Dividendpaid (56,25,100) (56,25,100) Incometaxondividendpaid - (11,45,139) – (11,45,139) Balance as at 31st March, 2018 30,00,000 22,13,16,944 3,37,47,999 25,80,64,943 Profitfortheyear – 6,61,08,741 – 6,61,08,741 Othercomprehensiveincome(netoftax) – 1,83,204 – 1,83,204 Total comprehensive income – 6,62,91,945 – 6,62,91,945 Dividendpaid* – (56,25,100) – (56,25,100) Incometaxondividendpaid – (11,56,256) – (11,56,256) Balance as at 31st March, 2019 30,00,000 28,08,27,533 3,37,47,999 31,75,75,532

*TheCompanyhadpaidafinaldividendof`12.50pershareonequitysharesof` 10/-each,aggregatingto`56,25,100(Previousyear:`56,25,100)fortheyearended31stMarch,2018.Thetaximpactofdividendis`11,56,256(Previousyear:`11,45,139). Thedirectorshaverecommendedthepaymentofafinaldividendof`12.50perfullypaidequityshareof`10/-each,aggregatingto`56,25,100subsequenttotheyearend.Thisproposeddividendissubjecttotheapprovalofshareholdersintheensuingannualgeneralmeeting.Thetaximpactofdividendis`11,56,256. – Capitalreserverepresentsamountreceivedascompensationofrightsundercontract. – Retainedearningsrepresentsthecumulativeprofitaswellasremeasurementofdefinedbenefitplans,distributionasperprovisionsofCompaniesAct,2013. – Generalreserveisusedforstrengtheningthefinancialpositionandmeetingfuturecontingenciesandlosses.

Theaccompanyingnotes1to28areanintegralpartofthefinancialstatements. ThisistheStatementofchangesinequityreferredtoinourreportofevendate.

For Price Waterhouse Chartered Accountants LLP OnbehalfoftheBoardofDirectors FirmRegistrationNo.:012754N/N500016 Ashok Narayanaswamy Samir Mecherivalappil Chandrasekharan Jagdish Singh Partner ManagingDirector DirectorMembershipNumber:095665 DIN08064002 DIN00042258Place:Gurugram Place:Gurugram Place:GurugramDate:23rdApril,2019 Date:23rdApril,2019 Date:23rdApril,2019

159


Cash Flow Statement(Allamountsinrupeesunlessotherwisestated)

For the year ended For the year ended 31st March, 2019 31st March, 2018

Cash flow from operating activities

Profit before tax 9,35,79,135 3,67,22,994

Adjustmentsfor: Depreciationexpense 10,70,981 14,85,210Lossonsaleofproperty,plantandequipment-Net 59,172 44,467Provisionsfordoubtfuldebtsandotherfinancialassets 17,32,560 2,39,76,456Baddebtswrittenoff 29,03,011 9,76,995Net(gain)/lossarisingoninvestmentsmandatorilymeasuredatfairvaluethroughprofitandloss (71,78,331) (91,78,316)InterestIncome – (6,01,590)

Operating profit before working capital changes 9,21,66,528 5,34,26,216

Adjustmentsfor: Tradereceivables,advancesandotherassets (91,50,185) (3,79,79,297)Tradepayables,otherliabilitiesandprovisions (1,16,06,443) (9,60,75,264)

Cash generated from operations 7,14,09,900 (8,06,28,345)

Incometaxpaid (4,27,27,016) (3,54,73,470)

Net cash from operating activities 2,86,82,884 (11,61,01,815)

Cash flow from investing activities Purchaseofproperty,plantandequipment (1,17,629) (1,65,080)Saleofproperty,plantandequipment – 8,648Purchaseofcurrentinvestments (37,81,00,000) (86,27,00,000)Sale/redemptionofcurrentinvestments 36,34,06,806 97,36,38,295Interestreceived – 6,01,590

Net cash from investing activities (1,48,10,823) 11,13,83,453

Cash flow from financing activities Dividendpaid (56,25,100) (56,25,100)Incometaxondividendpaid (11,56,256) (11,45,139)

Net cash from financing activities (67,81,356) (67,70,239)

Net increase in cash and cash equivalents 70,90,705 (1,14,88,601)

Openingcashandcashequivalents 60,32,846 1,75,21,447

Closing cash and cash equivalents 1,31,23,551 60,32,846

Cash and cash equivalents comprise of :BalanceswithBanks 1,30,68,354 59,71,586Cashonhand 55,197 61,260

Cash and cash equivalents at the end of the year [Refer note 6(c)] 1,31,23,551 60,32,846

Theabovecashflowstatementhasbeenpreparedunderthe“IndirectMethod”assetoutinIndAS7“StatementofCashflows”.

Theaccompanyingnotes1to28areanintegralpartofthefinancialstatements.

Thisisthecashflowstatementreferredtoinourreportofevendate

For Price Waterhouse Chartered Accountants LLP OnbehalfoftheBoardofDirectors FirmRegistrationNo.:012754N/N500016 Ashok Narayanaswamy Samir Mecherivalappil Chandrasekharan Jagdish Singh Partner ManagingDirector DirectorMembershipNumber:095665 DIN08064002 DIN00042258Place:Gurugram Place:Gurugram Place:GurugramDate:23rdApril,2019 Date:23rdApril,2019 Date:23dApril,2019

160


BACKGROUND OF THE COMPANY

FortuneParkHotelsLimited,a100%subsidiaryof ITCLimited is in thebusinessofoperatinghotelsinthemid–markettoupscalesegmentunder‘Fortune’Brands.Itcurrentlyoperates47hotels.

Note 1: SIGNIFICANT ACCOUNTING POLICIES

Thisnoteprovidesa listof the significantaccountingpoliciesadoptedinthepreparationofthesefinancialstatements.Thesepolicies have been applied to all the years presented, unlessotherwisestated(ReferNote27).

a) BASIS OF PREPARATION

(i) Compliance with IND AS

The financial statements comply in all material aspects withIndian Accounting Standards (Ind AS) notified under section133oftheCompaniesAct,2013(theAct)[Companies(IndianAccounting Standards) Rules, 2015] and other relevantprovisionsoftheAct.

(ii) Historical Cost Convention

Thefinancialstatementshavebeenpreparedonahistoricalcostbasis,exceptforthefollowing:

• certain financial assets and liabilities are measured at fairvalue;

• definedbenefitplans–planassetsmeasuredatfairvalue.

Allassetsandliabilitieshavebeenclassifiedascurrentornon-currentaspertheCompany’snormaloperatingcycleandothercriteriasetoutintheScheduleIIItotheCompaniesAct,2013.Basedonthenatureofservices,thecompanyhasascertaineditsoperatingcycleastwelvemonthsforthepurposeofcurrentandnon-currentclassificationofassetsandliabilities.

b) PROPERTY, PLANT AND EQUIPMENT

Property,plantandequipmentarestatedatcostofacquisitionorconstructionlessaccumulateddepreciationandimpairment,ifany.

Cost is inclusive of inward freight, duties and taxes andincidental expenses related to acquisition. Subsequent costsare included in the asset’s carrying amount only when it isprobable that future economic benefits associated with theitemwillbe realized.Thecarryingamountofa replacedpartisderecognized.Allupgradations/enhancementsarechargedoffasrevenueexpenditureunlesstheybringsimilarsignificantadditionalbenefits.

On transition to IndAS, ithasbeenelected tocontinuewiththe carrying value of all the tangible assets recognised as at1stApril, 2015measured asperpreviousGAAPanduse thatcarryingvalueasthedeemedcostofthetangibleasset.

Lossesarisingfromtheretirementof,andgainsorlossesarisingfromdisposalofProperty,plantandequipmentarerecognisedintheStatementofProfitandLoss.

c) DEPRECIATION

Depreciation of these assets commences when the assetsare ready for their intended use which is generally oncommissioning. Items of property, plant and equipment aredepreciated inamanner thatamortises thecostof theassetsaftercommissioning(orotheramountsubstitutedforcost),lessitsresidualvalue,overtheirusefullivesasspecifiedinScheduleII of the Companies Act, 2013 on a straight line basis. Theestimatedusefullivesofproperty,plantandequipmentoftheCompanyareasfollows:

Category of property, plant and equipment Useful life

Officeequipment 5Years

Computersendusersdevices 3Years

Computer,networkandservers 6Years

Furnitureandfixtures 10Years

Vehicles 8Years.

d) IMPAIRMENT OF ASSETS

Impairmentlossisprovided,ifany,totheextent,thecarryingamountofassetsexceedtheirrecoverableamount.

