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GMR Hospitality and Retail Limited
(Formerly known as GMR Hotels and Resorts Limited)
Ninth Annual Report FY 2016-17
Contents
General Information 2
Notice for the 9th Annual General Meeting 3
9th Board’s Report 9
Independent Auditor’s Report 42
Audited Financial Statements for the year
ended March 31, 2017
50
General Information
Company’s CIN U52100TG2008PLC60866
Board of Directors Mr. SGK Kishore
Mr. Rajesh Arora
Mr. P. Vijay Bhaskar Mr. Mohammed Ismail
Dr. Kavitha Gudapati
Statutory Auditors
M/s. S R Batliboi & Associates LLP Chartered Accountants
[Firm Registration No.101049W/E300004] The Oval Office 18, iLabs Centre
Hitech City, Madhapur Hyderabad -500 081, Telangana
Registered Office
GMR Aero Towers
Rajiv Gandhi International Airport Shamshabad, Hyderabad 500 108, Telangana
URL http://www.hyderabad.aero/gmr-hospitality-and-retail-limited.aspx
Branch Offices Hotel Division:
Novotel Hyderabad Airport
Rajiv Gandhi International Airport
Shamshabad, Hyderabad
Telangana- 500108
Hyderabad Duty Free Division:
Level-H
Rajiv Gandhi International Airport
Shamshabad, Hyderabad
Telangana- 500108
Registrar & Share Transfer Agent
(Operations Office)
Karvy Computershare Private Limited Karvy Selenium ,Tower-B, Plot Nos.31 & 32
Gachibowli, Financial District Nanakramguda, Serilingampally Hyderabad- 500 032, Telangana
Page No. 2
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
NOTICE TO THE MEMBERS OF GMR HOSPITALITY AND RETAIL LIMITED FOR THE NINTH ANNUAL GENERAL MEETING OF THE COMPANY
Notice is hereby given that the Ninth Annual General Meeting of the Members of GMR Hospitality and Retail Limited will be held on Monday, August 21, 2017
at 10.00 A.M at the Registered Office of the Company at GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad 500 108, at a shorter notice, to transact the following business:
ORDINARY BUSINESS
1. To consider and adopt the audited financial statements of the Company for
the financial year ended March 31, 2017 together with the reports of the
Board of Directors and Auditors thereon.
2. To appoint a Director in place of Mr. Rajesh Arora [DIN: 03174536], who retires by rotation and eligible for re-appointment.
3. To appoint Statutory Auditors of the Company and pass the following resolution as an Ordinary Resolution, with or without modification(s):
“RESOLVED THAT pursuant to the provisions of Section 139 and all other applicable provisions, if any, of the Companies Act, 2013 and the Companies
(Audit and Auditors) Rules, 2014, as amended from time to time, M/s. Deloitte Haskins & Sells, LLP, Chartered Accountants (Firm Registration No.
117366W/W-100018), be and is hereby appointed as Statutory Auditors of the Company to hold office from the conclusion of this (9th) Annual General
Meeting (AGM) till the conclusion of the AGM of the Company to be held in the year 2022 subject to the ratification by members at every Annual General Meeting to be held subsequent to the Ninth Annual General Meeting,
to examine and audit the accounts of the Company at a remuneration to be fixed by the board."
By Order of the Board GMR Hospitality and Retail Limited
Sd/-
Place: Hyderabad C. Bharathi Date : August 14, 2017 Company Secretary
ACS 30329
Page No. 3
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
NOTES:
1 A member entitled to attend and vote at the meeting is entitled to appoint a proxy to attend, instead of himself / herself and such proxy need not be a member. However, the duly filled in and signed
proxy form(s) in order to be valid, shall be lodged with the Company at its Registered Office not less than forty eight hours before the
commencement of the meeting.
2 Members/Proxies are requested to bring their attendance slip along with
their copy of annual report to the Meeting.
3 Corporate members intending to send their authorised representative(s) to attend the Meeting are requested to send to the Company a certified copy of the Board Resolution authorising their representative to attend
and vote on their behalf at the Annual General Meeting.
4 Relevant documents referred to in this Notice shall be open for inspection by the members of the Company at the registered office of the Company between 10.00 am to 1.00 pm on all working days, up to the date of the
Annual General Meeting of the Company.
5 As required by Secretarial Standard (SS-2) on General Meetings, issued by Institute of Company Secretaries of India (ICSI), Route Map for venue of the meeting is enclosed.
6 The present statutory auditors of the Company M/s. S R Batliboi & Associates, LLP, Chartered Accountants, (Firm Registration No.
101049W/E00004), hold office up to the conclusion of the Ninth Annual General meeting of the Company. In terms of the provisions of the
Companies Act, 2013, they are eligible for further appointment of three years i.e. up to financial year ending 2019-20. However, they have expressed their unwillingness to get reappointed. Hence, the Management
of the Company has identified M/s. Deloitte Haskins and Sells, LLP, Chartered Accountants, Firm Registration Number: 117366W/W-100018
for appointment as the statutory auditors of the Company in place of M/s. S R Batliboi & Associates, LLP. The Audit Committee of the Company at the meeting held on July 25, 2017, has recommended the appointment of
M/s. Deloitte Haskins and Sells, LLP, Chartered Accountants as the statutory auditors of the Company to the Board of Directors and the Board
at its meeting held on July 25, 2017 has further recommended the appointment of M/s. Deloitte Haskins and Sells, LLP, Chartered Accountants as the statutory auditors of the Company to the
shareholders. M/s. Deloitte Haskins and Sells, LLP, Chartered Accountants, will hold the office from the conclusion of the Ninth Annual
General Meeting till the conclusion of Fourteenth Annual General Meeting of the Company to be held in the year 2022. The first year of the audit will
be of the financial statements for the year ending March 31, 2018.
Page No. 4
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ============================================================================================================== Brief Profile of Director seeking appointment at the Annual General Meeting- Mr. Rajesh Arora
Mr. Rajesh Arora is presently the Chief Financial Officer of GMR Hyderabad International Airport Ltd., which operates Rajiv Gandhi International Airport at
Hyderabad. He also serves as a Director on the Boards of GMR Hyderabad Aerotropolis Limited, GMR Hyderabad Aviation SEZ Limited, GMR Aerospace Engineering Limited, Hyderabad Menzies Air Cargo Private Limited and other
GMR Group Companies.
He is a Cost Accountant and B.Com (H) from Delhi University, and has about 27 years of professional experience in the Manufacturing and Infrastructure sectors and has rich experience in Corporate Finance, Accounts, Taxation, Corporate
Laws, etc.
In his previous profile at GMR, he was Chief Financial Officer-Joint Ventures & Corporate Integration for the Airport business of GMR Group. In this position, he made immense contribution to the Airports Sector, building robust relations with
joint venture partners and contributed significantly towards increasing shareholder's value in these joint ventures. He has also played an important role
in M&A activities of the Airports Sector. Prior to joining GMR Group in 2007, Mr. Rajesh Arora served in senior positions
in Chambal Fertilizers and Chemicals Limited.
Page No. 5
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
ATTENDANCE SLIP Ninth Annual General Meeting of GMR Hospitality and Retail Limited to be held on
Monday, August 21, 2017 at 10.00 A.M at the Registered Office of the Company at GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad 500 108, Telangana
Name of the Member. : ………............................................................................
Regd. Folio No. : .……………………………............................................................
*DP ID No. : ……............................................................................................. *Client ID No. : …………………………....................................................................
No. of shares held: …………………………...............................................................
Note: Member / Proxy must hand over the duly signed attendance slip at the venue.
* Applicable for the members holding shares in electronic form.
_______________________________________ Signature of the Member / Proxy
Page No. 6
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
FORM NO MGT-11 PROXY FORM
(Pursuant to Section 105(6) of the Companies Act, 2013 and rule 19(3) of the Companies
(Management and Administration) Rules, 2014)
CIN : U52100TG2008PLC060866 Name of the Company : GMR Hospitality and Retail Limited Registered Office : GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad 500 108, Telangana
Name of the Member(s)
Registered Address
E mail Id
Folio No. / Client Id
DP ID
I / We, being the holder(s) of shares of the above named company, hereby appoint: (1) . ……………………………………………… r/o …………………………………………
having email ID …………………………………….. failing him/her; (2) . ……………………………………………… r/o …………………………………………
having email ID …………………………………….. failing him/her; (3) . ……………………………………………… r/o …………………………………………
having email ID …………………………………….. failing him/her; as my / our proxy to attend and vote (on a poll) for me/us and on my/our behalf at the Ninth
Annual General Meeting of the Company, to be held on Monday, the August 21, 2017 at 10.00 AM at the Registered Office of the Company at GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad 500 108, Telangana and at any adjournment thereof in respect of such resolutions as are indicated below:
SNo Particulars of Resolution For Against
1 Adoption of the audited financial statements of the Company for the financial year ended March 31, 2017 together with the reports of the Board of Directors and Auditors thereon.
2 Appointment of a Director in place of Mr. Rajesh Arora, who retires
by rotation and eligible for re-appointment.
3 Appointment of M/s. Deloitte Haskins & Sells, LLP, Chartered Accountants as Statutory Auditors the Company
Signed this ________ day of _____________________, 2017.
Signature of the Shareholder…………………………………………… Signature of Proxy holder(s)
(1) Name …………………………………………..
(2) Name …………………………………………..
(3) Name …………………………………………..
Notes:
1) This form of Proxy in order to be effective should be duly completed and deposited at the Registered Office of the Company, not less than 48 hours before the commencement of the meeting.
2) This is only optional. Please put “” in the appropriate column against the resolutions
indicated in the Box. If you leave the ‘For’ or ‘Against’ column blank against any or all the resolutions, your Proxy will be entitled to vote in the manner as he / she thinks appropriate.
Affix Revenue Stamp Re 1/-
Page No. 7
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
ROUTE MAP TO THE VENUE
of the Ninth AGM of GMR Hospitality and Retail Limited,
to be held on Monday, August 21, 2017 at 10.00 AM
at GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad 500 108, Telangana
Rajiv Gandhi International Airport
Rotary No.3
Venue of AGM GMR Aero Towers
Decathlon Sports Store
GMR HIAL Airport Office (Project Site
Office)
Airport Approach Road
Page No. 8
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ============================================================================================================== REPORT OF THE DIRECTORS FOR THE FINANCIAL YEAR ENDED MARCH 31, 2017
To
The Members
GMR Hospitality and Retail Limited Your Directors hereby present the Ninth Directors’ Report and the Audited
Financial Statements for the year ended March 31, 2017 together with the Auditors’ Report thereon.
Amalgamation of Hyderabad Duty Free Retail Limited (HDFRL) with GMR Hospitality and Retail Limited (GHRL)
As part of a business strategy and in order to have a simplified management
structure with better administration at reduction in costs, GMR Hyderabad International Airport Limited (GHIAL), the holding company proposed to merge
HDFRL with GHRL. Accordingly, the Scheme of Arrangement between HDFRL and GHRL and their respective Shareholders ("the Scheme") for the amalgamation of HDFRL with GHRL was prepared and filed before Hon‟ble High Court at
Hyderabad on 24.11.2016.
Upon the notification of sections 233 to 240 of the Companies Act, 2013 by Ministry of Corporate Affairs (MCA), the jurisdiction of sanctioning the Scheme of Arrangement envisaging the amalgamation of HDFRL with GHRL pending before
the High Court vested to National Company Law Tribunal, Hyderabad Bench (NCLT).
The petition praying the sanction of the Scheme was heard by NCLT on February 28, 2017 and NCLT pronounced the Order sanctioning the scheme on April 18,
2017 by specifying the appointed date as April 1, 2016.
The effective date of the scheme is April 27, 2017, being the certified true copy of the NCLT Order filed in e-form INC-28 with the ROC, Hyderabad. By then HDFRL got dissolved without being wound up.
Upon the Scheme becoming effective, GHRL has to carry on the business of
HDFRL under its name. Thus, GHRL amended its object clause of Memorandum of Association by inserting the main objects of HDFRL. In order to depict the both the businesses, (i.e. Hotel-existing business and Duty Free Retail- Business
of merged entity) the name of the company was changed from GMR Hotels and Resorts Limited to GMR Hospitality and Retail Limited. And the Company has
named its two units of businesses as (i) Hotel Division and (ii) Hyderabad Duty Free Division.
