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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
FORTUNE PARK HOTELS LIMITED
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.
On behalf of the Board
Dated : 23rd April, 2019 Samir MC Managing DirectorPlace : Gurugram J. Singh Director
151
FORTUNE PARK HOTELS LIMITED
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.
On behalf of the Board
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
FORTUNE PARK HOTELS LIMITED
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
No. of Shares % of total Shares of the Company
No. of Shares % of total Shares of the Company
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
FORTUNE PARK HOTELS LIMITED
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
On behalf of the Board
Dated : 23rd April, 2019 Samir MC Managing Director
Place : Gurugram J. Singh Director
154
FORTUNE PARK HOTELS LIMITED
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
FORTUNE PARK HOTELS LIMITED
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.
ForPriceWaterhouseCharteredAccountantsLLP
FirmRegistrationNumber:012754N/N500016
CharteredAccountants
AshokNarayanaswamy
Place:Gurugram Partner
Date:April23,2019 MembershipNumber:095665
156
FORTUNE PARK HOTELS LIMITED
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.
ForPriceWaterhouseCharteredAccountantsLLP
FirmRegistrationNumber:012754N/N500016
CharteredAccountants
AshokNarayanaswamy
Place:Gurugram Partner
Date:April23,2019 MembershipNumber:095665
Annexure B to Independent Auditor’s Report
157
FORTUNE PARK HOTELS LIMITED
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
FORTUNE PARK HOTELS LIMITED
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
FORTUNE PARK HOTELS LIMITED
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
FORTUNE PARK HOTELS LIMITED
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.)
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FORTUNE PARK HOTELS LIMITED
Notes forming part of the financial statements (Contd.)
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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FORTUNE PARK HOTELS LIMITED
Notes forming part of the financial statements (Contd.)
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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FORTUNE PARK HOTELS LIMITED
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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FORTUNE PARK HOTELS LIMITED
Notes forming part of the financial statements (Contd.)(Allamountsinrupeesunlessotherwisestated)
Note 6: Financial assets - current
Note 6(a) Investments
As at 31st March, 2019
As at 31st March, 2018
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
As at 31st March, 2019
As at 31st March, 2018
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
As at 31st March, 2019
As at 31st March, 2018
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
As at 31st March, 2019
As at 31st March, 2018
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
As at 31st March, 2019
As at 31st March, 2018
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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FORTUNE PARK HOTELS LIMITED
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
As at 31st March, 2019 Asat31stMarch,2018
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
As at 31st March, 2019 Asat31stMarch,2018
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
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FORTUNE PARK HOTELS LIMITED
Notes forming part of the financial statements (Contd.)(Allamountsinrupeesunlessotherwisestated)
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
As at 31st March, 2019 As at 31st March, 2018
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
As at 31st March, 2019 As at 31st March, 2018
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
For the year ended 31st March, 2018
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
For the year ended 31st March, 2019
For the year ended 31st March, 2018
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
For the year ended 31st March, 2019
For the year ended 31st March, 2018
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.
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FORTUNE PARK HOTELS LIMITED
Notes forming part of the financial statements (Contd.)(Allamountsinrupeesunlessotherwisestated)
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
Present value of obligation
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:
31st March, 2019 31stMarch,2018
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
FORTUNE PARK HOTELS LIMITED
Notes forming part of the financial statements (Contd.)(Allamountsinrupeesunlessotherwisestated)
Thesignificantactuarialassumptionswereasfollows:
31st March, 2019 31stMarch,2018
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
As At 31st March, 2019`
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
As At 31st March, 2019`
AsAt31stMarch,2018`
Present value of obligation
Present value of obligation
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
FORTUNE PARK HOTELS LIMITED
Note 17: Earnings per equity share
For the year ended 31st March, 2019
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.
Notes forming part of the financial statements (Contd.)(Allamountsinrupeesunlessotherwisestated)
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
For the year ended 31st March, 2019
Fortheyearended 31stMarch,2018
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
For the year ended 31st March, 2019
Fortheyearended 31stMarch,2018
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
For the year ended 31st March, 2019
Fortheyearended 31stMarch,2018
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
FORTUNE PARK HOTELS LIMITED
Notes forming part of the financial statements (Contd.)(Allamountsinrupeesunlessotherwisestated)
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)
As at 31st March, 2019 As at 31st March, 2018
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
As at 31st March, 2019
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
As at 31st March, 2018
Contractual cash flows *
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
FORTUNE PARK HOTELS LIMITED
Notes forming part of the financial statements (Contd.)(Allamountsinrupeesunlessotherwisestated)
Non-Current
Particulars
As at 31st March, 2019
Contractual cash flows *
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
As at 31st March, 2018
Contractual cash flows *
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
FORTUNE PARK HOTELS LIMITED
Note 22: Commitments
Capitalexpenditurecontractedforattheendofthereportingperiodbutnotrecognisedasliabilityisasfollows:
As at 31st March, 2019 Asat31stMarch,2018
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
As at 31st March, 2019 Asat31stMarch,2018
ClaimsagainsttheCompanynotacknowledgedasdebts
IncometaxDemandsfromincometaxauthoritiesunderappealforassessmentyear2012-13 – 67,57,173
Incometaxappealforassessmentyear2012-13onaccountofallegeddifferenceofreceiptsappearinginForm26ASandincomecreditedtothestatementofprofitandlosswasdecidedinfavouroftheCompanyduringtheyear.
Notes forming part of the financial statements (Contd.)(Allamountsinrupeesunlessotherwisestated)
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
FORTUNE PARK HOTELS LIMITED
Notes forming part of the financial statements (Contd.)(Allamountsinrupeesunlessotherwisestated)
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
As at 31st March, 2018
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