Recoverableamountishigherofanasset’snetsellingpriceanditsvalue inuse.Value inuse isthepresentvalueofestimatedfuturecashflowsexpectedtoarisefromthecontinuinguseofanassetandfromitsdisposalattheendofitsusefullife.

Impairmentlossesrecognisedinprioryearsarereversedwhenthereisanindicationthattheimpairmentlossesrecognisednolonger existorhavedecreased. Such reversals are recognisedasanincreaseincarryingamountsofassetstotheextentthatit does not exceed the carrying amounts that would havebeendetermined(netofamortisationordepreciation)hadnoimpairmentlossbeenrecognisedinpreviousyears.

Changesintheexpectedusefullifeortheexpectedpatternofconsumptionoffutureeconomicbenefitsembodiedintheassetareconsidered tomodify theamortisationperiodormethod,as appropriate, and are treated as changes in accountingestimates.

e) FOREIGN CURRENCY TRANSACTIONS

TheCompanyaccountsfortransactionsinforeigncurrencyattheexchangerateprevailingonthedateof transactions.Thedate of the transaction for the purpose of determining theexchange rate on initial recognition of the asset, expense orincome is thedateonwhichanentity initially recognizes therelatednon–monetaryassetornon–monetaryliabilityonthepaymentorreceiptoftheadvanceconsideration.Gains/Lossesarising on settlement of transactions as also the translationofmonetary items at period ends due to fluctuations in theexchange ratesare recognized in theStatementofProfitandLoss.

f) FINANCIAL INSTRUMENT, FINANCIAL ASSETS, FINANCIAL LIABILITIES AND EQUITY INSTRUMENTS

FINANCIAL ASSETS AND LIABILITIES

Financial assets and financial liabilities are recognised whentheCompanybecomesapartytothecontractualprovisionsoftherelevantinstrumentandareinitiallymeasuredatfairvalue.Transactioncoststhataredirectlyattributabletotheacquisitionor issue of financial assets and financial liabilities (other thanfinancial assets and financial liabilities measured at fair valuethrough profit or loss) are added to or deducted from thefair value on initial recognition of financial assets or financialliabilities. Purchase or sale of financial assets that requiredeliveryofassetswithinatimeframeestablishedbyregulationor convention in the market place (regular way trades) arerecognisedonthetradedate,i.e.,thedatewhentheCompanycommitstopurchaseorselltheasset.

Financial Assets

Recognition: Financial assets include Investments, TradeReceivables, Advances, Security Deposits, Cash and cashequivalents. Such assets are initially recognised at transactionprice when the Company becomes party to contractualobligations. The transaction price includes transaction costsunlesstheasset isbeingfairvaluedthroughtheStatementofProfitandLoss.

Classification:Managementdeterminestheclassificationofanassetatinitialrecognitiondependingonthepurposeforwhichthe assets were acquired. The subsequent measurement offinancialassetsdependsonsuchclassification.

Financialassetsareclassifiedasthosemeasuredat:

(a)amortisedcost,wherethefinancialassetsareheldsolelyforcollectionofcashflowsarisingfrompaymentsofprincipaland/orinterest.

(b)fair value throughothercomprehensive income (FVTOCI),where the financial assets are held not only for collection

Notes forming part of the financial statements (Contd.)

161



of cash flows arising from payments of principal andinterest but also from the sale of such assets. Such assetsare subsequently measured at fair value, with unrealisedgainsandlossesarisingfromchangesinthefairvaluebeingrecognisedinothercomprehensiveincome.

(c)fair value throughprofit or loss (FVTPL),where the assetsaremanaged in accordancewithanapproved investmentstrategythattriggerspurchaseandsaledecisionsbasedonthe fair valueof suchassets. Suchassets are subsequentlymeasured at fair value, with unrealised gains and lossesarising fromchanges in the fair valuebeing recognised intheStatementofProfitandLossintheperiodinwhichtheyarise.

Tradereceivables,Advances,SecurityDeposits,Cashandcashequivalentsetc.areclassifiedformeasurementatamortisedcostwhile investmentsmayfallunderanyoftheaforesaidclasses. However, in respect of particular investments inequityinstrumentsthatwouldotherwisebemeasuredatfairvaluethroughprofitorloss,anirrevocableelectionatinitialrecognitionmaybemadetopresentsubsequentchangesinfairvaluethroughothercomprehensiveincome.

Impairment:TheCompanyassessesateachreportingdatewhetherafinancialasset(oragroupoffinancialassets)suchas investments, trade receivables, advances and securitydepositsheldatamortisedcostandfinancialassetsthataremeasuredatfairvaluethroughothercomprehensiveincomearetestedforimpairmentbasedonevidenceorinformationthat is available without undue cost or effort. Expectedcredit losses are assessed and loss allowances recognisedif the credit quality of the financial asset has deterioratedsignificantlysinceinitialrecognition.

Reclassification: Whenandonlywhenthebusinessmodelis changed, the Company shall reclassify all affectedfinancialassetsprospectivelyfromthereclassificationdateassubsequentlymeasuredatamortisedcost,fairvaluethroughother comprehensive income, fair value through profit orlosswithoutrestatingthepreviouslyrecognisedgains,lossesorinterestandintermsofthereclassificationprincipleslaiddownintheIndASrelatingtoFinancialInstruments.

De-recognition: Financial assets are derecognised whentherighttoreceivecashflowsfromtheassetshasexpired,orhasbeentransferred,andtheCompanyhastransferredsubstantially all of the risks and rewards of ownership.Concomitantly,iftheassetisonethatismeasuredat:

(a) amortised cost, the gain or loss is recognised in theStatementofProfitandLoss;

(b) fair value through other comprehensive income, thecumulative fair value adjustments previously taken toreserves are reclassified to the Statement of Profit andLoss unless the asset represents an equity investmentin which case the cumulative fair value adjustmentspreviouslytakentoreservesisreclassifiedwithinequity.

Income Recognition: Interest income is recognised in theStatementofProfitandLossusingtheeffectiveinterestmethod.Dividend income is recognised in theStatementofProfitandLosswhentherighttoreceivedividendisestablished.

Financial Liabilities

Borrowings, trade payables and other financial liabilities areinitially recognised at the value of the respective contractualobligations. They are subsequently measured at amortisedcost.Anydiscountorpremiumonredemption/settlement isrecognisedintheStatementofProfitandLossasfinancecostoverthelifeoftheliabilityusingtheeffectiveinterestmethodand adjusted to the liability figure disclosed in the BalanceSheet.

Financial liabilities are derecognised when the liability isextinguished, that is, when the contractual obligation isdischarged,cancelledandonexpiry.

Offsetting Financial Instruments

FinancialassetsandliabilitiesareoffsetandthenetamountisincludedintheBalanceSheetwherethereisalegallyenforceablerighttooffsettherecognisedamountsandthereisanintentiontosettleonanetbasisorrealisetheassetandsettletheliabilitysimultaneously.

Equity Instruments

Equityinstrumentsarerecognisedatthevalueoftheproceeds,netofdirectcostsofthecapitalissue.

g) REVENUE

Revenue is measured at the fair value of the considerationreceivedorreceivableforservicesrendered,netofdiscountstocustomers.RevenueexcludesGoodsandServicesTax(GST).

Revenue fromthe sale of services is recognisedwhentheCompanyperforms its obligations to its customers and theamountofrevenuecanbemeasuredreliablyandrecoveryoftheconsiderationisprobable.

Under the Operating and Marketing Services Agreementswith thehotel owners, theCompanyprovidesoperating andmarketing services and towards this revenue is recognisedduring the term of the agreements on regular time intervalsuponsatisfactorycompletionofperformanceobligation.

Inaddition,underthesaidAgreements,theCompanyprovidesother services during pre-operations period and fee for suchotherservicesisreceivedinadvanceandthesameisrecognisedduring pre-operations period basis the output method i.e.contract milestone matrix which is best reflectiveof theperformancecompletedtilldate.

h) DIVIDEND DISTRIBUTION

Dividends paid (including income tax thereon) is recognisedintheperiod inwhichthe interimdividendsareapprovedbytheBoardofDirectors,orinrespectofthefinaldividendwhenapprovedbyshareholders.

i) EMPLOYEE BENEFITS

TheCompanymakescontributionstobothdefinedbenefitanddefinedcontributionschemes.