Pursuant to clause 11 of the sanctioned scheme, GHRL has allotted 1,69,50,000 equity shares of Rs.10/- to GMR Hyderabad International Airport Limited in the
exchange ratio of 1 : 1 for transfer and vesting of the Undertaking of HDFRL. GHRL has prepared the financial statements for the FY 2016-17 by combining
both GHRL and HDFRL books of accounts in accordance with “Pooling of Interest
Page No. 9
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ============================================================================================================== Method” as per IND AS – 103 (Business combinations of entities under common control).
FINANCIAL RESULTS
(Amount in Crores)
Particulars
For the year ended
March 31, 2017
For the year ended
March 31, 2016
Income from Operations 167.47 56.87
Other Income 2.53 0.31
Total Income 170.00 57.18
Total Expenses 133.38 38.02
EBITDA 36.62 19.16
Finance Charges 23.53 22.16
Depreciation and Amortization 17.81 16.35
Profit (Loss) before Taxation (4.72) (19.35)
Deferred tax charge/Credit (1.69) --
Profit (Loss) after Taxation (3.01) (19.35)
CHANGE IN THE NATURE OF BUSINESS, IF ANY There was no change in the nature of business of your Company during the
financial year 2016-17.
However, subsequent to amalgamation (i.e. w.e.f. April 27, 2017), the Company is carrying on the business of retailing different categories of products on duty/tax free basis at the international terminals of Rajiv Gandhi International
Airport, Shamshabad, Hyderabad in addition to the existing Hotel Business.
SIGNIFICANT AND MATERIAL ORDERS PASSED BY THE REGULATORS NCLT has vide its Order dated April 18, 2017 sanctioned the scheme of
arrangement envisaging the amalgamation of Hyderabad Duty Free Retail Limited with GMR Hotels and Resorts Limited.
There are no other significant and material orders passed by the Regulators or Courts or Tribunals impacting the going concern status and the Company’s
operations in future.
DIVIDEND
Your directors did not recommend any dividend for the financial year 2016 -17. APPROPRIATIONS TO RESERVES
The Company has not transferred any amount to any reserve during the period
under review.
Page No. 10
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ============================================================================================================== MATERIAL CHANGES AND COMMITMENTS AFFECTING THE FINANCIAL
POSITION OF THE COMPANY Pursuant to the sanctioned scheme of amalgamation, all the assets and liabilities
of Hyderabad Duty Free Retail Limited transferred to and vested in the Company at their respective book values with effect from April 1, 2016. Hence the financial
statements of the company for the financial year 2016-17 were prepared by combining with the books of accounts of Hyderabad Duty Free Retail Limited.
Subsequent to the amalgamation, the company is benefitted to attain a greater financial strength by pooling of financials of both companies. The Company will
achieve higher long-term financial returns by merging both the companies’ managerial and technical resources, personnel capabilities, skills, expertise and technologies.
DIRECTORS AND KEY MANAGERIAL PERSONNEL
As on date of this report, the Board of Directors and Key Managerial Personnel (KMP) of your Company presently comprise of the following:
SL. No. Name of the Director Designation
1 Mr. SGK Kishore Director
2 Mr. Rajesh Arora Director
3 Mr. P Vijay Bhaskar Independent Director
4 Mr. Mohammed Ismail Independent Director
5 Dr. Kavitha Gudapati Independent Director
SL. No. Name of the Key Managerial Personnel Designation
1 Mr. Arunangshu Ghosh Manager
2 Mr. Venu Madhav Tenjarla Chief Financial Officer
3 Ms. C. Bharathi Company Secretary
Changes in the Composition of Directors and KMPs during the year: 1) Mr. P. Vijay Bhaskar was appointed as an Additional director under
independent category with effect from April 23, 2016 and his appointment has been regularized in the Eighth Annual General Meeting of the Company
held on September 28, 2016. 2) Mrs. Siva Kameswari Vissa, Independent Director resigned from the Board of
the Company with effect from September 25, 2016.
3) Dr. Kavitha Gudapati and Mr. Mohammed Ismail, Independent Directors were appointed in the Eighth Annual General Meeting of the Company held
on September 28, 2016. 4) Mr. C. Prasanna, Director resigned from the Board of the Company with
effect from October 17, 2016.
5) Mr. Arafat Ahmed Sheriff resigned as Manager of the Company with effect from June 30, 2016.
Page No. 11
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ============================================================================================================== 6) Mr. Arunangshu Ghosh was appointed as Manager of the Company with
effect from July 22, 2016 for a period of two years.
7) Ms. C. Bharathi was appointed as Company Secretary of the Company with effect from October 25, 2016 in place of Mr. Pankaj Kumar Mishra.
Director retiring by rotation:
Mr. Rajesh Arora, Director will be retiring by rotation at the ensuing Annual General Meeting of the Company and being eligible, offer himself for re-
appointment. The Directors recommends his reappointment.
COMMITTEES OF BOARD
As on date of this report, in accordance with the Companies Act, 2013, the
Board has following Committees:
Name of the Board Committee Composition
Audit Committee Mr. P. Vijay Bhaskar - Chairman Mr. Rajesh Arora- Member
Dr. Kavitha Gudapati- Member
Nomination and Remuneration Committee
Dr. Kavitha Gudapati – Chairperson Mr. Rajesh Arora- Member
Mr. P. Vijay Bhaskar- Member
NUMBER OF MEETINGS OF THE BOARD
Number of Board Meetings held during financial year 2016-17 and details of attendance of Directors (Attended-Yes; Leave of Absence-LOA, Not Applicable - NA) are as under:
SL. No
Name of the Director 23.04.2016 22.07.2016 11.08.2016 25.10.2016
18.01.2017
1 Mr. SGK Kishore Yes Yes Yes LOA Yes
2 Mr. C. Prasanna LOA LOA LOA NA NA
3 Mr. Rajesh Arora Yes Yes Yes Yes Yes
4 Mrs. Siva Kameswari Vissa
Yes Yes Yes NA NA
5 Mr. P. Vijay Bhaskar Yes Yes Yes Yes Yes
6 Dr. Kavitha Gudapati NA NA NA Yes Yes
7 Mr. Mohammed Ismail NA NA NA Yes Yes
Audit Committee Meetings:
There were five Audit Committee Meetings held during the financial year 2016-17 and the details of attendance of the Members are as under:
SL. No
Name of the Member 23.04.2016 22.07.2016 11.08.2016 25.10.2016
18.01.2017
1 Mr. Rajesh Arora Yes Yes Yes Yes Yes
2 Mrs. Siva Kameswari Vissa
Yes Yes Yes NA NA
3 Mr. P Vijay Bhaskar NA Yes Yes Yes Yes
4 Dr. Kavitha Gudapati NA NA NA Yes Yes
Page No. 12
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ============================================================================================================== Audit Committee was reconstituted by the Board on September 28, 2016 by inducting Dr. Kavitha Gudapati as the Member in place of Mrs. Siva kameswari
Vissa. Nomination and Remuneration Committee Meetings:
There were three Nomination and Remuneration Committee Meetings held
during the financial year 2016-17 and the details of attendance of the Members were as under:
SNo
Name of the Committee Member
23.04.2016 22.07.2016 25.10.2016
1 Mr. Rajesh Arora Yes Yes Yes
2 Mrs. Siva kameswari Vissa Yes Yes NA
3 Mr. P Vijay Bhaskar NA Yes Yes
4 Dr. Kavitha Gudapati NA NA Yes
Nomination and Remuneration Committee was reconstituted by the Board on September 28, 2016 by inducting Dr. Kavitha Gudapati as the Member in place
of Mrs. Siva Kameswari Vissa.
STATEMENT ON DECLARATION OF INDEPENDENT DIRECTORS Based on the declarations / disclosures received from the Independent Directors
and on evaluation of the relationships disclosed, the following are the Independent Directors in terms of Section 149(6) of the Companies Act, 2013 :-
Mr. P. Vijay Bhaskar
Dr. Kavitha Gudapati Mr. Mohammed Ismail
The Company has received all the declarations / disclosures as required under the Companies Act, 2013 from the Independent Directors.
DIRECTORS’ RESPONSIBILITY STATEMENT
To the best of their knowledge and belief and according to the information and explanations obtained by them, your Directors make the following statements in
terms of Section 134(3)(c) of the Companies Act, 2013:
a) that in the preparation of the annual financial statements for the year ended March 31, 2017, the applicable accounting standards have been followed along with proper explanation relating to material departures, if
any;
b) that such accounting policies as mentioned in Note 2.1 of the Notes to the financial statements have been selected and applied consistently and judgment and estimates have been made that are reasonable and prudent
so as to give a true and fair view of the state of affairs of the Company as at March 31, 2017 and of the profit and loss of the Company for the year
ended on that date;
Page No. 13
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
c) that proper and sufficient care has been taken for the maintenance of
adequate accounting records in accordance with the provisions of the Companies Act, 2013 for safeguarding the assets of the Company and for preventing and detecting fraud and other irregularities;
d) that the annual financial statements have been prepared on a going
concern basis;
e) that proper internal financial controls to be followed by the Company have
been laid down and that the financial controls are adequate and were operating effectively;
f) that proper systems have been devised to ensure compliance with the
provisions of all applicable laws and that such systems were adequate and
operating effectively.
SHARE CAPITAL The Authorised Share Capital of your Company has become Rs.130,00,00,000/-
divided into 13,00,00,000 equity shares of face value of Rs.10/- each by clubbing the authorised capital of Hyderabad Duty Free Retail Limited
Rs.20,00,00,000/- divided into 2,00,00,000 equity shares of face value of Rs.10/- each pursuant to the sanctioned scheme.
The present Paid-up Share Capital is Rs.126,60,89,160/- divided into 12,66,08,916 equity shares of face value of Rs.10/- each. The entire paid-up
share capital is held by GMR Hyderabad International Airport Limited along with its nominees. Accordingly, your Company is a wholly owned subsidiary of GMR
Hyderabad International Airport Limited. STATUTORY AUDITORS
M/s. S. R. Batliboi & Associates, LLP, the present Statutory Auditors of your
Company, would retire at the ensuing Annual General meeting and expressed their unwillingness for re-appointment. The Board of Directors recommends the M/s. Deloitte Haskins & Sells, LLP (Reg.No.117366W/W-100018) as the
Statutory Auditors of the Company for a term of five consecutive years i.e., to hold office from the conclusion of the ensuing Ninth Annual General Meeting of
the Company until the conclusion of the Fourteenth Annual General Meeting of the Company, to be held in the year 2022 subject to ratification at every Annual
General Meeting. The Company has received a letter from M/s. Deloitte Haskins & Sells, LLP
(Reg.No.117366W/W-100018) to the effect that their appointment, if made, would be in accordance with Section 139 of the Companies Act, 2013 and that,
they are not disqualified for such appointment within the meaning of Section 141 of the Companies Act, 2013.
Page No. 14
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ============================================================================================================== COMMENTS ON STATUTORY AUDITORS’ REPORT
The Auditors has not made any qualified opinion for the period under review. Further the Statutory Auditors have not reported any incident of fraud to the Audit Committee of the Company in the financial year under review.
EXTRACT OF THE ANNUAL RETURN
The extract of the annual return as on March 31, 2017 in the format provided under sub-section (3) of section 92 of the Companies Act, 2013 is annexed to
this Report as Annexure 1.
SECRETARIAL AUDIT The Board of Directors of the Company had appointed M/s. KBG Associates,
Practicing Company Secretaries, represented by its Partner Mr. Srikrishna S Chintalapati (Membership No. 5984 and Certificate of Practice No.6262) as
Secretarial Auditors of the Company, and their Report on Company’s Secretarial Audit is appended to this Report as Annexure 2.
There are no qualifications, reservations or adverse remarks in the secretarial audit report for financial year 2016-17.
PARTICULARS OF LOANS, GUARANTEES OR INVESTMENTS UNDER
SECTION 186 OF THE COMPANIES ACT, 2013 The Company has not made any transaction pursuant to Section 186 of the
Companies Act, 2013, during the financial year 2016-17.
PARTICULARS OF CONTRACTS OR ARRANGEMENTS WITH RELATED PARTIES REFERRED TO IN SECTION 188(1) OF THE COMPANIES ACT, 2013.
The Company has not entered into any contracts or arrangements with related
parties referred to in Section 188(1) of the Companies Act, 2013 and as such no particulars are given.