Contributions to Provident Fund are in thenature of definedcontribution scheme and such paid/payable amounts arerecognised as employee benefit expense. The contributionsinrespectofprovidentfundarestatutorilydepositedwiththeGovernment.

The contributions in respect of defined benefit gratuity planaremadetoLife InsuranceCorporation(LIC)under itsGroupGratuity Scheme. The cost of providing benefits under thedefinedbenefitobligationiscalculatedbyindependentactuaryusingtheprojectedunitcreditmethod.Servicecostsandnetinterest expense or income is reflected in the Statement ofProfitandLoss.GainorlossonaccountofremeasurementsarerecognizedimmediatelythroughOtherComprehensiveIncomeintheperiodinwhichtheyoccur.

The employees of the Company are also entitled tocompensatedleaveforwhichtheCompanyrecordstheliabilitybased on actuarial valuation computed under projected unitcreditmethodsimilar tobenefitsofgratuityexplainedabove.Service costs and net interest expense or income is reflectedin theStatementof Profit and Loss.Gainor LossonaccountofremeasurementsarerecognizedimmediatelythroughOtherComprehensive Income in the period in which they occur.Thesebenefitsareunfunded.

Theeligibleemployeesarealsoentitledtootherbenefitssuchasloyaltyplan,whichareinthenatureofLongTermBenefits,

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and are estimated based on variable elements affecting thecomputationsincludingperformanceratingsinthesubsequentappraisalcycle.SuchplansareunfundedandarerecognizedintheStatementofProfitandLoss.

j) EMPLOYEE SHARE BASED COMPENSATION

ThecostofstockoptionsandstockappreciationunitsgrantedbyITCLimited,theHoldingCompany,toitseligibleemployeesdeputed to the Company is recognised at fair value. TheseSchemesareinthenatureofequitysettled/cashsettledsharebasedcompensationandareassessed,managed/administeredbytheHoldingCompany.

Incaseofstockoptions, the fairvalueofstockoptionsat thegrantdateisamortisedonastraightlinebasisoverthevestingperiodandcostrecognizedasanemployeebenefitsexpensesintheStatementofProfitandLosswithacorrespondingcreditinequity,netofreimbursements,ifany.

In case of stock appreciation units, the fair value of stockappreciationunitsatthegrantdate is initiallyrecognisedandremeasured at each reporting date, until settled, and costrecognizedasanemployeebenefitsexpensesintheStatementof Profit and Loss with a corresponding increase in otherfinancialliabilities.

k) LEASES

Leases are recognised as a finance leasewhenever the termsof the lease transfer substantially all the risks and rewardsof ownership to the lessee. All other leases are classified asoperatingleases.

Lease payables under operating leases are charged to theStatement of Profit and Loss on a straight-line basis over thetermoftherelevantleaseunlessthepaymentstothelessorarestructuredtoincreaseinlinewithexpectedgeneralinflationtocompensateforthelessor’sexpectedinflationarycostincreases.

l) TAXES ON INCOME

Taxesonincomecomprisesofcurrenttaxesanddeferredtaxes.Currenttax intheStatementofProfitandLoss isprovidedasthe amount of tax payable in respect of taxable income fortheperiodusingtaxratesenactedduringtheperiod,togetherwithanyadjustmenttotaxpayableinrespectofpreviousyears.Incometax,insofarasitrelatestoitemsdisclosedunderOtherComprehensive Income,aredisclosed separatelyunderOtherComprehensiveIncome,asapplicable.

Deferred tax is recognizedon temporarydifferencesbetweenthecarryingamountsofassetsandliabilitiesandtheamountsusedfortaxationpurposes(taxbase),atthetaxratesandtaxlawsenactedorsubstantivelyenactedbytheendoftheperiod.

Deferred tax assets are recognized for the future taxconsequences to the extent it is probable that future taxableprofitswillbeavailableagainstwhichthedeductibletemporarydifferencescanbeutilised.

Deferredtaxassetsandliabilitiesareoffsetwhenthereislegallyenforceablerighttooffsetcurrenttaxassetsandliabilitiesandwhen the deferred tax balances related to the same taxationauthority.Currenttaxassetsandtaxliabilitiesareoffsetwheretheentityhasalegallyenforceablerighttooffsetandintendseithertosettleonnetbasis,ortorealizetheassetandsettletheliabilitysimultaneously.

m) CLAIMS

Claims against theCompany not acknowledged as debts are

disclosedafteracarefulevaluationoffactsandlegalaspectsofthematterinvolved.

n) PROVISIONS

Provisionsarerecognisedwhen,asaresultofapastevent,theCompanyhasalegalorconstructiveobligation; it isprobablethat an outflow of resources will be required to settle theobligation; and the amount can be reliably estimated. Theamount so recognised is abest estimateof the considerationrequired to settle theobligationat the reportingdate, takinginto account the risks and uncertainties surrounding theobligation. In an event when the time value of money ismaterial,theprovisioniscarriedatthepresentvalueofthecashflowsestimatedtosettletheobligation.

o) CASH AND CASH EQUIVALENTS

For the purpose of presentation in the cash flow statement,cash and cash equivalents include cash on hand, demanddepositswithbanks,othershort-termhighlyliquidinvestmentswithoriginalmaturitiesofthreemonthsorlessthatarereadilyconvertibletoknownamountsofcashandwhicharesubjecttoaninsignificantriskofchangeinvalue.

p) EARNINGS PER SHARE

Basic earningsper share computedbydividing thenetprofitorlossfortheperiodattributabletoequityshareholdersbytheweightedaveragenumberofequitysharesoutstandingduringtheperiod.

Forthepurposeofcalculatingdilutedearningspershare,thenetprofitorlossfortheperiodattributabletoequityshareholdersandtheweightedaveragenumberofsharesoutstandingduringthe period is adjusted for the effects of all dilutive potentialequityshares.

q) SEGMENT REPORTING

Operatingsegmentsarereportedinamannerconsistentwiththeinternalreportingprovidedtothechiefoperatingdecision-maker(CODM).TheCODM,whoisresponsibleforallocatingresourcesandassessingperformanceoftheoperatingsegments,hasbeenidentifiedastheManagementCommitteeheadedbytheManagingDirector.

Note 2: Use of critical estimates and judgements

The preparation of financial statements in conformity withgenerallyacceptedaccountingprinciplesrequiresmanagementto make estimates and assumptions that affect the reportedamounts of assets and liabilities and disclosure of contingentliabilitiesatthedateofthefinancialstatementsandtheresultsofoperationsduringthereportingperiodend.Althoughtheseestimates are based upon management’s best knowledge ofcurrenteventsandaction,actualresultscoulddeferfromtheseestimates.

Theestimatesandunderlyingassumptionarereviewedonanongoingbasis.Revisionstoaccountingestimatesarerecognisedin theperiod inwhich the estimates is revised if the revisionaffects only that period, or in the period of the revision andfuture periods if the revision affects both current and futureperiods.

Theareasinvolvingcriticalestimatesorjudgementsare:

– EstimationofdefinedbenefitobligationsNote10and14

– ContingentliabilityNote25

– Impairment of trade receivables and other financial assetsNote6(b)and6(d)

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Notes forming part of the financial statements (Contd.)(Allamountsinrupeesunlessotherwisestated)

Note 3 : Property, Plant and Equipment

Note 5: Income tax assets (net)

As at31st March,

2019

As at 31st March,

2018

Advancetax[Netofprovisions`13,90,90,229(Previousyear`11,18,90,229)] 5,79,78,255 4,24,51,240

Total income tax assets (net) 5,79,78,255 4,24,51,240

Furniture and fixture

Vehicles Office equipment

Computers end users devices

Computer, network and servers

Total

Year ended 31st March, 2018

Gross carrying amount

Openinggrosscarryingamount 4,30,824 46,069 4,38,342 44,15,081 22,23,598 75,53,914

Additions – – 49,800 1,15,280 – 1,65,080

Disposals – – (23,831) (1,02,681) – (1,26,512)

Closing gross carrying amount 4,30,824 46,069 4,64,311 44,27,680 22,23,598 75,92,482

Accumulated depreciation

Openingaccumulateddepreciation 1,91,390 12,030 3,15,432 21,63,126 2,52,172 29,34,150

Depreciationchargeduringtheyear 27,740 6,015 35,103 10,39,477 3,76,875 14,85,210

Disposals – – (20,987) (52,410) – (73,397)

Closing accumulated depreciation 2,19,130 18,045 3,29,548 31,50,193 6,29,047 43,45,963

Net carrying amount 2,11,694 28,024 1,34,763 12,77,487 15,94,551 32,46,519

Year ended 31st March, 2019

Gross carrying amount

Openinggrosscarryingamount 4,30,824 46,069 4,64,311 44,27,680 22,23,598 75,92,482

Additions – – – – 1,17,629 1,17,629

Disposals – – (1,34,513) (14,383) (29,219) (1,78,115)

Closing gross carrying amount 4,30,824 46,069 3,29,798 44,13,297 23,12,008 75,31,996

Accumulated depreciation

Openingaccumulateddepreciation 2,19,130 18,045 3,29,548 31,50,193 6,29,047 43,45,963

Depreciationchargeduringtheyear 20,886 6,014 34,818 6,57,526 3,51,737 10,70,981

Disposals – – (1,18,943) – – (1,18,943)

Closing accumulated depreciation 2,40,016 24,059 2,45,423 38,07,719 9,80,784 52,98,001

Net carrying amount 1,90,808 22,010 84,375 6,05,578 13,31,224 22,33,995

Contractualobligations Refertonote22fordisclosureofcontractualcommitmentsfortheacquisitionofproperty,plantandequipment.

Deferred tax assets Deferred tax liabilities Net Deferred

Tax Assets (A-B)

On employee

benefit

On allowances for doubtful trade and

other financial assets

Other timing

differences

Deferred tax assets

(A)

Property, plant and

equipment

Financial assets at fair

value through profit or loss

Deferred tax liabilities

(B)

At 1st April, 2017 68,33,282 1,08,27,448 6,06,483 1,82,67,213 (2,68,988) (4,31,458) (7,00,446) 1,75,66,767

(Charged)/credited:

-toprofitorloss (6,61,006) 67,75,371 (1,88,852) 59,25,513 99,688 1,76,868 2,76,556 62,02,069

-toothercomprehensiveincome (4,49,565) – – (4,49,565) – – – (4,49,565)

At 31st March, 2018 57,22,711 1,76,02,819 4,17,631 2,37,43,161 (1,69,300) (2,54,590) (4,23,890) 2,33,19,271

(Charged)/credited:

-toprofitorloss (4,88,194) 4,81,998 (2,22,560) (2,28,756) 89,540 (1,31,178) (41,638) (2,70,394)

-toothercomprehensiveincome (70,612) – – (70,612) – – – (70,612)

At 31st March, 2019 51,63,905 1,80,84,817 1,95,071 2,34,43,793 (79,760) (3,85,768) (4,65,528) 2,29,78,265

TheCompanyhaslongtermcapitallossesof`₹11,67,837(Previousyear:`11,68,309)forwhichdeferredtaxassetshasnotbeenrecognised,whichisduetoexpirebyfinancialyear2021-22.

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Note 6: Financial assets - current

Note 6(a) Investments

As at 31st March, 2019


Unquoted

Investment in mutual funds measured at FVTPL

AdityaBirlaSunLifeLiquidFund

[66,773.898units:Previousyear(Nilunits)]of` 100/-each 2,00,61,296 –

UTI-MoneyMarketFund-InstitutionalPlan

[Nilunits:Previousyear(25,945.237units)]of`1,000/-each – 5,05,86,588

ICICIPrudentialLiquidFund

[1,85,415.779units:Previousyear(Nilunits)]of`100/-each 5,12,51,946 –

SBILiquidFund

[17,098.248units:Previousyear(Nilunits)]of`1,000/-each 5,00,73,416 –

RelianceLiquidFund-TreasuryPlan

[Nilunits:Previousyear(8,975.975units)]of`1,000/-each – 3,80,57,617

AdityaBirlaSunLifeFloatingRateFundShortTermPlan

[Nilunits:Previousyear(46,860.356units)]of`100/-each – 1,08,70,928

Total investments 12,13,86,658 9,95,15,133 Note 6(b) Trade receivables



Unsecured,ConsideredGood(Refernote21) 10,99,67,826 10,03,15,314

Creditimpaired 5,06,64,762 4,86,82,503

Less:Provisionforimpairment (5,06,64,762) (4,86,82,503)

Total trade receivables 10,99,67,826 10,03,15,314 Note 6(c) Cash and cash equivalents



Balanceswithbanks

-incurrentaccounts 1,30,68,354 59,71,586

Cashonhand 55,197 61,260

Total cash and cash equivalents 1,31,23,551 60,32,846 Note 6(d) Others



Other assets - Unsecured unless stated otherwise

-Contractuallyreimbursablecost-Consideredgood 5,19,15,663 5,73,92,872

-Contractuallyreimbursablecost-Creditimpaired 1,43,41,768 1,45,91,467

Less:Provisionforimpairment (1,43,41,768) (1,45,91,467)

-Securitydeposits 6,42,000 4,62,000

Total others 5,25,57,663 5,78,54,872

Note 7 : Other current assets



Prepaymentexpenses 5,22,622 3,99,659

Advancestoemployeesandvendors – 55,264

GSTrecoverable 21,56,218 20,64,605

Total other current assets 26,78,840 25,19,528

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Notes forming part of the financial statements (Contd.)(Allamountsinrupeesunlessotherwisestated)Note 8: Equity share capital

Particulars As at 31st March, 2019 Asat31stMarch,2018

Authorised

20,00,000(Previousyear20,00,000)equitysharesof`10each 2,00,00,000 2,00,00,000

Total 2,00,00,000 2,00,00,000

Issued, subscribed and paid up 4,50,008(Previousyear4,50,008)equitysharesof`10each 45,00,080 45,00,080

Total 45,00,080 45,00,080

(i) Movements in equity share capital

Particulars Number of shares Amount

Asat1stApril,2017 4,50,008 45,00,080

Add:Increase/lesschangesduringtheyear – –

As at 31st, March, 2018 4,50,008 45,00,080

Add:Increase/lesschangesduringtheyear – –

As at 31st March, 2019 4,50,008 45,00,080

TheCompanyhasoneclassofequityshareshavingaparvalueof`10pershare.Eachshareholderiseligibleforonevotepershareheld.ThedividendproposedbytheBoardofDirectorsissubjecttotheapprovaloftheshareholdersintheensuingAnnualGeneralMeeting.Intheeventofliquidation,theequityshareholdersareeligibletoreceivetheremainingassetsoftheCompanyafterdistributionofallpreferentialamounts,inproportiontotheirshareholding.

(ii) Shares held by holding company

Particulars As at 31st March, 2019 As at 31st March, 2018

EquitySharesof`10eachfullypaidupheldby: ITCLimited,theholdingCompany 4,50,002 4,50,002 HeldbymanagementpersonnelasnomineesofITCLimited 6 6

(iii)Details of shareholders holding more than 5% shares in the Company

Particulars As at 31st March, 2019 Asat31stMarch,2018

Number of shares % holding Numberofshares %holding

ITCLimited,theholdingcompany 4,50,002 99.98% 4,50,002 99.98%

HeldbymanagementpersonnelasnomineesofITCLimited 6 0.02% 6 0.02%

Note 9(a): Other financial liabilities

As at 31st March, 2019 Asat31stMarch,2018

Non-Current

Payabletoholdingcompany(ReferNote21) 13,72,761 –Total other financial liabilities 13,72,761 –

Note 9(b) : Trade payables


Current

Totaloutstandingduesofmicroandsmallenterprises# – -

Totaloutstandingduesofcreditorsotherthanmicroandsmallenterprises 1,45,48,692 1,64,62,523

Total trade payables 1,45,48,692 1,64,62,523 #TheCompany,basedontheinformationavailableonthestatusofthesuppliers,doesnothaveanyduestoenterprisescoveredundertheMicro,SmallandMediumEnterprisesDevelopmentAct,2006.