All the transactions with related parties being in the ordinary course of business and at arms’ length basis were reviewed and approved by the Audit Committee.
COMPANY’S POLICY ON DIRECTORS’ APPOINTMENT AND
REMUNERATION The Nomination and Remuneration Policy of the Company covering Directors’
appointment, remuneration, criteria for determining qualifications, positive attributes, independence of a Director and other matters provided under sub-
section (3) of section 178, is appended as Annexure 3.
Page No. 15
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ============================================================================================================== CONSERVATION OF ENERGY, TECHNOLOGY ABSORPTION & FOREIGN EXCHANGE EARNINGS & OUTGO
The particulars as required under sub-section (3)(m) of Section 134 of the Companies Act, 2013, read with the Companies (Accounts) Rules, 2014 are as
under:
A. Conservation of Energy and Technology absorption:
Installation of heat pump for hot water generation which reduces the hot
water production cost up to INR 50,000 per month. Solar hot water system optimization done by modification of pipe lines.
Saving achieved is 80 to 90 ltrs. of diesel per day. BOH (Back of the House) areas including offices, linen room, and cafeteria
lights are changed to LED.
All kitchen ceiling changed to LED for energy conservation. Hot water circulation pipe lines insulation work done in all shafts to increase
the efficiency of the hot water system. Gym and public area tube lights are changing in to low consumption LED
lights to save the power and for good ambience
Started using Bio-diesel for hot water generator and steam generation and thus reduced the carbon emission
Started using laundry condensate to produce the hot water generation using heat exchanger.
ETP (Effluent Treatment Plant) treated water is using for cooling towers and
staff flush. We are in the process of re-circulating the laundry Water Wastage for cooling
towers. Change of the rooms lighting to low consumption LED lamps is work in
progress.
B. Foreign Exchange Earning and Outgo:
Particulars relating to foreign exchange earnings and outgo have been set out
under Para 28 to 30 of Notes annexed to the audited financial statements for the period under review.
DEPOSITS
During the financial year under review, your Company has not accepted any deposits within the meaning of Section 73 of the Companies Act, 2013 and the Companies (Acceptance of Deposits) Rules, 2014.
BOARD EVALUATION
Pursuant to the provisions of the Companies Act, 2013, the Board has carried out the annual performance evaluation of its own performance, the Directors
individually as well as the evaluation of the working of its Committees.
Page No. 16
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ============================================================================================================== INTERNAL CONTROL SYSTEM
The Company’s internal control systems are commensurate with the nature of its business and the size and complexity of its operations. The Management Assurance Group (MAG), internal audit team, of the Company, carries out audits
periodically throughout the year across all functional areas and submits their reports to the Audit Committee.
RISK MANAGEMENT POLICY
The Company has established Enterprise Risk Management (ERM) framework to identify, assess, monitor and mitigate various risks that may affect the
organization. As per ERM framework, the risks are identified considering the internal and external environment. While there were no risks perceived that threatens the existence of the company, there are certain key risks identified
which are as follows:
Hyderabad Duty Free Division:
Sl.
No
Key Risks Likeli
hood
Impa
ct
Mitigation /Recovery Plan
1 Competition from deep
discounting by other Duty Free operators thereby leading to reduced
conversions
High High Understanding customers
who are buying from other
DF’s.
Improving price
competitiveness of select
SKU’s.
Enhancing availability/
awareness.
Operationalising the new store to improve look, feel
& appeal.
2 Lower growth of
International Passengers (particularly arrivals) and
traffic growth of high yield Airlines
High High In addition to the above,
tie up with Hi-Potential airlines, Telugu
associations. HDF App & improved website for pre-order.
Hotel Division
# Key Risks Likelihood Impact Estimate Impact
Mitigation /Recovery Plan
1 New Monetary
Regulations- Single transaction limit
High High Will have
significant impact on room
revenue and on
GOP of Operations
This is impacting the
social/wedding market as the clients now explore the options of
using local venues/halls with much cheaper
costs and flexibility of billing. The hotel will try and
Page No. 17
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
work with other business segments
(non-qualified) by inflating their volumes and also cater to low
rated volume (MICE) businesses; this will
mostly come at a higher costs (commissions and lower net realization)
reducing the flow through margins; the
hotel’s endeavour will be to strive and achieve the budgeted INR value
GOP.
2 GST Impact –
no Tax input credit for Social/Weddings
and FIT Travelers
High Mediu
m
Will have
an impact on room revenue
and eventually
GOP.
The increased GST will
have a further impact on the social/wedding segment and also on
the leisure FIT traveler’s movement as
they will not benefit from input tax credits. The hotel will have to
again try to work with these segments with an
effort to increase the volumes wherever
possible; mostly by reducing rates. This will potentially reduce the
flow through margins and the hotel will strive
to make higher volume of sales to achieve the budgeted INR value
GOP.
3 Increase in
energy and water tariffs by State discoms
will impact the GOP margins
High Mediu
m
Will result
in increase in operations
cost and have
significant negative impact on
GOP margins
As an ongoing process,
Hotel team strives to reduce the consumption of energy and water to
contain utility costs.
Page No. 18
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ============================================================================================================== VIGIL MECHANISM
The Company has established a vigil mechanism for Directors, regular employees and consultants of the Company, including advisors, in-house consultants and employees on contract. This Policy shall also apply to third
parties with any commercial dealings with the Company, including vendors, service providers, partners, joint venture employees and customers.
Any Whistle Blower making a complaint under this Policy may make a Disclosure to the Ombudsperson – Mr. HJ Dora, GMR Group, through the following modes.
(a) Oral Complaints through teleconference or by personally meeting the
Ombudsperson, or by calling 1800-1020-467 or such other number as is
set out on www.gmrgroup.in.
(b) Complaints filed through Electronic Means to [email protected] to
raise a concern under the Policy.
The Policy provides for maintaining confidentiality and protection to the Whistle Blower against any victimization.
PARTICULARS OF REMUNERATION
There are no such employees on the payroll of the Company whose remuneration particulars are required to be disclosed under the provisions of
Rule 5(2) of Companies (Appointment and Remuneration of Managerial Personnel) Rules, 2014.
HUMAN RESOURCES AND DEVELOPMENT
Recruitment: Your Company had 220 Personnel at the end of financial year 2016-17.
Learning and Development: Your Company provides opportunities to all its
employees to attend training programs to groom the technical and soft skills. Corporate training programs and regular training programs on telephone etiquettes, grooming, hygiene, handling of safety equipment, fire evacuation drill
are conducted on a regular basis. Specialized training programs viz. Beverages, Baking and Culinary are conducted for specifically identified candidates.
Employee Relations: The hotel has achieved 90% employee satisfaction in the year 2016-17
Town Hall Meetings: Staff Meetings over Lunch are organised with the
General Manager of the Organization and feedbacks are taken from all employees on their working conditions periodically. Information on their satisfaction levels with the services provided by the Organization are being
obtained and necessary amendments done to meet the expectations of employees.
Page No. 19
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ============================================================================================================== Staff Recognition Program: Hotel introduce new staff recognition program wherein the staff is appreciated immediately for any good work done.
CSR Activities: Hotel initiated note book donation drive to the school children and to an NGO Organization (Nireekshana)
Health Awareness Session: Health awareness session on Diabetes, Eye
Check Campaign conducted during the quarter to all staff members. DISCLOSURE UNDER THE SEXUAL HARASSMENT OF WOMEN AT
WORKPLACE (PREVENTION, PROHIBITION AND REDRESSAL) ACT, 2013
Your Company has in place an Anti-Sexual Harassment Policy in line with the requirements of the Sexual Harassment of Women at the Workplace (Prevention, Prohibition and Redressal) Act, 2013. Internal Complaints Committee (ICC) has
been set up to address complaints received regarding sexual harassment. All employees (permanent, contractual, temporary, trainees) are covered under this
Policy. During the financial year for the year ended March 31, 2017 the Company has
not received any complaint under this Act.
ACKNOWLEDGEMENT Your Directors take this opportunity to express their sincere thanks and
gratitude to various Government Agencies, Accor Group, Customer, Suppliers, Employees and GMR Hyderabad International Airport Limited, for their co-
operation and support.
For and on behalf of the Board of Directors
GMR Hospitality and Retail Limited
Date: 25.07.2017
Place: Hyderabad
SGK Kishore
Director
DIN: 02916539
Rajesh Arora
Director
DIN: 03174536
Page No. 20
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
Annexure 1 FORM NO. MGT 9
EXTRACT OF ANNUAL RETURN of
GMR Hospitality and Retail Limited
As on financial year ended on 31.03.2017 Pursuant to Section 92 (3) of the Companies Act, 2013 and rule 12(1) of the
Company (Management & Administration) Rules, 2014.
I. REGISTRATION & OTHER DETAILS:
1. CIN U52100TG2008PLC060866
2. Registration Date 08/09/2008
3. Name of the Company GMR Hospitality and Retail Limited (w.e.f. May 16, 2017)
4. Category/Sub-category of
the Company
Company Limited by Shares
5. Address of the Registered office & contact details
GMR Aero Towers Rajiv Gandhi International Airport
Shamshabad, Hyderabad 500 108 Telangana
Tel : 040 6739 4099
6. Whether listed company No
7. Name, Address & contact details of the Registrar &
Transfer Agent, if any.
Karvy Computershare Pvt. Ltd 6th Floor, Karvy Selenium Tower B,
Plot 31-32, Gachibowli Financial District, Nanakramguda, Hyderabad - 500 032
Phone: +91 040 67161717
II. PRINCIPAL BUSINESS ACTIVITIES OF THE COMPANY (All the business activities contributing 10 % or more of the total turnover of the
company shall be stated)
S. No.
Name and Description of main products / services
NIC Code of the Product/service
% to total turnover of the company
1 Retail 52100 64.35%
2 Operating Hotel 55100 35.65%
III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES
S. No
.
Name and Address of the Company
CIN/GLN
Holding /
Subsidiary / Associat
es
% of shares
held
Applicable
Section
1 GMR Hyderabad International Airport Limited
U62100TG2002PLC040118
Holding 100 2 (46)
Page No. 21
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
IV. SHARE HOLDING PATTERN (Equity Share Capital Breakup as percentage of Total Equity)
i) Category-wise Share Holding
Category of Shareholde
rs
No. of Shares held at the beginning of the year
[As on 31-March-2016]
No. of Shares held at the end of the year
[As on 31-March-2017]
% Chan
ge durin
g the year
Demat Physi
cal
Total % of
Total Share
s
Demat Physi
cal
Total % of
Total Shares
A.
Promoters
A (1)
Indian
a) Individual/
HUF
- - - - - - - - -
b) Central
Govt
- - - - - - - - -
c) State
Govt(s)
- - - - - - - - -
d) Bodies
Corp.
1,096,
589,10
6 1,096,
589,16
100 1,096,5
89,10
6 1,096,
589,16
100 -
e) Banks / FI
- - - - - - - - -
f) Any other
- - - - - - - - -
Sub Total A(1)
1,096,589,1
0
6 1,096,589,1
6
100 1,096,589,10
6 1,096,589,1
6
100 -
A (2)
Foreign
a) NRIs –
Individuals
- - - - - - - - -
b) Other –
Individuals
- - - - - - - - -
c) Bodies
Corp.
- - - - - - - - -
d) Banks /
FI
- - - - - - - - -
e) Any
Other….
- - - - - - - - -
Subtotal
(A)(2):
- - - - - - - - -
Total
shareholding of
1,096,
589,10
6 1,096,
589,16
100 1,096,
589,10
6 1,096,
589,16
100 -
Page No. 22
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
Promoter (A)
=(A)(1) + (A)(2)
B. Public Shareholding
1. Institutio
ns
a) Mutual
Funds
- - - - - - - - -
b) Banks /
FI
- - - - - - - - -
c) Central
Govt
- - - - - - - - -
d) State
Govt(s)
- - - - - - - - -
e) Venture
Capital Funds
- - - - - - - - -
f) Insurance Companies
- - - - - - - - -
g) FIIs - - - - - - - - -
h) Foreign Venture Capital
Funds
- - - - - - - - -
i) Others
(specify)
- - - - - - - - -
Sub-total
(B)(1):-
- - - - - - - - -
2. Non-
Institutions
a) Bodies Corp.