Note 9(c) : Other financial liabilities


Current

Employeebenefitspayable 54,71,057 39,24,775

PayabletoholdingCompany(ReferNote21) 6,99,991 15,84,256

Total other financial liabilities 61,71,048 55,09,031

Note 10 (a) Provisions

As at 31st March, 2019 Asat31stMarch,2018Non-currentProvisionforemployeebenefits(ReferNote14)-Retirementbenefits 56,51,268 57,23,136

-Otherbenefits 63,95,094 46,92,600Total provision 1,20,46,362 1,04,15,736

Note 9: Financial liabilities

166



Note 10 (b) Provisions

As at 31st March, 2019 As at 31st March, 2018

CurrentProvisionforemployeebenefits(ReferNote14)-Retirementbenefits 37,93,721 57,75,899-Otherbenefits 26,01,633 42,79,500Total provision 63,95,354 1,00,55,399

Note 11: Other current liabilities


Deferredrevenuereceivedinadvance# 38,49,531 47,04,531

Advancefromcustomers 47,38,000 1,44,84,460

Statutoryduesincludingprovidentfundandtaxdeductedatsource 1,17,07,693 1,10,58,020

Total other current liabilities 2,02,95,224 3,02,47,011

# Revenue recognised in relation to contract liabilities


Openingbalance 47,04,531 79,33,031Add:Receivedduringtheyearnetofrevenuerecognisedduringtheyear 37,00,000 2,00,000

Less:Revenuerecognisedthatrelatestocarried-forwardcontractliabilities 45,55,000 34,28,500Closing Balance 38,49,531 47,04,531

Note 12: Revenue from operations

For the year ended 31st March, 2019


Renderingofservices[ReferNote27(i)]

-Operatingandmarketingservices 27,41,60,399 25,88,03,180

-Incomefromallianceclosure 25,00,000 -

Total revenue 27,66,60,399 25,88,03,180 Note 13 : Other income



Interestincomefromfinancialassetsatamortisedcost-Onincometaxrefund – 6,01,590Netgainonfinancialassetsmandatorilymeasuredatfairvaluethroughprofitorloss 13,86,658 9,15,133Netgainonsaleofinvestments 57,91,673 82,63,183Liabilitiesnolongerrequiredwritten-back 1,38,39,191 54,00,537Miscellaneousincome 21,18,423 19,47,358Total other income 2,31,35,945 1,71,27,801

Note 14: Employee benefits expense



Salary,wagesandbonus 19,96,87,255 19,68,49,269Reimbursementofremunerationofdeputedmanagers 3,87,98,295 3,39,76,528Sharebasedpaymentsexpensefordeputedmanagers 56,54,520 2,64,74,501Contributiontoemployeesprovidentandotherfunds 1,31,47,058 1,28,16,556Staffwelfareexpenses 1,11,50,023 1,15,74,171

26,84,37,151 28,16,91,025Less:Recoveries* 12,34,52,634 12,71,96,949Total employee benefit expense 14,49,84,517 15,44,94,076

*Recoveriesofsalarycostofdeputedpersonnelfromalliances. TheCompanyhasaccountedforthedefinedbenefitandretirementbenefitplanandcontributionschemeasunder: [a] Defined benefit plan / long term compensated absences

Gratuity:Theemployeesareentitledtogratuitythatiscomputedashalf-month’ssalary,foreverycompletedyearofserviceandispayableonseparation/retirement.TheCompanymakesprovisionofsuchgratuityliabilityinthebooksofaccountsonthebasisofactuarialvaluation.TheCompanypayscontributiontoLifeInsuranceCorporationofIndiatofunditsplan.

Leaveencashment:Theemployeesareentitledforleaveforeachyearofserviceandpartthereof,subjecttothelimitsspecified,theunavailedportionofsuchleavescanbeaccumulatedorencashedduring/attheendoftheserviceperiod.Theplanisunfunded.

167



Present value of obligation

Fair value of plan assets

Total Impact of asset ceiling

Net amount

1st April, 2017 1,24,98,426 (1,12,30,225) 12,68,201 – 12,68,201

Currentservicecost 26,24,749 – 26,24,749 – 26,24,749

Pastservicecost – – – – –

Interestexpense/(income) 7,48,318 (7,30,576) 17,742 – 17,742

Total amount recognised in profit or loss 33,73,067 (7,30,576) 26,42,491 – 26,42,491

Remeasurements

Returnonplanassets,excludingamountsincludedininterestexpense/(income) – (80,127) (80,127) – (80,127)

(Gain)/lossfromchangeindemographicassumptions (1,37,089) – (1,37,089) – (1,37,089)

(Gain)/lossfromchangeinfinancialassumptions (4,61,860) – (4,61,860) – (4,61,860)

Experience(gains)/losses (6,25,861) – (6,25,861) – (6,25,861)

Changeinassetceiling,excludingamountsincludedininterestexpense – – – – –

Total amount recognised in other comprehensive income (12,24,810) (80,127) (13,04,937) – (13,04,937)

Contributions:

Employers

Planparticipants – (12,00,000) (12,00,000) – (12,00,000)

Benefitpayments (28,24,464) 28,24,464 – – –

31st March, 2018 1,18,22,218 (1,04,16,464) 14,05,754 – 14,05,754


Fair value of plan assets

Total Impact of asset ceiling

Net amount

1st April, 2018 1,18,22,218 (1,04,16,464) 14,05,754 – 14,05,754

Currentservicecost 26,46,464 – 26,46,464 – 26,46,464

Pastservicecost – – – – –

Interestexpense/(income) 8,03,080 (9,33,707) (1,30,627) – (1,30,627)

Changeinassetceiling,excludingamountsincludedininterestexpense – – – 20,45,084 20,45,084

Total amount recognised in profit or loss 34,49,544 -9,33,707 25,15,837 20,45,084 45,60,921

Remeasurements

Returnonplanassets,excludingamountsincludedininterestexpense/(income) – 1,14,904 1,14,904 – 1,14,904

(Gain)/lossfromchangeindemographicassumptions 19,582 – 19,582 – 19,582

(Gain)/lossfromchangeinfinancialassumptions – – – – –

Experience(gains)/losses (6,25,047) – (6,25,047) – (6,25,047)

Changeinassetceiling,excludingamountsincludedininterestexpense – – – – –

Total amount recognised in other comprehensive income (6,05,465) 1,14,904 (4,90,561) – (4,90,561)

Contributions:

Employers

Planparticipants – (54,76,114) (54,76,114) – (54,76,114)

Benefitpayments (22,28,982) 22,28,982 - – –

31st March, 2019 1,24,37,315 (1,44,82,399) (20,45,084) 20,45,084 –

The net liability disclosed above relates to funded and unfunded plans are as follows:

31st March, 2019 31stMarch,2018

Presentvalueoffundedobligations 1,24,37,315 1,18,22,218

Fairvalueofplanassets (1,44,82,399) (1,04,16,464)

Fundedstatus (20,45,084) 14,05,754

Effectofassetceiling 20,45,084 –

Netdefinedbenefitliability(asset) – 14,05,754

Major Category of Plan Assets as a % of the Total Plan Assets

LifeInsuranceCorporationofIndia 100% 100%

Significantestimates:actuarialassumptionsandsensitivity

Thesignificantactuarialassumptionswereasfollows:


Discountrate 7.50% p.a. 7.50%p.a.

SalaryGrowthRate 5.00% p.a. 5.00%p.a.

AttritionRate 33.00% p.a. 38.00%p.a.

a) Thereconciliationofopeningandclosingbalancesofthepresentvalueofdefinedbenefitobligationsareasunder:

Gratuity - funded

168



Thesignificantactuarialassumptionswereasfollows:


Discountrate 7.50% p.a. 7.50%p.a.

SalaryGrowthRate 5.00% p.a. 5.00%p.a.

AttritionRate 33.00% p.a. 38.00%p.a.

Sensitivity Analysis

Defined Benefit Obligation

As At 31st March, 2019`

AsAt31stMarch,2018`

DiscountRate+100basispoints 92,61,240 99,21,740

DiscountRate-100basispoints 96,37,970 1,02,72,413

SalaryIncreaseRate+1% 95,95,186 1,02,26,423

SalaryIncreaseRate–1% 92,99,598 99,63,653

AttritionRate+1% 94,60,377 1,01,06,347

AttritionRate–1% 94,28,819 1,00,79,616

[b] State plans (contribution scheme)

TheCompanydeposits anamountdeterminedat afixedpercentageofbasicpayeverymonth to theStateadministeredProvident Fund for thebenefitof theemployees.Accordingly,theCompany’scontributionduringtheyearthathasbeenchargedtostatementofprofitandlossamountsto` 79,84,702(Previousyear:` 78,94,415).