- - - - - - - - -
i) Indian - - - - - - - - -
ii) Overseas - - - - - - - - -
b) Individuals
- - - - - - - - -
i) Individual
shareholders holding nominal
share capital upto
Rs. 1 lakh
- - - - - - - - -
Page No. 23
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
ii) Individual
shareholders holding nominal
share capital in
excess of Rs 1 lakh
- - - - - - - - -
c) Others (specify)
- - - - - - - - -
Sub-total (B)(2):-
- - - - - - - - -
Total Public Sharehold
ing (B)=(B)(1
)+ (B)(2)
- - - - - - - - -
C. Shares held by
Custodian for GDRs & ADRs
- - - - - - - - -
Grand Total
(A+B+C)
1,096,589,
10
6 1,096,589,
16
100 1,096,589,1
0
6 1,096,589,
16
100 -
ii) Shareholding of Promoter
SN Shareholder’s Name
Shareholding at the beginning of the year
Shareholding at the end of the year
% change in
shareholding
during the year
No. of Shares
% of total Shares
of the compa
ny
% of Shares Pledged
/ encumb
ered to total shares
No. of Shares
% of total Shares
of the compa
ny
% of Shares Pledged
/ encumb
ered to total shares
1 GMR Hyderabad
International Airport Limited
1,096,589,1
0
100 - 1,096,589,10
100 30% 100%
2 SGK Kishore* 1 - - 1 - - -
3 Rajesh Arora* 1 - - 1 - - -
4 C. Prasanna* 1 - - 1 - - -
5 Bhimasankara Sarma K*
1 - - 1 - - -
6 Bandaru 1 - - 1 - - -
Page No. 24
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
Ramesh Babu*
7 T. Venkat
Ramana*
1 - - - - - 100
8 Anup Kumar
Samal*
- - - 1 - - 100
*Holding shares as nominee for and behalf of GMR Hyderabad International
Airport Limited
iii) Change in Promoters’ Shareholding (please specify, if there is no change):
SN
Particulars Shareholding at the beginning of the year
Cumulative Shareholding during the year
No. of shares
% of total shares of
the Co
No. of shares
% of total shares of
the Co
1 At the beginning of the year 109,658
,916
100 109,65
8,916
100
2 Date wise Increase / Decrease in
Promoters Shareholding during the year specifying the reasons for
increase / decrease (e.g. allotment /transfer / bonus/ sweat equity etc.):
- - - -
3 At the end of the year 109,658,916
100 109,658,916
100
iv) Shareholding Pattern of top ten Shareholders:
(Other than Directors, Promoters and Holders of GDRs and ADRs): NIL
S
N
For Each of the Top 10
Shareholders
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
1 At the beginning of the year - - - -
2 Date wise Increase / Decrease in Promoters Shareholding during the
year specifying the reasons for increase /decrease (e.g. allotment /
transfer / bonus/ sweat equity etc):
- - - -
3 At the end of the year ( or on the
date of separation, if separated during the year)
- - - -
v) Shareholding of Directors and Key Managerial Personnel:
SN Name of Directors and
Key
Shareholding Shareholding at the beginning
of the year
Cumulative Shareholding during
the year
Page No. 25
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
Managerial Personnel
(KMP)
No. of shares
% of total
shares of the
company
No. of shares
% of total
shares of the
company
1 SGK Kishore,
Director*
At the beginning
of the year
1 Equity
Share
- 1 Equity
Share
-
Date wise
Increase / Decrease in Promoters
Shareholding during the year
specifying the reasons for increase /decrease
(e.g. allotment / transfer / bonus/
sweat equity etc.):
- - - -
At the end of the
year
1 Equity
Share
- 1 Equity
Share
-
2 Rajesh Arora,
Director*
At the beginning of
the year
1 Equity
Share
- 1 Equity
Share
-
Date wise Increase / Decrease in
Promoters Shareholding
during the year specifying the
reasons for increase /decrease (e.g. allotment /
transfer / bonus/ sweat equity etc.):
- - - -
At the end of the year
1 Equity Share
- 1 Equity Share
-
* holding share as nominee shareholder of GMR Hyderabad International Airport Limited.
V. INDEBTEDNESS:
Indebtedness of the Company including interest outstanding/accrued but not due for payment.
(Amount in Crores)
Particulars Secured
Loans excluding deposits
Unsecured Loans
Deposits Total Indebtedness
Indebtedness at the beginning of the financial
year April 01, 2016
Page No. 26
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
i) Principal Amount 124.78 57.20 - 181.98
ii) Interest due but not paid - - -
iii) Interest accrued but not due - - -
Total (i+ii+iii) 124.78 57.20 - 181.98
Change in Indebtedness
during the financial year
* Addition - 8.8 - 8.8
* Reduction (2.08) - (2.08)
Net Change (2.08) 8.8 - 6.72
Indebtedness at the end of the financial year March 31,
2017
i) Principal Amount 122.70 66.00 - 188.7
ii) Interest due but not paid - - - -
iii) Interest accrued but not due - - - -
Total (i+ii+iii) 122.70 66.00 - 188.7
VI. REMUNERATION OF DIRECTORS AND KEY MANAGERIAL PERSONNEL
A. Remuneration to Managing Director, Whole-time Director and/or
Manager for FY 2016-17:
SN. Particulars of Remuneration Mr. Arafat Ahmed
Sheriff-Manager 01.04.2016-30.06.2016
Mr. Arunangshu
Ghosh- Manager 22.07.2016-31.03.2017
1 Gross salary 6,98,322 13,68,224
(a) Salary as per provisions contained in section 17(1) of the
Income-tax Act, 1961
- -
(b) Value of perquisites u/s 17(2)
Income-tax Act, 1961
- -
(c) Profits in lieu of salary under
section 17(3) Income- tax Act, 1961
- -
2 Stock Option - -
3 Sweat Equity - -
4 Commission - as % of profit
- others, specify…
- -
5 Others, please specify
- -
Total (A)
6,98,322 13,68,224
Ceiling as per the Act
60,00,000
B. Remuneration to other Directors: NIL for the FY 2016-17
SN.
Particulars of Remuneration
Name of Directors Total Amount
1 Independent Directors
Mr. P. Vijay Bhaskar
Dr. Kavitha
Gudapati
Mrs. Siva Kameswari
Vissa
Mr. Mohamm
ed Ismail
-
Fee for 1,30,000 65,000 65,000 30,000 2,90,000
Page No. 27
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
attending board / Committee
meetings
Commission - - - -
Others, please specify
- - - -
Total (1) 1,30,000 65,000 65,000 30,000 2,90,000
2 Other Non-
Executive Directors
- - - -
Fee for attending board
committee meetings
- - - -
Commission - - - -
Others, please specify
- - - -
Total (2) - - - -
Total (B)=(1+2)
1,30,000 65,000 65,000 30,000 2,90,000
Total Managerial
Remuneration
- - - -
Overall Ceiling
as per the Act
Maximum of
Rs.1,00,000/- sitting fee per meeting per
director
C. REMUNERATION TO KEY MANAGERIAL PERSONNEL OTHER THAN MD / MANAGER / WTD for the FY 2016-17
SN Particulars of Remuneration Mr. Pankaj Kumar Mishra - Company
Secretary 01.04.2016-27.08.2016
Mrs. C. Bharathi- Company Secretary 25.10.2016-31.03.2017
Amount in Rs.
1 Gross salary 3,56,902 3,59,264
(a) Salary as per provisions contained in section 17(1) of the
Income-tax Act, 1961
- -
(b) Value of perquisites u/s 17(2)
Income-tax Act, 1961
- -
(c) Profits in lieu of salary under
section 17(3) Income-tax Act, 1961
- -
2 Stock Option - -
3 Sweat Equity - -
4 Commission - -
- as % of profit - -
- others, specify - -
Page No. 28
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
5 Others, please specify -
Total 3,56,902 3,59,264
VII. PENALTIES / PUNISHMENT/ COMPOUNDING OF OFFENCES: NO
Type Section of
the Companies
Act
Brief
Description
Details of
Penalty / Punishment/
Compounding fees imposed
Authority
[RD / NCLT/
COURT]
Appeal
made, if any
(give Details)
A. COMPANY
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
B. DIRECTORS
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
C. OTHER OFFICERS IN DEFAULT
Penalty - - - - -
Punishment - - - - -
Compounding - - - - -
Page No. 29
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
Annexure 2 Form No. MR-3
Secretarial Audit Report [Pursuant to Section 204(1) of the Companies Act, 2013 and Rule No. 9 of the Companies (Appointment and Remuneration of Managerial Personnel) Rules,
2014]
To, The Members GMR Hospitality and Retail Limited
(Formerly known as GMR Hotels and Resorts Limited) GMR Aero Towers,
Rajiv Gandhi International Airport, Shamshabad, Hyderabad, Telangana -500108
We have conducted the secretarial audit of the compliance of applicable
statutory provisions and the adherence to good corporate practices by GMR HOSPITALITY AND RETAIL LIMITED (Formerly known as GMR Hotels and Resorts Limited) (hereinafter called the Company). Secretarial Audit was
conducted in a manner that provided us a reasonable basis for evaluating the corporate conducts/statutory compliances and expressing our opinion thereon.
Based on our verification of the books, papers, minute books, forms and returns filed and other records maintained by the Company and also the information
provided by its officers, agents and authorized representatives during the conduct of Secretarial Audit; we hereby report that in our opinion, the Company
has, during the audit period covering the financial year ended on March 31, 2017, complied with the statutory provisions listed hereunder and also that the
Company has proper Board processes and compliance mechanism in place to the extent, in the manner and subject to the reporting made hereinafter :
We have examined the books, papers, minute books, forms and returns filed and other records maintained by the Company for the financial year ended on March
31, 2017 according to the provisions of:
Sl Particulars
1. The Companies Act, 2013 (the Act) and the Rules made thereunder;
2. Foreign Exchange Management Act, 1999 and the Rules and Regulations made thereunder to the extent of Foreign Direct Investment, Overseas Direct Investment and External Commercial Borrowings;
3. The Depositories Act, 1996 and the Regulations and Bye-laws framed thereunder;
4. We have also examined compliance with the applicable clauses of the following:
Secretarial Standards issued by The Institute of Company Secretaries of India.
Sl # Particulars
1. Under the Companies Act, 2013
A. That based on our examination and verification of the records produced to us and according to the information and explanations given to us by the
Page No. 30
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
Company that the Company has, in our opinion, complied with the provisions of the Companies Act. 2013 (“the Act”) and the rules made
under the Act and Memorandum, and Articles of Association of the Company, inter alia with regard to :
a. Maintenance of various statutory registers and documents and making necessary entries therein;
b. Closure of Register of Members / Debenture holders;
c. Forms, returns, documents and resolutions required to be filed with
the Register of Companies and the Central Government;
d. Service of documents by the company on its members and Registrar
of Companies.
e. Notices, Agenda and Minutes of proceedings of General Meetings and
of the Board and its Committee meetings including Circular Resolution;
f. The meetings of Board of Directors held on 23-04-2016, 22-07-2016, 11-08-2016, 25-10-2016 and 18-01-2017. Audit Committees of Directors held on 23-04-2016, 22-07-2016, 11-08-2016, 25-10-2016
and 18-01-2017. Nomination & remuneration Committee held on 23-04-2016, 22-07-2016 and 25-10-2016.
g. The Annual General Meeting held on 28-09-2016;
h. Approvals of the Members, the Board of Directors, the Committees of
Directors wherever required;
i. Constitution of the Board of Directors / Committee(s) of Directors,
appointment, retirement and reappointment of Directors.
j. Payment of remuneration to Directors
k. Appointment and remuneration of Auditors;
l. Transfer and transmission of Company’s shares and issue and
dispatch of duplicate share certificates. There was one transfer and no transmission of shares during the financial year
m i. Declaration and distribution of dividends (Due to accumulated losses, the Company has not declared any dividend)
n. Transfer of Unpaid and Unclaimed dividend to the Investor Education and Protection Fund. (Not applicable as the Company does not have
any unpaid and unclaimed dividend).
o. Borrowings and registration, modification and satisfaction of charges
wherever applicable;
p. Investment of the Company’s funds including investments and loans
to others;
q. Form of balance sheet as prescribed under Part I, form of statement
of profit and loss as prescribed under Part II and General Instructions for preparation of the same as prescribed in Schedule III to the Act;
r. Directors’ Report;
s. Contracts, common seal, registered office and publication of name of
the Company; and
B. Under the Companies Act, 2013, we further report that
i. The Board of Directors of the Company is duly constituted with proper balance of Executive Directors, Non-Executive Directors and Independent Directors. The changes in the composition of the Board of Directors that
took place during the period under review were carried out in compliance with the provisions of the Act.
ii. Adequate notice is given to all directors to schedule the Board Meetings,
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GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
agenda and detailed notes on agenda were sent at least seven days in advance, and a system exists for seeking and obtaining further
information and clarifications on the agenda items before the meeting and for meaningful participation at the meeting.
iii. All decisions at Board Meetings and Committee Meetings are carried out on requisite majority and recorded in the minutes of the meetings of the
Board of Directors or Committee of the Board, as the case may be.
iv. There was no prosecution initiated and no fines or penalties were
imposed during the year under review under the Act, SCRA, Depositories Act, and Rules, Regulations and Guidelines framed under these Acts against / on the Company, its Directors and Officers.
v. The Directors (including Independent Directors) have complied with the disclosure requirements in respect of their eligibility of appointment,
initial and annual disclosures / declarations.
2. Under FEMA, 1999, we report that
The Company has complied with the provisions of the FEMA, 1999 and the Rules and Regulations made under that Act to the extent applicable.
3. Under other Applicable laws, we report that
Based on the Quarterly Compliance Certificate issued by Manager of the
Company (and submitted to the Board of Directors at the Board Meetings held during the financial year 2016-2017 (for all 4 quarters), we are of
opinion there has been due compliance of all the Laws to the extent applicable.
4. We further report that there are adequate systems and processes in the company commensurate with the size and operations of the Company to monitor and ensure compliance with applicable laws, rules, regulations
and guidelines.
5. We further report that during the audit period there are no specific
events/actions having a major bearing on the company’s affairs in pursuance of the above referred laws, rules, regulations, guidelines,
standards taken place.
6. We further report that the Company being an Unlisted Company, the
Regulations and Guidelines prescribed under the Securities and Exchange Board of India Act, 1992 (‘SEBI Act’) are not applicable to the Company.
For KBG Associates Company Secretaries
(Srikrishna S Chintalapati)
Place: Hyderabad Partner Date: 12th July, 2017 CP # 6262
Note: This report is to be read with our letter of even date which is annexed as “ANNEXURE-A” and Forms an integral part of this report.
Page No. 32
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
‘ANNEXURE-A’
To,
The Members GMR Hospitality and Retail Limited (Formerly known as GMR Hotels and Resorts Limited)
GMR Aero Towers,
Rajiv Gandhi International Airport, Shamshabad, Hyderabad,
Telangana -500 108
Our report for the even date to be read with the following Letter;
Sl Particulars
1. Maintenance of secretarial record is the responsibility of the management of the company. Our responsibility is to express an opinion on these
secretarial records based on our audit.
2. We have followed the audit practices and processes as were appropriate to obtain reasonable assurance about the correctness of the contents of the
Secretarial records. The verification was done on test basis to ensure that correct facts are reflected in secretarial records. We believe that the processes and practices, we followed provide a reasonable basis for our
opinion.
3. We have not verified the correctness and appropriateness of financial
records and Books of Accounts of the company.
4. Where ever required, we have obtained the Management representation
about the compliance of laws, rules and regulations and happening of events etc.
5. The compliance of the provisions of Corporate and other applicable laws, rules, regulations, standards is the responsibility of management. Our
examination was limited to the verification of procedures on test basis.
6. The Secretarial Audit report is neither an assurance as to the future
viability of the company nor of the efficacy or effectiveness with which the management has conducted the affairs of the company.
7. Pursuant to analysis made; we have been given to understand that the scope of the audit is restricted to
a) Companies Act, 2013
b) The Depositories Act, 1996 c) Foreign Exchange Management Act, 1999
For KBG Associates
Company Secretaries
(Srikrishna S Chintalapati) Place: Hyderabad Partner
Date: 12Th July, 2017 CP # 6262
Page No. 33
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
Annexure 3 Nomination and Remuneration Policy
1. INTRODUCTION
Pursuant to Section 178 of the Companies Act, 2013, the Board of Directors of
every Public Company having a Paid up Capital of Rs. 10 Crores or more or Turnover of Rs. 100 Crores or more or having in aggregate outstanding loans or
borrowing or debentures or deposits exceeding Rs. 50 Crores or more, as existing on the date of last audited Financial Statements, shall constitute a Nomination and Remuneration Committee. In order to align with the provisions
of the Companies Act, 2013, the Board on May 05, 2014 renamed the “Remuneration Committee” as “Nomination and Remuneration Committee” and
modified its terms of reference. This Committee and the Policy is formulated in compliance with Section 178 of
the Companies Act, 2013 read along with the applicable rules thereto.
1.1. Purpose of the Policy
The Key Objectives of the Committee are:
(a) To guide the Board in relation to appointment and removal of Directors, Key Managerial Personnel and Senior Management.
(b) To evaluate the performance of the members of the Board and provide necessary report to the Board for further evaluation.
(c) To recommend to the Board a policy relating to Remuneration payable to
the Directors, Key Managerial Personnel and Senior Management. The Policy ensures that:
(a) The level and composition of remuneration is reasonable and sufficient to
attract, retain and motivate Directors of the quality required to run the Company successfully;
(b) Relationship of remuneration to performance is clear and meets appropriate performance benchmark; and
(c) Remuneration to Directors, Key Managerial Personnel and Senior
Management involves a balance between fixed and incentive pay reflecting
short and long term performance objectives appropriate to the working of the Company and its goals.
1.2. Definitions
1.2.1. “Board” means the Board of Directors of the Company.
1.2.2. “Company” means “GMR Hospitality and Retail Limited.”
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GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ============================================================================================================== 1.2.3. “Employees’ Stock Option” means the option given to the directors,
officers or employees of a company or of its holding company or
subsidiary company or companies, if any, which gives such directors, officers or employees, the benefit or right to purchase, or to subscribe for, the shares of the company at a future date at a pre-determined price.
1.2.4. “Independent Director” means a director referred to in Section 149 (6)
of the Companies Act, 2013.
1.2.5. “Key Managerial Personnel” or “KMP” means Key Managerial
Personnel of the Company in terms of the Companies Act, 2013 and the Rules made thereunder. (As per Section 203 of the Companies Act, 2013, the following are whole-time Key Managerial Personnel: (i) Managing Director or Chief Executive Officer or the Manager and in
their absence a whole-time Director; (ii) Company Secretary; and
(iii) Chief Financial Officer.)
1.2.6. “Nomination and Remuneration Committee” shall mean a Committee
of Board of Directors of the Company, constituted in accordance with the provisions of Section 178 of the Companies Act, 2013.
1.2.7. “Policy or This Policy” means, “Nomination and Remuneration Policy.”
1.2.8. “Remuneration” means any money or its equivalent given or passed to any person for services rendered by him and includes perquisites as
defined under the Income-tax Act, 1961.
1.2.9. “Senior Management” means personnel of the Company who are members of its core management team excluding Board of Directors. This would include all members of management one level below the executive
directors, including all the functional heads.
1.3. Interpretation
Words and expressions used in this Policy shall have the same meanings assigned to them in the Companies Act, 2013 or the rules framed thereon.
2. NOMINATION AND REMUNERATION COMMITTEE
2.1. Role of the Committee
(a) Identifying persons who are qualified to become directors and who may be appointed in senior management in accordance with the criteria laid down,
recommend to the Board their appointment and removal and shall carry out evaluation of every director’s performance.
(b) Formulating the criteria for determining qualifications, positive attributes and independence of a director and recommend to the Board a policy,
Page No. 35
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
relating to the remuneration for the directors, key managerial personnel and other employees.
(c) Formulating the criteria for evaluation of individual Directors and the
Board;
(d) Ensuring that the Board comprises of a balanced combination of Executive
Directors and Non-Executive Directors;
(e) All information about the Directors / Managing Directors / Whole time
Directors / Key Managerial Personnel i.e., background details, past remuneration, recognition or awards, job profile shall be considered and
disclosed to shareholders, where required;
(f) The Committee shall take into consideration and ensure the compliance of
provisions under Schedule V of the Companies Act, 2013 for appointing and fixing remuneration of Managing Directors / Whole-time Directors;
(g) While approving the remuneration, the Committee shall take into account
financial position of the Company, trend in the industry, qualification,
experience and past performance of the appointee;
(h) The Committee shall be in a position to bring about objectivity in determining the remuneration package while striking the balance between the interest of the Company and the shareholders;
2.2. Composition of the Committee
(a) The Committee shall comprise of at least three (3) Directors, all of whom shall be non-executive Directors and at least half shall be Independent.
(b) The Board shall reconstitute the Committee as and when required to comply with the provisions of the Companies Act, 2013 and applicable
statutory requirement.
(c) Minimum two (2) members shall constitute a quorum for the Committee
Meeting.
(d) Membership of the Committee shall be disclosed in the Annual Report.
(e) Term of the Committee shall be continued unless terminated by the Board
of Directors.
2.3. Frequency of the Meetings of the Committee
The meeting of the Committee shall be held at such regular intervals as may be required.
Page No. 36
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ============================================================================================================== 2.4. Committee Member’s Interest
(a) A member of the Committee is not entitled to be present when his or her
own remuneration is discussed at a meeting or when his or her
performance is being evaluated.
(b) The Committee may invite such executives, as it considers appropriate, to be present at the meetings of the Committee.
2.5. Voting at the Meeting
(a) Matters arising for determination at Committee meetings shall be decided
by a majority of votes of Members present and voting and any such decision shall for all purposes be deemed a decision of the Committee.
(b) In the case of equality of votes, the Chairman of the meeting will have a casting vote.
2.6. Minutes of the Meeting
Proceedings of all meetings must be minuted and signed by the Chairman of the
said meeting or the Chairman of the next succeeding meeting. Minutes of the Committee meeting will be tabled at the subsequent Board and Committee
meeting. 3. APPLICABILITY
This Policy is Applicable to:
(a) Directors (Executive, Non-Executive and Independent) (b) Key Managerial Personnel (c) Senior Management Personnel
(d) Other employees as may be decided by the Nomination and Remuneration Committee
4. APPOINTMENT AND REMOVAL OF DIRECTOR, KMP AND SENIOR
MANAGEMENT PERSONNEL
4.1. Appointment criteria and qualifications
(a) Subject to the applicable provisions of the Companies Act, 2013, other
applicable laws, if any and GMR Group HR Policy, the Committee shall
identify and ascertain the integrity, qualification, expertise and experience of the person for appointment as Director, KMP or at Senior Management
level and recommend to the Board his / her appointment.
(b) The Committee has discretion to decide the adequacy of qualification,
expertise and experience for the concerned position.
(c) The Company shall not appoint or continue the employment of any person as Managing Director / Whole-time Director / Manager who has attained
Page No. 37
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
the age of seventy years. Provided that the term of the person holding this position may be extended beyond the age of seventy years with the
approval of shareholders by passing a special resolution based on the explanatory statement annexed to the notice for such motion indicating the justification for extension of appointment beyond seventy years.
4.2. Term / Tenure
4.2.1. Managing Director / Whole-time Director / Manager (Managerial Personnel)
The Company shall appoint or re-appoint any person as its Managerial
Personnel for a term not exceeding five years at a time. No re-appointment shall be made earlier than one year before the expiry of term.
4.2.2. Independent Director
(a) An Independent Director shall hold office for a term up to five consecutive
years on the Board of the Company and will be eligible for re appointment
on passing of a special resolution by the Company and disclosure of such appointment in the Board's report.
(b) No Independent Director shall hold office for more than two consecutive
terms, but such Independent Director shall be eligible for appointment
after expiry of three years of ceasing to become an Independent Director.
Provided that an Independent Director shall not, during the said period of three years, be appointed in or be associated with the Company in any
other capacity, either directly or indirectly.
(c) At the time of appointment of Independent Director it should be ensured
that number of Boards on which such Independent Director serves is restricted to seven listed companies as an Independent Director and three
listed companies as an Independent Director in case such person is serving as a Whole-time Director of a listed company.
(d) The maximum number of companies in which a person shall hold office as Director, including any alternate directorship, shall not exceed twenty.
Provided that the maximum number of public companies in which a person can be appointed as a director shall not exceed ten.