Sensitivity Analysis

Thesensitivityanalysisbelowhasbeendeterminedbasedonreasonablypossiblechangeoftherespectiveassumptionsoccurringattheendofthereportingperiod,whileholdingallotherassumptionsconstant.Thesesensitivitiesshowthehypotheticalimpactofachangeineachofthelistedassumptionsinisolation.Whileeachofthesesensitivitiesholdsallotherassumptionsconstant,inpracticesuchassumptionsrarelychangeinisolationandtheassetvaluechangesmayoffsettheimpacttosomeextent.Forpresentingthesensitivities,thepres-entvalueofthedefinedbenefitobligationhasbeencalculatedusingtheprojectedunitcreditmethodattheendofthereportingperiod,whichisthesameasthatappliedincalculatingtheDefinedBenefitObligationpresentedabove.Therewasnochangeinthemethodsandassumptionsusedinthepreparationofsensitivityanalysisfrompreviousyear.

Defined Benefit Obligation


AsAt31stMarch,2018`

DiscountRate+100basispoints 1,21,80,119 1,16,07,387

DiscountRate-100basispoints 1,27,07,808 1,20,46,883

SalaryIncreaseRate+1% 1,26,51,633 1,19,93,160

SalaryIncreaseRate–1% 1,22,30,061 1,16,55,959

AttritionRate+1% 1,24,28,934 1,18,09,091

AttritionRate–1% 1,24,45,169 1,18,35,089

Leave encashment - unfunded


AsAt31stMarch,2018`



Opening Balance 1,00,93,281 1,14,87,273

Currentservicecost 8,87,495 12,37,993

Pastservicecost – –

Interestexpense/(income) 6,65,567 6,74,301

Total amount recognised in profit or loss 15,53,062 19,12,294

Remeasurements

Returnonplanassets,excludingamountsincludedininterestexpense/(income) – –

(Gain)/lossfromchangeindemographicassumptions (67,689) 2,22,709

(Gain)/lossfromchangeinfinancialassumptions – (3,93,680)

Experience(gains)/losses 3,04,433 (1,40,071)

Changeinassetceiling,excludingamountsincludedininterestexpense – -

Total amount recognised in other comprehensive income 2,36,744 (3,11,042)

Contributions:Employers

Planparticipants – –

Benefitpayments (24,38,098) (29,95,244)

Closing Balance 94,44,989 1,00,93,281

169


Note 17: Earnings per equity share


Fortheyearended 31stMarch,2018

ProfitaftertaxWeightedaveragenumberofsharesoutstanding

6,61,08,7414,50,008

1,92,97,0634,50,008

Basic and diluted earnings per share 146.91 42.88Note:Therearenodilutiveinstruments.


Note 15 (a): Details of payments to auditors

Payment to auditors (excluding GST)Asauditor:

Auditfees TaxauditfeesFees for other servicesRe-imbursementofexpenses

3,50,000 1,00,000

75,000 66,500

3,50,0001,00,000

50,00049,123

Total payments to auditors 5,91,500 5,49,123

Note 15 (b): Corporate social responsibility expenditure

ContributiontoITCRuralDevelopmentTrust 16,37,000 18,09,000Total 16,37,000 18,09,000AmountrequiredtobespentasperSection135oftheActAmountspentduringtheyearon

(i)Construction/acquisitionofanasset(ii)Onpurposesotherthan(i)above

16,36,684

– 16,37,000

18,08,891

–18,09,000

Note 16: Income tax expense (a) Income tax expense



Current taxCurrenttaxonprofitsfortheyearTotal current tax expenseDeferred taxDecrease/(increase)indeferredtaxassets(Decrease)/increaseindeferredtaxliabilities

2,72,00,000 2,72,00,000

2,28,756

41,638

2,36,28,0002,36,28,000

(59,25,513)(2,76,556)

Total deferred tax expense/(benefit) 2,70,394 (62,02,069)

Income tax expense 2,74,70,394 1,74,25,931

(b) Reconciliation of tax expense and the accounting profit multiplied by India’s tax rate



ProfitbeforeincometaxexpensesIndiantaxrateTaxbasedonnormaltaxrateItemsnotconsideredwhiledeterminingtaxableprofitsEffectofdeferredtaxbalancesduetochangesinincometaxratenotifiedunderIncomeTaxAct,1961

9,35,79,135 27.82%

2,60,33,715 14,36,679

–

3,67,22,99427.55%

1,01,33,63275,20,845(2,28,546)

Total tax expense 2,74,70,394 1,74,25,931

Note 15: Other expenses



Repairsandmaintenance-others 26,80,684 35,05,408Powerandfuel 5,06,466 6,98,114Ratesandtaxes – 55,660Rent(Refernote23) 56,62,370 50,44,788Printingandstationery 6,02,460 4,04,183Travellingandconveyance 1,68,15,624 1,59,04,562Advertisement/salespromotion 1,16,61,991 1,43,47,910Legalexpenses 21,08,410 36,73,751Consultancy/professionalfees 71,64,182 39,62,276Postageandtelephone 14,74,321 21,23,348Insurance 2,23,513 2,53,536Informationtechnologyservices 35,06,939 48,50,508Baddebtswritten-off 29,03,011 9,76,995Provisionsfordoubtfuldebtsandotherfinancialassets 17,32,560 2,39,76,456Lossonsaleofproperty,plantandequipment-Net 59,172 44,467Paymenttotheauditors[Refernote15(a)] 5,91,500 549,123Expendituretowardscorporatesocialresponsibilityactivities[Refernote15(b)] 16,37,000 18,09,000Miscellaneous 8,31,508 10,48,616Total other expenses 6,01,61,711 8,32,28,701

170



Note 18: Financial Instruments and Fair Value Disclosures

Particulars Notes As at 31st March, 2019 As at 31st March, 2018

Carrying value Fair value Carrying value Fair value

A. Financial assets

a)Measuredatamortisedcost

i)Tradereceivables(netofprovisionforimpairment) 6(b) 10,99,67,826 10,99,67,826 10,03,15,314 10,03,15,314

ii)Cashandcashequivalents 6(c) 1,31,23,551 1,31,23,551 60,32,846 60,32,846

iii)Other 6(d) 5,25,57,663 5,25,57,663 5,78,54,872 5,78,54,872

Sub-total 17,56,49,040 17,56,49,040 16,42,03,032 16,42,03,032

b)Measuredatfairvaluethroughprofitorloss

i)Investmentsinmutualfunds 6(a) 12,13,86,658 12,13,86,658 9,95,15,133 9,95,15,133

Sub-total 12,13,86,658 12,13,86,658 9,95,15,133 9,95,15,133

Total financial assets 29,70,35,698 29,70,35,698 26,37,18,165 26,37,18,165

B. Financial liabilities

a)Measuredatamortisedcost

i)Otherfinancialliabilities-noncurrent 9(a) 13,72,761 13,72,761 - -

ii)Tradepayable 9(b) 1,45,48,692 1,45,48,692 1,64,62,523 1,64,62,523

iii)Otherfinancialliabilities-current 9(c) 61,71,048 61,71,048 55,09,031 55,09,031

Total financial liabilities 2,20,92,501 2,20,92,501 2,19,71,554 2,19,71,554

Fair value hierarchy

Fairvalueofthefinancialinstrumentsisclassifiedinvariousfairvaluehierarchiesbasedonthefollowingthreelevels:

Level 1: Quotedprices(unadjusted)inactivemarketforidenticalassetsorliabilities.TheMutualFundsarevaluedusingtheclosingNAV.

Level 2:Inputsotherthanquotedpriceincludingwithinlevel1thatareobservablefortheassetorliability,eitherdirectly(i.e.asprices)orindirectly(i.e.derivedfromprices).

Thefairvalueoffinancialinstrumentsthatarenottradedinanactivemarketisdeterminedusingvaluationtechniqueswhichmaximizetheuseofobservablemarketdataandrelyaslittleaspossibleonentity-specificestimates.Ifsignificantinputsrequiredtofairvalueaninstrumentareobservable,theinstrumentisincludedinLevel2.

Level 3:Inputsfortheassetsorliabilitiesthatarenotbasedonobservablemarketdata(unobservableinputs)

Ifoneormoreofthesignificantinputsisnotbasedonobservablemarketdata,theinstrumentisincludedinlevel3.Thisisthecasewithlistedinstrumentswheremarketisnotliquidandforunlistedinstruments.

Thefairvalueoftradereceivablesandpayablesisconsideredtobeequaltothecarryingamountsoftheseitemsduetotheirshort–termnature.

Thefollowingtablepresentsthefairvaluehierarchyofassetsandliabilitiesmeasuredatfairvalueonarecurringbasis

Particulars Fair Value Hierarchy (Level)


Fair value Fair value

A Financial Assetsa)Measuredatfairvaluethroughprofitorlossi)Investmentinmutualfunds 1 12,13,86,658 9,95,15,133

Total financial assets 12,13,86,658 9,95,15,133

TherearenotransfersbetweenLevel1,Level2andLevel3duringtheyear.