For reckoning the limit of public companies in which a person can be appointed as director, directorship in private companies that are either
holding or subsidiary company of a public company shall be included. 4.3. Familiarization Programme for Independent Directors
The company shall familiarize the Independent Directors with the company, their roles, rights, responsibilities in the company, nature of the industry in which the
company operates, business model of the company, etc., through various programmes.
Page No. 38
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ============================================================================================================== 4.4. Evaluation
Subject to Schedule IV of the Companies Act, 2013 the Committee shall carry out the evaluation of Directors at such intervals as may be considered
necessary. 4.5. Removal
Due to reasons for any disqualification mentioned in the Companies Act, 2013, rules made thereunder or under any other applicable laws, rules and regulations, the Committee may recommend, to the Board with reasons recorded in writing,
removal of a Director, KMP, subject to the provisions and compliance of the applicable laws, rules and regulations.
4.6. Retirement
The Director, KMP and Personnel of Senior Management shall retire as per the
applicable provisions of the Companies Act, 2013 and the prevailing policy of the Company. The Board will have the discretion to retain the Director, KMP,
Personnel of Senior Management in the same position / remuneration or otherwise even after attaining the retirement age, in the interest and for the benefit of the Company.
5. PROVISIONS RELATING TO REMUNERATION OF MANAGERIAL
PERSONNEL, KMP AND SENIOR MANAGEMENT PERSONNEL
5.1. General
(a) The remuneration / compensation / commission etc. to Managerial
Personnel will be determined by the Committee and recommended to the Board for approval. The remuneration / compensation / commission etc. shall be subject to the approval of the shareholders of the Company and
Central Government, wherever required.
(b) The remuneration and commission to be paid to the Managerial Personnel shall be as per the statutory provisions of the Companies Act, 2013, and the rules made thereunder for the time being in force.
(c) Increments to the existing remuneration / compensation structure may be
recommended by the Committee to the Board which should be within the slabs approved by the Shareholders in the case of Managerial Personnel.
(d) Where any insurance is taken by a company on behalf of its Managing Director, Whole-time Director, Manager, Chief Executive Officer, Chief
Financial Officer or Company Secretary for indemnifying any of them against any liability in respect of any negligence, default, misfeasance,
breach of duty or breach of trust for which they may be guilty in relation to the company, the premium paid on such insurance shall not be treated as part of the remuneration payable to any such personnel.
Page No. 39
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ============================================================================================================== 5.2. Remuneration to Managerial Personnel, KMP, Senior Management
and Other Employees
5.2.1. Fixed Pay
Managerial Personnel shall be eligible for a monthly remuneration as may
be approved by the Board on the recommendation of the Committee in accordance with the statutory provisions of the Companies Act, 2013, and
the rules made thereunder for the time being in force. The break-up of the pay scale and quantum of perquisites including, employer’s contribution to provident fund, pension scheme, medical expenses, club fees etc. shall be
decided and approved by the Board on the recommendation of the Committee and approved by the shareholders and Central Government,
wherever required.
5.2.2. Minimum Remuneration
If, in any financial year, the Company has no profits or its profits are
inadequate, the Company shall pay remuneration to its Managerial Personnel in accordance with the provisions of Schedule V of the Companies Act, 2013 and if it is not able to comply with such provisions,
with the prior approval of the Central Government.
5.2.3. Provisions for excess remuneration If any Managerial Personnel draws or receives, directly or indirectly by
way of remuneration any such sums in excess of the limits prescribed under the Companies Act, 2013 or without the prior sanction of the
Central Government, where required, he / she shall refund such sums to the Company and until such sum is refunded, hold it in trust for the Company. The Company shall not waive recovery of such sum refundable
to it unless permitted by the Central Government.
5.2.4. The remuneration to Personnel of Senior Management shall be governed by the GMR Group HR Policy.
5.2.5. The remuneration to other employees shall be governed by the GMR Group HR Policy.
5.3. Remuneration to Non-Executive / Independent Director
5.3.1. Remuneration / Commission
The remuneration / commission shall be in accordance with the statutory
provisions of the Companies Act, 2013, and the rules made thereunder for the time being in force.
5.3.2. Sitting Fees
The Non- Executive / Independent Director may receive remuneration by way of fees for attending meetings of Board or Committee thereof.
Page No. 40
GMR Hospitality and Retail Limited
(Formerly Known as GMR Hotels and Resorts Limited) Regd. Off: GMR Aero Towers, Rajiv Gandhi International Airport, Shamshabad, Hyderabad - 500 108, Telangana
CIN: U52100TG2008PLC060866 ==============================================================================================================
Provided that the amount of such fees shall not exceed the maximum
amount as provided in the Companies Act, 2013, per meeting of the Board or Committee or such amount as may be prescribed by the Central Government from time to time.
The sitting fee paid to Independent Directors and Women Directors, shall
not be less than the sitting fee payable to other directors
5.3.3. Limit of Remuneration / Commission
Remuneration / Commission may be paid within the monetary limit
approved by shareholders, subject to the limit not exceeding 1% of the net profits of the Company computed as per the applicable provisions of the Companies Act, 2013.
5.3.4. Stock Options
An Independent Director shall not be entitled to any stock option of the Company.
6. DISCLOSURES
The Company shall disclose the Policy on Nomination and Remuneration in the Annual Report as per the requirements of the Companies Act 2013.
7. AMENDMENT
Any amendment or modification in applicable laws relating to Nomination and
Remuneration Committee shall automatically be applicable to the Company.
Page No. 41
INDEPENDENT AUDITOR’S REPORT To the Members of GMR Hotels and Resorts Limited Report on the Ind AS financial statements
We have audited the accompanying Ind AS financial statements of GMR Hotels and Resorts Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2017, the Statement of Profit and Loss, including the Statement of Other Comprehensive Income, the Cash Flow Statement and the Statement of Changes in Equity for the year then ended, and a summary of significant accounting policies and other explanatory information. Management’s Responsibility for the Ind AS financial statements The Company’s Board of Directors is responsible for the matters stated in Section 134(5) of the Companies Act, 2013 (“the Act”) with respect to the preparation of these Ind AS financial statements that give a true and fair view of the financial position, financial performance including other comprehensive income, cash flows and changes in equity of the Company in accordance with accounting principles generally accepted in India, including the Indian Accounting Standards (Ind AS) specified under section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015, as amended and the Companies (Accounting Standards) Amendment Rules, 2016. This responsibility includes maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding of the assets of the Company and for preventing and detecting frauds and other irregularities; selection and application of appropriate accounting policies; making judgments and estimates that are reasonable and prudent; and the design, implementation and maintenance of adequate internal financial control that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the Ind AS financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error. Auditor’s Responsibility Our responsibility is to express an opinion on these Ind AS financial statements based on our audit. We have taken into account the provisions of the Act, the accounting and auditing standards and matters which are required to be included in the audit report under the provisions of the Act and the Rules made thereunder. We conducted our audit in accordance with the Standards on Auditing issued by the Institute of Chartered Accountants of India, as specified under Section 143(10) of the Act. Those Standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the Ind AS financial statements are free from material misstatement. An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the Ind AS financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the Ind AS financial statements that give a true and fair view in order to design audit procedures
Page No. 42
that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of the accounting estimates made by the Company’s Directors, as well as evaluating the overall presentation of the Ind AS financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Ind AS financial statements. Opinion In our opinion and to the best of our information and according to the explanations given to us, the aforesaid Ind AS financial statements give the information required by the Act in the manner so required and give a true and fair view in conformity with the accounting principles generally accepted in India, of the state of affairs of the Company as at March 31, 2017, its loss including other comprehensive income, its cash flows and the changes in equity for the year ended on that date. Emphasis of Matter We draw attention to note 1.1 to the financial statements. In accordance with the order of the National Company Law Tribunal, Hyderabad Bench, the excess of net assets taken over of Hyderabad Duty Free Retail Limited (the ‘Transferor Company’) over the purchase consideration, is recognized as capital reserve amounting to Rs. 54,809,732 which is different from the requirements of IND AS 103 – ‘Accounting for Business Combination’, specified under section 133 of the Act, read with rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Accounting Standards) Amendment Rules, 2016. Had the Company accounted for the same as per the requirements of the aforesaid accounting standard, the capital reserve of Rs. 54,809,732 recognised by the Company would have been adjusted against the retained earnings. Our opinion is not qualified in respect of this matter. Report on Other Legal and Regulatory Requirements 1. As required by the Companies (Auditor’s report) Order, 2016 (“the Order”) issued by the
Central Government of India in terms of sub-section (11) of section 143 of the Act, we give in the Annexure 1 a statement on the matters specified in paragraphs 3 and 4 of the Order.
2. As required by section 143 (3) of the Act, we report that: (a) We have sought and obtained all the information and explanations which to the best of
our knowledge and belief were necessary for the purpose of our audit; (b) In our opinion, proper books of account as required by law have been kept by the
Company so far as it appears from our examination of those books; (c) The Balance Sheet, Statement of Profit and Loss including the Statement of Other
Comprehensive Income, the Cash Flow Statement and Statement of Changes in Equity dealt with by this Report are in agreement with the books of account;
Page No. 43
(d) In our opinion, the aforesaid Ind AS financial statements comply with the Accounting Standards specified under section 133 of the Act, read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the Companies (Accounting Standards) Amendment Rules, 2016;
(e) On the basis of written representations received from the directors as on March 31, 2017, and taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2017, from being appointed as a director in terms of section 164 (2) of the Act;
(f) With respect to the adequacy of the internal financial controls over financial reporting of
the Company and the operating effectiveness of such controls, refer to our separate Report in “Annexure 2” to this report;
(g) With respect to the other matters to be included in the Auditor’s Report in accordance
with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our information and according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its financial
position in its Ind AS financial statements – Refer Note 41 to the Ind AS financial statements;
ii. The Company did not have any long-term contracts including derivative contracts for which there were any material foreseeable losses;
iii. There were no amounts which were required to be transferred to the Investor
Education and Protection Fund by the Company; and
iv. The Company has provided requisite disclosures in Note 42 to the financial statements as to holdings as well as dealings in Specified Bank Notes during the period from November 8, 2016 to December 30, 2016. Based on our audit procedures and relying on the management representation regarding the holding and nature of cash transactions, including Specified Bank Notes, we report that these disclosures are in accordance with the books of accounts maintained by the Company and as produced to us by the Management.
For S.R. BATLIBOI & ASSOCIATES LLP Chartered Accountants ICAI Firm Registration Number: 101049W/E300004 ______________________________ per Shankar Srinivasan Partner Membership Number: 213271 Place of Signature: Hyderabad Date: May 02, 2017
Page No. 44
Annexure 1 referred to in our report of even date
Re: GMR Hotels and Resorts Limited (“the Company”) i) (a) The Company has maintained proper records showing full particulars, including
quantitative details and situation of property, plant and equipment.
(b) All property, plant and equipment were physically verified by the management in the financial year 2014-15 in accordance with a planned programme of verifying them once in three years which, in our opinion, is reasonable having regard to the size of the Company and the nature of its assets. No material discrepancies were noticed on such verification.
(c) According to the information and explanations given by the management, the title deeds of immovable properties included in property, plant and equipment are held in the name of the Company.
(ii) The management has conducted physical verification of inventory at reasonable
intervals during the year and no material discrepancies were noticed on such physical verification.
(iii) According to the information and explanations given to us, the Company has not
granted any loans, secured or unsecured to companies, firms, limited liability partnerships or other parties covered in the register maintained under section 189 of the Companies Act, 2013. Accordingly, the provisions of clause 3(iii) (a), (b) and (c) of the Order are not applicable to the Company and hence not commented upon.
(iv) In our opinion and according to the information and explanations given to us, there
are no loans, investments, guarantees, and securities granted in respect of which provisions of section 185 and 186 of the Companies Act, 2013 are applicable and hence not commented upon.
(v) The Company has not accepted any deposits within the meaning of Sections 73 to 76
of the Act and the Companies (Acceptance of Deposits) Rules, 2014 (as amended). Accordingly, the provisions of clause 3(v) of the Order are not applicable.
(vi) To the best of our knowledge and as explained, the Central Government has not
specified the maintenance of cost records under Section 148(1) of the Companies Act, 2013, for the products/services of the Company.
(vii) (a) The Company is regular in depositing with appropriate authorities undisputed statutory dues including provident fund, employees’ state insurance, income-tax, sales-tax, service tax, duty of custom, duty of excise, value added tax, cess and other statutory dues applicable to it.
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(b) According to the information and explanations given to us, undisputed dues in
respect of provident fund, employees’ state insurance, income-tax, service tax, sales-tax, duty of custom, duty of excise, value added tax, cess and other statutory dues which were outstanding, at the year end, for a period of more than six months from the date they became payable, are as follows:
Name of the Statute
Nature of the Dues
Amount (Rs.)
Period to which the
amount relates
Due Date
Date of Payment
Employees Provident Fund
and Miscellaneous
Provisions Act, 1952
Provident fund
* 708,384 FY 2010 - 11 to FY 2015 -
16
Various dates
unpaid
*This amount excludes interest and penalty.
(c) According to the records of the Company, the dues outstanding of income-tax, sales-
tax, service tax, duty of customs, duty of excise, value added tax and cess on account
of any dispute, are as follows:
Name of the statute
Nature of dues
Amount in Rs.
Period to which the amount relates
Forum where the dispute is pending
APVAT Act, 2005
Value Added Tax
3,556,853 FY 2010-11, FY 2011-12, FY 2012-13
and FY 2013-14
Commercial Taxes Department, AP
Income Tax Act, 1961
Income tax # 16,827,414 AY 2012-13, AY 2013-14 and AY
2014-15
Commissioner of Income Tax Appeals,
Hyderabad
# The disallowance of the amount does not have any tax impact. The assessing
officer has reduced the loss of the respective assessment years based on the income
tax returns filed by the Company.
(viii) In our opinion and according to the information and explanations given by the
management, the Company has not defaulted in repayment of loans or borrowing to a financial institution, bank or government or dues to debenture holders.
(ix) In our opinion and according to the information and explanations given by the
management, the Company has utilized the monies raised by way of term loans for the purposes for which they were raised.
(x) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Ind AS financial statements and according to the information
Page No. 46
and explanations given by the management, we report that no fraud by the Company or no fraud on the Company by the officers and employees of the Company has been noticed or reported during the year.
(xi) Based upon the audit procedures performed for the purpose of reporting the true and fair view of the Ind AS financial statements and according to the information and explanations given by the management, we report that the managerial remuneration has been paid and provided in accordance with the requisite approvals mandated by the provisions of section 197 read with Schedule V to the Companies Act, 2013.
(xii) In our opinion, the Company is not a Nidhi Company. Therefore, the provisions of
clause 3(xii) of the Order are not applicable to the Company and hence not commented upon.
(xiii) According to the information and explanations given by the management, transactions with the related parties are in compliance with section 177 and 188 of Companies Act, 2013 where applicable and the details have been disclosed in the notes to the Ind AS financial statements, as required by the applicable accounting standards.
(xiv) According to the information and explanations given to us and on an overall examination of the balance sheet, the Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under review and hence, reporting requirements under clause 3(xiv) are not applicable to the Company and, not commented upon.
(xv) According to the information and explanations given by the management, the
Company has not entered into any non-cash transactions with directors or persons connected with him as referred to in section 192 of Companies Act, 2013.
(xvi) According to the information and explanations given to us, the provisions of section
45-IA of the Reserve Bank of India Act, 1934 are not applicable to the Company. For S.R. BATLIBOI & ASSOCIATES LLP ICAI Firm registration number: 101049W/E300004
Chartered Accountants per Shankar Srinivasan Partner Membership No: 213271 Place: Hyderabad Date: May 02, 2017
Page No. 47
Annexure 2 to the Independent Auditor’s Report of even date on the Ind AS financial
statements of GMR Hotels and Resorts Limited
Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Companies Act, 2013 (“the Act”)
To the Members of GMR Hotels and Resorts Limited We have audited the internal financial controls over financial reporting of GMR Hotels and Resorts Limited (“the Company”) as of March 31, 2017 in conjunction with our audit of the Ind AS financial statements of the Company for the year ended on that date. Management’s Responsibility for Internal Financial Controls
The Company’s Management is responsible for establishing and maintaining internal financial controls based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. These responsibilities include the design, implementation and maintenance of adequate internal financial controls that were operating effectively for ensuring the orderly and efficient conduct of its business, including adherence to the Company’s policies, the safeguarding of its assets, the prevention and detection of frauds and errors, the accuracy and completeness of the accounting records, and the timely preparation of reliable financial information, as required under the Companies Act, 2013. Auditor’s Responsibility Our responsibility is to express an opinion on the Company's internal financial controls over financial reporting based on our audit. We conducted our audit in accordance with the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting (the “Guidance Note”) and the Standards on Auditing as specified under section 143(10) of the Companies Act, 2013, to the extent applicable to an audit of internal financial controls, both applicable to an audit of Internal Financial Controls and, both issued by the Institute of Chartered Accountants of India. Those Standards and the Guidance Note require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether adequate internal financial controls over financial reporting was established and maintained and if such controls operated effectively in all material respects. Our audit involves performing procedures to obtain audit evidence about the adequacy of the internal financial controls system over financial reporting and their operating effectiveness. Our audit of internal financial controls over financial reporting included obtaining an understanding of internal financial controls over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the Ind AS financial statements, whether due to fraud or error.
Page No. 48
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the internal financial controls system over financial reporting. Meaning of Internal Financial Controls Over Financial Reporting A Company's internal financial control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of Ind AS financial statements for external purposes in accordance with generally accepted accounting principles. A Company's internal financial control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of Ind AS financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorisations of management and directors of the Company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorised acquisition, use, or disposition of the Company's assets that could have a material effect on the Ind AS financial statements. Inherent Limitations of Internal Financial Controls Over Financial Reporting
Because of the inherent limitations of internal financial controls over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may occur and not be detected. Also, projections of any evaluation of the internal financial controls over financial reporting to future periods are subject to the risk that the internal financial control over financial reporting may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Opinion
In our opinion, the Company has, in all material respects, an adequate internal financial controls system over financial reporting and such internal financial controls over financial reporting were operating effectively as at March 31, 2017, based on the internal control over financial reporting criteria established by the Company considering the essential components of internal control stated in the Guidance Note on Audit of Internal Financial Controls Over Financial Reporting issued by the Institute of Chartered Accountants of India. For S.R. BATLIBOI & ASSOCIATES LLP
Chartered Accountants ICAI Firm Registration Number: 101049W/E300004 ______________________________ per Shankar Srinivasan Partner Membership Number: 213271 Place of Signature: Hyderabad Date: May 02, 2017
Page No. 49
GMR Hotels and Resorts LimitedCIN : U52100TG2008PLC060866Balance Sheet as at March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
Notes March 31, 2017 March 31, 2016(Also refer note 1.1)
April 01, 2015(Also refer note 1.1)
ASSETSNon-current assetsProperty, plant and equipment 3 1,414,044,308 1,471,178,682 1,627,342,767Capital work-in-progress 3 5,241,017 11,573,077 2,388,267Intangible assets 4 5,701,564 790,886 -Financial Assets Others 5C 1,284,871 299,871 249,871Non-current tax assets 14A 43,404,665 29,959,551 37,466,503Other non current assets 9A 15,815,649 12,849,530 111,936Deferred tax assets (net) 6 - - -
1,485,492,074 1,526,651,597 1,667,559,344
Current assetsInventories 7 175,923,794 7,107,077 7,654,373Financial assets
Investments 5A 45,413,412 - - Trade receivables 5B 27,817,818 40,489,031 34,623,992 Cash and cash equivalents 8A 166,436,212 2,892,195 5,169,437 Other bank balances 8B 7,481,440 - - Others 5D 16,842,410 - 685,571Current tax assets 14B - 33,927 3,808,709Other current assets 9B 15,817,405 11,412,643 9,397,736
455,732,491 61,934,873 61,339,818
Total Assets 1,941,224,565 1,588,586,470 1,728,899,162
EQUITY AND LIABILITIESShareholders' FundsEquity share capital 10 1,096,589,160 1,096,589,160 1,096,589,160
Share capital suspense 10A 169,500,000 - -
Other equity
Retained earnings (1,573,140,662) (1,471,639,304) (1,278,188,301)
Other reserves 11 138,240,959 43,538,650 43,569,899Total Equity (168,810,543) (331,511,494) (138,029,242)
Non-current liabilities
Financial liabilities
Borrowings 12A 1,868,179,328 1,725,391,276 1,697,749,106
Others 12D 1,362,000 1,362,000 900,000
Net employee defined benefit liabilities 13A 3,528,472 3,214,455 2,481,740
Deferred tax liabilities (net) 6 - - -
1,873,069,800 1,729,967,731 1,701,130,846
Current liabilitiesFinancial liabilities Borrowings 12B - 42,400,000 49,600,000 Trade payables 12C 190,797,688 39,336,297 35,022,530 Other current financial liabilities 12E 24,667,734 95,409,478 70,908,154Liabilities for Current Tax (Net) - - -Net employee defined benefit liabilities 13B 4,542,616 3,779,698 2,577,727
Other current liabilities 15 16,957,270 9,204,760 7,689,147
236,965,308 190,130,233 165,797,558
Total Equity and Liabilities 1,941,224,565 1,588,586,470 1,728,899,162Summary of significant accounting policies 2.1The accompanying notes are an integral part of the financial statements.
For and on behalf of the Board of Directors ofAs per our report of even date GMR Hotels and Resorts Limited
For S.R.BATLIBOI & ASSOCIATES LLP SGK Kishore Rajesh Kumar AroraICAI Firm registration number: 101049W/ E300004 Director DirectorChartered Accountants DIN: 02916539 DIN: 03174536
per Shankar Srinivasan Himansu Sekhar Samal C.BharathiPartner Chief Financial Officer Company SecretaryMembership No.: 213271 Membership No. :ACS 30329Place: Hyderabad Place: HyderabadDate: May 02, 2017 Date: May 02, 2017
Page No. 50
GMR Hotels and Resorts LimitedCIN : U52100TG2008PLC060866Statement of profit and loss for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
Notes For the year endedMarch 31, 2017
For the year endedMarch 31, 2016
(Also refer note 1.1)IncomeRevenue from operations 16 1,674,656,305 568,717,570Other income 17 25,264,318 3,090,742Total revenue (I) 1,699,920,623 571,808,312
ExpensesCost of materials consumed 18 490,108,439 59,738,002Employee benefits expense 19 167,132,495 95,403,224Other expenses 20 676,517,477 225,054,028Total Expense (II) 1,333,758,411 380,195,254
Earnings before Interest, Tax, Depreciation andAmortisation (EBITDA) (I-II)
366,162,212 191,613,058
Depreciation and amortization expense 21 178,104,149 163,513,617Finance costs 22 235,269,274 221,550,444Profit/(Loss) before tax (47,211,211) (193,451,003)
Tax expensesa) Current income tax - -b) Adjustment of tax relating to earlier periods (261,663) -c) Deferred tax charge/ (credit) (16,850,366) -Total Income tax expenses (17,112,029) -Profit/(Loss) for the year (30,099,182) (193,451,003)
OTHER COMPREHENSIVE INCOME 23Other comprehensive income not to be reclassified toprofit or loss in subsequent periods:
Re-measurement (losses)/gains on defined benefit plans 290,695 (31,249)
Income tax effect - -
Other comprehensive income for the year, net of tax290,695 (31,249)
TOTAL COMPREHENSIVE INCOME FOR THE YEAR,NET OF TAX
(29,808,487) (193,482,252)
Earnings per equity share of par value of Rs.10 each 24Basic and diluted 25 (0.24) (1.76)
Summary of significant accounting policies 2.1
The accompanying notes are an integral part of thefinancial statements.