Note 19: Financial risk management

TheCompany’sactivitiesexposeittoprimarilyCreditRiskandLiquidityRisk,whicharenotmaterialgiventhenatureofbusinessandlimitedriskundertakenbytheCompany.

TheCompany’sriskmanagementframeworkisdesignedtobringrobustnesstotheriskmanagementprocesseswithinthecompanyandtoaddresstherisksintrinsictooperations,financialsandcompliancesarisingoutoftheoverallstrategyoftheCompany.

a) Liquidity risk

Liquidity risk isdefinedas the risk that theCompanywillnotbeable to settleormeet itsobligationsas theybecomedue.TheCompany’s investmentdecisions relating todeploymentof surplus liquidityareguidedby the tenetsof safety, liquidityandreturn.TheCompanymanages its liquidity riskbyensuringthat itwillalwayshavesufficientliquiditytomeetitsliabilitieswhendue.Investmentsaremadewitharangeofmaturities,generallymatchingtheprojectedcashflowsandspreadingthesameacrosswiderangeofcounterparties.

Thetablebelowprovidesdetailsregardingtheremainingcontractualmaturitiesofsignificantfinancialliabilitiesatthereportingdate.

Current

Particulars


Contractual cash flows *

Carrying value 0 - 1 month 1 - 3 months More than 3 months Total

Tradepayable 1,45,48,692 1,45,48,692 – – 1,45,48,692

Otherfinancialliabilities 61,71,048 61,71,048 – – 61,71,048

Total 2,07,19,740 2,07,19,740 – – 2,07,19,740

Particulars



Carrying value 0 - 1 month 1 - 3 months More than 3 months Total

Tradepayable 1,64,62,523 1,64,62,523 – – 1,64,62,523

Otherfinancialliabilities 55,09,031 55,09,031 – – 55,09,031

Total 2,19,71,554 2,19,71,554 – – 2,19,71,554

171



Non-Current

Particulars



Carrying value 1 - 2 years 2 - 3 years More than 3 years Total

Otherfinancialliabilities 13,72,761 2,74,552 3,43,190 7,55,019 13,72,761

Total 13,72,761 2,74,552 3,43,190 7,55,019 13,72,761

Particulars



Carrying value 1 - 2 years 2 - 3 years More than 3 years Total

Otherfinancialliabilities – – – – –

Total – – – – –

*ThetableshavebeendrawnupbasedonundiscountedcashflowsoffinancialliabilitiesbasedontheearliestdateonwhichtheCompanycanberequiredtopay.Thetablesincludebothinterestandprincipalcashflows.

b) Credit risk CreditriskistheriskthatcounterpartywillnotmeetitsobligationsunderacontractwhichmayleadtoafinanciallosstotheCompany.TheCompanyisexposedtocreditriskfrom

itsoperatingactivities(primarilytradereceivables).

TheCompanyhasapolicyofextendingcreditonlyafterdueapprovalsandevaluationintermsoftheagreedterms.Basedonnegotiations,bankguaranteeisalsotakenfromsomeofthecustomerstowhomcreditisextended,butadjustmenttothesamearemadeonlybasedonmutualagreement.Suchcreditlimitsextendedtotradereceivablesaremonitoredbythemanagementcommitteeandprotectiveactioninitiatedtorecovertheamount.Inviewoftheshortnatureofitstradereceivables,theCompanymakesprovisionforbadanddoubtfuldebtsonanindividualbasis.WriteoffsaremadewiththeapprovaloftheBoardofDirectors.

Tradereceivablesareinitiallymeasuredattransactionvalue,whichisthefairvalueandsubsequentlyretainedatcostlessprovisionforimpairment.ImpairmentlossesarerecognizedintheprofitorlosswherethereisobjectiveevidencethattheCompanywillnotbeabletocollectallthedueamounts.

Interestisgenerallynotchargedand/orpaidoncustomerbalances.

Therearenosignificantconcentrationsofcreditriskwithrespecttotradereceivablesduetothediversecustomerbase.Ourhistoricalexperienceofcollectingreceivables,supportedbythelevelofdefault,sotradereceivablesareconsideredtobeasingleclassoffinancialassets.AllCustomerbalanceswhichareoverdueformorethan180daysareevaluatedforprovisionandconsideredforexpectedcreditlossprovisiononanindividualbasis.Basedonthehistorictrendandexpectedperformanceofthecustomers,theCompany,hascomputedexpectedcreditlossallowancesfordoubtfulreceivables.

Movementintheprovisionsforimpairmentoftradereceivablesandcontractuallyreimbursablecostisasfollows:

As at 31st March, 2019 As At 31st March, 2018

Balanceatthebeginningoftheyear (6,32,73,970) (3,92,97,514)

Providedduringtheyear (1,68,82,366) (2,51,00,000)

Adjustedduringtheyear 1,51,49,806 11,23,544

Balanceattheendoftheyear (6,50,06,530) (6,32,73,970)

Note 20: Capital Management

Risk Management

TheCompany’sfinancialstrategyaimstoprovideadequatecapitalforitsgrowthplansin‘upscaletomidmarketsegment’forgeneratingsuperiorreturnsandsustainedstakeholdervalue.TheCompanyfundsitsoperationsmainlythroughinternalaccruals.TheCompanydoesnothaveborrowingsandcontinuestoinvestitssurplusfundsforitsfuturegrowthasagoingconcernwithinthetenetsofSafety,LiquidityandReturns.

Note 21: Related party disclosures

a) Names of related parties and nature of relationship:

i) Wherecontrolexists: HoldingCompany ITCLimited

ii) KeyManagementPersonnel:

NakulAnand Director

JagdishSingh Director

SamirMecherivalappilChandrasekharan# ManagingDirector

iii) Otherrelatedpartieswithwhomtransactionshavetakenplaceduringtheyear:

Associates InternationalTravelHouseLimited

EntityundercontroloftheITCGroup ITCInfotechIndiaLimited

JointVenture MaharajaHeritageResortsLimited

172


Note 22: Commitments

Capitalexpenditurecontractedforattheendofthereportingperiodbutnotrecognisedasliabilityisasfollows:


Property,plantandequipment 4,68,176 –

Note 23 Lease arrangements

TheCompany’ssignificantleasingarrangementsareinrespectofoperatingleasesforpremises(residential,officeetc.).Theseleasingarrangementswhicharecancellablerangebetween11monthsand2yearsgenerally,orlonger,andareusuallyrenewablebymutualconsentonmutuallyagreeableterms.TheaggregateleaserentalspayablearechargedasrentunderNote15.

Note 24 Segment reporting

TheoperatingsegmentofthecompanyhasbeenidentifiedinamannerconsistentwiththeinternalreportingprovidedtotheManagementCommitteeheadedbytheManag-ingDirector.TheCommitteeisthechiefoperatingdecisionmakerbasedonwhichthereisonlyoneoperatingsegmentinwhichthecompanyoperatesi.e.operatinghotelsinthemid-markettoupscalesegmentandwithinonegeographicalsegmenti.e.India.TheCompanyisnotreliantonrevenuesfromoperationswithanysingleoperatinghotel,customeranddoesnotreceive10%ormoreofit’srevenuefromoperatingfeefromanysingleexternaloperatinghotel.Allthenon-currentassetarelocatedinIndia.

Note 25 Contingent Liability


ClaimsagainsttheCompanynotacknowledgedasdebts

IncometaxDemandsfromincometaxauthoritiesunderappealforassessmentyear2012-13 – 67,57,173

Incometaxappealforassessmentyear2012-13onaccountofallegeddifferenceofreceiptsappearinginForm26ASandincomecreditedtothestatementofprofitandlosswasdecidedinfavouroftheCompanyduringtheyear.


b) Summary of transactions / balances :

Transactions / balances Holding Company Other Related Parties Key Management Personnel

31st March, 2019

31st March, 2018

31st March, 2019

31st March, 2018

31st March, 2019

31st March, 2018

1 Operatingandmarketingfees* 56,62,841 1,30,56,284 – – – –

2 Purchaseofservices-ITCLimited-InternationalTravelHouseLimited-ITCInfotechIndiaLimited

13,94,760––

3,82,305––

–45,20,4997,08,000

–32,84,8807,03,500

–––

–––

3 Rent* 17,86,291 17,44,117 – – – –

4 Remunerationofmanagers/staffondeputationrecovered*-ITCLimited

91,03,866 1,57,25,255 – – – –

5 Remuneration of managers on deputation reimbursed ((includingremunerationof-ManagingDirector)`1,68,52,907(Previousyear-`94,41,869)asdisclosedbelow)

4,44,52,815 6,08,24,904 – – – –

6 Dividendpayments 56,25,100 56,25,100 – – – –

7 Expense recovered during the year (amount due on account ofpaymentsmadeonbehalfofrelatedparties)-ITCLimited-MaharajaHeritageResortsLimited

31,35,706–

92,45,587–

––

–12,636

––

––

8 Expensereimbursedduringtheyear(amountduetorelatedpartiesonaccountofpaymentsmadebythemonbehalfoftheCompany)-ITCLimited(includingremunerationof-ManagingDirector`Nil(Previousyear- ` 500,000/-))-InternationalTravelHouseLimited

3,48,67,922

–

3,46,69,790

–

–

2,37,458

–

84,569

–

–

–

–

9 RemunerationtoKeyManagementPersonnel@-SureshKumar-SamirMecherivalappilChandrasekharan

––

––

––

––

–1,96,46,744

80,94,15529,30,116

10 ClosingBalances:(i)Tradereceivables

-ITCLimited(ii)Othercurrentassets

-ITCLimited(iii)Tradepayables

-ITCLimited-InternationalTravelHouseLimited

(iv)Otherfinancialliabilities-ITCLimited

(v)OtherFinancialliabilities-Noncurrent-ITCLimited

4,10,517

8,20,234

43,45,105–

699,991

13,72,761

3,74,139

7,79,804

48,62,790–

15,84,256

–

–

–

–496,523

-

–

–

–

–4,48,256

–

–

–

–

––

–

–

–

–

––

–

–

* IncludesGST/Servicetax # TheremunerationissubjecttotheapprovalofshareholdersintheensuingAnnualGeneralMeetingoftheCompany. @ ExcludesESOS/ESAR(ReferNote26) Note: TheremunerationpaidtotheManagingDirectorduetotheinadequacyofprofits,issubjecttotheapprovalofshareholdersbyspecialresolutionintheensuingAnnual

GeneralMeetingoftheCompany.

173



Note 26 Employee share based compensation (i) TheeligibleemployeesofITCLimited(ITC),whoaredeputedtotheCompanyatitsrequest,arecoveredundertheITCEmployeeStockOptionSchemes(ITCESOS)and

theITCEmployeeCashSettledStockAppreciationLinkedRewardPlan(ITCESARPlan)inaccordancewiththetermsandconditionsofsuchschemes,detailsofwhichareasunder:

ITCESOS:

Each Option entitles the holder thereof to apply for and be allotted ten ordinary shares of `1.00 each of ITC upon payment of the exercise price during theexerciseperiod.Theseoptions vestover aperiodof three years from thedateofgrant andare exercisablewithin aperiodof five years from thedateof vesting. Theoptionshavebeengrantedatthe‘marketprice’asdefinedundertheSecuritiesandExchangeBoardofIndia(ShareBasedEmployeeBenefits)Regulations,2014.

ITCESAR:

UndertheITCESARPlan,eligibleemployeeswouldreceivecashlinkedtoappreciationinthevalueofthesharesofITCinaccordancewiththetermsandconditionsofthisPlan.Thestockappreciationunits(SARs)vestoveraperiodoffiveyearsfromthedateofgrantandentitleseachESARgranteetotheappreciationforthetotalnumberofESARUnitsvested.

(ii) ThecostofstockoptionsgrantedunderITCESOS/SARsgrantedunderITCESARhavebeenrecognizedasequitysettled/cashsettledsharebasedpaymentsrespectivelyinaccordancewithIndAS102–ShareBasedPayment.Intermsofsaiddeputationarrangement,theCompanyhasaccountedforthecostofthefairvalueofoptions/stockappreciationunitsgrantedtothedeputedemployeeson-chargebyITC.Thefairvalueoftheoptions/SARsgrantedisdetermined,usingtheBlackScholesOptionPricingmodel,byITCforallthegranteescoveredunderITCESOS/ITCESARasawhole.

(iii) ThesummaryofmovementofsuchstockoptionsgrantedbyITC(ITCESOS)andstatusoftheoutstandingoptionsisasunder:

Particulars As at 31st March, 2019


No. of Options No. of Options

Outstandingatthebeginningoftheyear 64,329 3,11,986

Add:Grantedduringtheyear* – 27,815

Add:EffectofBonus – –

Less:Lapsedduringtheyear – 2,68,725

Less:Exercisedduringtheyear 12,906 6,747

Outstandingattheendoftheyear 51,423 64,329

Optionsexercisableattheendoftheyear 40,583 41,506

OptionsVestedandExercisableduringtheyear 11,983 13,036

* IncludesNil(Previousyear17,750)stockoptionsgrantedtotheKeyManagementPersonneloftheCompany.Sincesuchstockoptionsarenottradeable,noperquisiteorbenefitisimmediatelyconferreduponanemployeebysuchgrant.

Note:TheWeightedaverageexercisepriceofthestockoptionsgrantedtoalloptioneesundertheITCESOSiscomputedbyITCasawhole.

(iv) InaccordancewithIndAS102,anamountof`42,81,759(PreviousYear`2,64,74,501)towardsITCESOSand`13,72,761(Previousyear-`Nil)towardsITCESARhasbeenrecognizedasemployeebenefitsexpense(ReferNote14).Suchchargehasbeenrecognizedasemployeebenefitsexpensewithcorrespondingcredittocurrent/non–currentfinancialliabilities,asapplicable.

Outoftheabove,`Nil(PreviousYear`1,86,74,326)isattributabletokeymanagementpersonnel[Mr.SureshKumar`Nil(PreviousYear`1,86,74,326)]forITCESOSand` 8,26,609(SamirMecherivalappilChandrasekharan)(Previousyear`Nil)forITCESAR.

Note 27 Other Disclosure (i) MinistryofCorporateAffairs(MCA)hasnotifiedIndAS115–“RevenuefromContractswithCustomers”effective1stApril,2018,TheCompanyhasadoptedIndAS115

usingmodifiedretrospectivemethod,whereintheCompanyhaselectedtoapplypracticalexpedientforcontractsthatwerenotcompletedonorbefore31stMarch,2018.Accordingly,thecomparativeshavenotbeenretrospectivelyadjusted.TheCompanyhasevaluatedandthereisnomaterialimpactonthefinancialstatementsresultingfromtheimplementationofthisstandard.

TheCompanyhasappliedthepracticalexpedientinIndAS115,accordingly,theCompanyhasnotdisclosedtheaggregatetransactionpriceallocatedtounsatisfied(orpartiallysatisfied)performanceobligationswhichpertaintocontractswhererevenuerecognisedcorrespondstothevaluetransferredtocustomerisoutcomebasedandeventbasedcontracts(ReferNote11).

NosignificantjudgmentshavebeenmadebytheCompanyinapplyingIndAS115thatsignificantlyaffectthedeterminationoftheamountandtimingofrevenuefromcontractswithcustomers.

(ii) MinistryofCorporateAffairs(MCA)hasissuedtheCompanies(IndianAccountingStandards)SecondAmendmentRules,2019on30thMarch,2019notifyingnewStandardIndAS116“Leases’ThisIndASisapplicableforannualperiodbeginningonorafterApril01,2019.TheCompanyexpectsthattherewillbenomaterialimpactonthefinancialstatementsresultingfromtheimplementationofthisstandard.

(iii) IndAS12Incometaxes(amendmentsrelatingtoincometaxconsequencesofdividendanduncertaintyoverincometaxtreatments).TheCompanydoesnotexpectanysignificantimpactoftheamendmentonitsfinancialstatements.

Note 28 TheFinancialstatementswereauthorisedforissuebythedirectorson23rdApril,2019.

For Price Waterhouse Chartered Accountants LLP OnbehalfoftheBoardofDirectorsFirmRegistrationNo.:012754N/N500016 Ashok Narayanaswamy Samir Mecherivalappil Chandrasekharan Jagdish Singh Partner ManagingDirector DirectorMembershipNumber:095665 DIN08064002 DIN00042258Place:Gurugram Place:Gurugram Place:GurugramDate:23rdApril,2019 Date:23rdApril,2019 Date:23rdApril,2019

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