For and on behalf of the Board of Directors ofGMR Hotels and Resorts Limited
As per our report of even date
For S.R.BATLIBOI & ASSOCIATES LLP SGK Kishore Rajesh Kumar AroraICAI Firm registration number: 101049W/ E300004 Director DirectorChartered Accountants DIN: 02916539 DIN: 03174536
per Shankar Srinivasan Himansu Sekhar Samal C.BharathiPartner Chief Financial Officer Company SecretaryMembership No.: 213271 Membership No. :ACS 30329
Place: Hyderabad Place: HyderabadDate: May 02, 2017 Date: May 02, 2017
Page No. 51
GMR Hotels and Resorts LimitedCIN : U52100TG2008PLC060866Cash flow statement for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
For the year endedMarch 31, 2017
For the year endedMarch 31, 2016
Loss before tax (47,211,211) (193,451,003)Non-cash adjustment to reconcile loss before tax
Depreciation and amortisation expense 178,104,149 163,513,617Interest/ Finance expenses 184,467,474 193,391,673Profit on sale of current investments (8,050,163) -Interest income (503,656) -Re-measurement loss on defined benefit plans 290,695 (31,249)Finance costs (including fair value change in financial instruments) 30,239,017 27,142,170Provision no longer required / liability reversed (1,248,512) -Loss on Mark to Market (1,448,473) -Unrealised foreign exchange loss (1,134,514) -
Operating Profit before Working Capital Changes 333,504,806 190,565,208Adjustments for changes in working capital :Increase in trade payables 35,558,061 4,313,767(Decrease)/Increase in provisions (82,975) 1,934,686(Decrease)/Increase in other current liabilities (11,294,081) 1,977,613Decrease/(Increase) in trade receivables 12,671,213 (5,865,039)(Increase)/Decrease in inventories (32,099,251) 547,296(Increase)/Decrease in loans and advances (3,081,195) 8,446,538Increase in other financial assets (2,374,500) -Decrease in other assets 664,451 -Cash generated from operations 333,466,529 201,920,069Direct taxes paid (net of refunds) (10,313,703) (11,281,734)Net cash flow from Operating Activities (A) 323,152,826 190,638,335
Cash flows from Investing ActivitiesPurchase of fixed assets, including intangible assets, capital workin progress and capital advances (36,718,304) (17,323,904)Interest income 503,656 -Redemption/maturity of fixed deposits (not forming part of cashand cash equivalents) 1,502,774 -Proceeds from sale of investments 86,229,018 -Net cash flow/ (used) in Investing Activities (B) 51,517,144 (17,323,904)
Cash flows from Financing ActivitiesProceeds from long-term borrowings 1,365,000,000 25,000,000Repayment of Short-term borrowings (42,400,000) (7,200,000)Interest paid (184,467,474) (193,391,673)Dividend Paid and including DDT (122,403,730) -Repayment of long-term borrowings (1,282,112,140) -Net cash used in financing activities (C) (266,383,344) (175,591,673)
Net increase/(decrease) in cash and cash equivalents (A + B + C) 108,286,626 (2,277,242)Cash and cash equivalents at the beginning of the year 2,892,195 5,169,437Cash and cash equivalents taken over pursuant to scheme ofmerger (refer note 1.1) 55,387,394 -Effect of exchange differences on cash and cash equivalents held inforeign currency (130,003) -Cash and cash equivalents at the end of the year (See note below) 166,436,212 2,892,195Components of cash and cash equivalentsCash on hand 3,688,917 868,722Balance with banks – On current accounts 116,030,345 -– Exchange earner's foreign currency 44,514,823 -Credit card collection 2,202,127 2,023,473Total 166,436,212 2,892,195
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GMR Hotels and Resorts LimitedCIN : U52100TG2008PLC060866Cash flow statement for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
Notes :1. Cash flow statement is prepared after eliminating the acquisition of assets and liabilities on merger on account of non-cash transactions.2. The accompanying notes are an integral part of the financial statements.
For and on behalf of the Board of Directors ofAs per our report of even date GMR Hotels and Resorts Limited
For S.R.BATLIBOI & ASSOCIATES LLP SGK Kishore Rajesh Kumar AroraICAI Firm registration number: 101049W/ E300004 Director DirectorChartered Accountants DIN: 02916539 DIN: 03174536
per Shankar Srinivasan Himansu Sekhar Samal C.BharathiPartner Chief Financial Officer Company SecretaryMembership No.: 213271 Membership No. :ACS 30329
Place: Hyderabad Place: HyderabadDate: May 02, 2017 Date: May 02, 2017
Page No. 53
GMR Hotels and Resorts LimitedCIN : U52100TG2008PLC060866Statement of Changes in Equity for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
A. Equity Share CapitalEquity Shares of Rs.10 Each, Fully paid up No. Rs.
As at April 01, 2015 109,658,916 1,096,589,160Issued during the year - -As at March 31, 2016 109,658,916 1,096,589,160Issued during the year - -As at March 31, 2017 109,658,916 1,096,589,160
B. Other EquityItems of Other
Comprehensive IncomeTotal
Equity component ofparent company loan*
(A)
Capital Reserve(B)
Retained Earnings( C)
FVTOCI reserve(D)
E=(A+B+C+D)
At April 01, 2015 43,569,899 - (1,278,188,301) - (1,234,618,402)Profit/(Loss) for the year - - (193,451,003) - (193,451,003)Other Comprehensive Income (Note 23) - - - (31,249) (31,249)
Total Comprehensive Income 43,569,899 - (1,471,639,304) (31,249) (1,428,100,654)At March 31, 2016 43,569,899 - (1,471,639,304) (31,249) (1,428,100,654)As at April 01, 2016 43,569,899 - (1,471,639,304) (31,249) (1,428,100,654)
Capital reserve arising on account of amalgamation (Note 1.1) - 54,809,732 - - 54,809,732Profit for the year - - (30,099,182) - (30,099,182)Other Comprehensive Income (Note 23) - - - 290,695 290,695
Total Comprehensive Income 43,569,899 54,809,732 (1,501,738,486) 259,446 (1,403,099,409)
Additional equity component of parent company loan * 39,601,882 - - - 39,601,882
Equity Interim dividend# - - (59,325,000) - (59,325,000)
Tax on Interim equity dividend# - - (12,077,176) - (12,077,176)
Total Comprehensive Income 83,171,781 54,809,732 (1,573,140,662) 259,446 (1,434,899,703)At March 31, 2017 83,171,781 54,809,732 (1,573,140,662) 259,446 (1,434,899,703)
Reserves and Surplus
# Interim dividend for the financial year 2016-17 has been declared and paid out of the profits pertaining to Hyderabad Duty Free Retail Limited, prior to the date on which scheme (refer note 1.1) became effective.
* Equity component of interest free loan is shown net off deffered tax liability.
Page No. 54
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
1. Corporate information
GMR Hotels and Resorts Limited (“GHRL or the Company”) was incorporated on September 08, 2008as a wholly owned subsidiary of GMR Hyderabad International Airport Limited. The main objective ofthe Company is to carry on the business of running hotels, resorts, restaurants, lodging house,swimming pools, night clubs, exhibition halls, entertainment centers, amusement parks, wine, beershops and departmental stores, discotheques, clubs, skating halls, boating and padding pools,gymnasiums and race courses. To establish and run shops, business centres and shopping complexesincluding duty free shops and customs free trade zone, either directly or through agencies to cater to therequirements of national and International passengers and tourists.
The registered office of the Company has been changed in current year due to allotment of new pincode and the same was duly filed with registrar of companies.
The financial statements of the Company for the year ended March 31, 2017 were adopted by the Boardof Directors and authorized for issue on May 02, 2017.
1.1 Scheme of arrangement (Merger)
The board of directors of the Company had filed a scheme of arrangement ("the Scheme") underSections 391 and 394(1) of the Companies Act, 1956 between Hyderabad Duty Free Retail Limited(“HDFRL”) and GHRL and their respective shareholders which envisaged the amalgamation of theDuty Free business undertaking along with related assets and liabilities into the Company with effectfrom April 01, 2015 in accordance with the provisions of the Companies Act, 1956. The NationalCompany Law Tribunal (“NCLT”) has passed an order approving the said scheme but had changed theAppointed Date to April 01, 2016 instead of April 01, 2015 that was specified in the Scheme. The abovescheme has received the approval of the NCLT on April 18, 2017 and thereafter filed with the Registrarof Companies on April 27, 2016.
Pursuant to the approved scheme of arrangement entered into between HDFRL (‘TransferorCompany’), GMR Hotels and Resorts Limited ('GHRL') (Transferee Company) and it's shareholders andas approved by NCLT, the Company has given effect to the scheme with effect from April 01, 2016 asspecified in the order of the NCLT and the previous period financial data has not been restated.
Salient features of the Scheme are as follows:
Upon the Scheme coming into effect, all the assets and liabilities appearing in the books of accounts ofTransferor Company shall stand transferred to and vested in the Transferee Company, as the case maybe pursuant to the Scheme and shall be recorded by Transferee Company at their respective bookvalues.
Any excess of the aggregate value of the liabilities over the aggregate value of the assets of theTransferor Company shall be recognized in the Transferee Company’s financial statements as Goodwill.If the aggregate value of liabilities of the Transferor Company is lower than the aggregate value of theassets of the Transferor Company, the difference shall be treated as Capital Reserve in the TransfereeCompany’s financial statements.
Page No. 55
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
In accordance with the scheme of arrangement as approved by NCLT, Hyderabad Bench, the differencebetween the aggregate value of liabilities of the Transferor Company and the aggregate value of theassets of the Transferor Company has been recorded as capital reserve upon merger of the TransferorCompany which is different from the requirements of Accounting Standard - Ind AS 103- BusinessCombinations. Had the Company accounted for the same as per the requirements of the aforesaidaccounting standard, the amount recognized in Capital reserve would have been adjusted against theRetained earnings of the Transferee Company.
Purchase consideration
As per the share exchange ratio approved by the NCLT, the Company shall allot 1 (one) fully paid-upequity share of Rs.10 each for every 1 (one) fully paid-up equity share of Rs.10 each held by theshareholders in the Transferor Company as at the appointed date i.e. April 01, 2016 aggregating toRs. 169,500,000. Pending allotment of shares to the shareholders of Transferor Company, the Companyhas disclosed the same under Share capital suspense (Refer note 10A).
Assets and Liabilities acquired-
In accordance with the Scheme, the Company has acquired the following assets and liabilities as on theappointed date of Transferee Company at book values as at April 01, 2016 as stated in the table below:Particulars Amount (Rs)Non-current assetsTangible assets 80,565,504Intangible assets 715,391Capital work –in – progress 1,290,677Deferred tax asset (net) 858,724Loans and advances 2,883,821Other non-current assets 4,053,770Sub-total 90,367,887Current assetsCurrent investments 124,000,000Inventories 99,924,117Cash and bank balances 58,472,605Loans and advances 2,516,809Other current assets 17,566,161Sub-total 302,479,692Total assets (A) 392,847,579
Non-current liabilitiesLong term provisions 399,365Sub-total 399,365Current liabilitiesTrade payables 81,682,309Other current liabilities 33,245,601Short term provisions 53,210,572Sub-total 168,138,482Total liabilities (B) 168,537,847
Page No. 56
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
Net Assets (C = A - B) 224,309,732Purchase Consideration – (D) 169,500,000Capital Reserve (E = D - C) 54,809,732
2. Significant accounting policies
2.1 Basis of preparation
The Company’s management had previously issued its audited financial statements for the year endedMarch 31, 2016 in accordance with the accounting principles generally accepted in India, including theAccounting Standards specified under section 133 of the Companies Act, 2013 read with Rule 7 of theCompanies (Accounts) Rules, 2014 ('Indian GAAP’).
With effect from April 01, 2016, the Company is required to prepare its financial statements under theIndian Accounting Standards (‘Ind AS’) prescribed under section 133 of the Companies Act, 2013 readwith rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and the Companies(Accounting Standards) Amendment Rules, 2016. Accordingly, the Company’s management has nowprepared the Ind AS financial statements which comprise the Balance Sheets as at March 31, 2017 andMarch 31, 2016, the Opening Balance Sheet as at April 01, 2015 (transition date balance sheet), theStatements of Profit and Loss, the Statements of Cash Flows and the Statements of Changes in Equityfor the year ended March 31, 2017 and March 31, 2016 respectively, and a summary of the significantaccounting policies and other explanatory information (together hereinafter referred to as “Ind ASFinancial Statements”).
The financial statements have been prepared on a historical cost convention and on an accrual basis,except for certain financial assets and liabilities which have been measured at fair value as required byrelevant Ind AS (refer accounting policy regarding financial instruments)
2.2 Summary of significant accounting policies
(a) Current versus non-current classificationThe Company presents assets and liabilities in the balance sheet based on current/ non-currentclassification. An asset is treated as current when it is:· Expected to be realized or intended to be sold or consumed in normal operating cycle· Held primarily for the purpose of trading· Expected to be realized within twelve months after the reporting period, or· Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at
least twelve months after the reporting periodAll other assets are classified as non-current.
A liability is current when:· It is expected to be settled in normal operating cycle· It is held primarily for the purpose of trading· It is due to be settled within twelve months after the reporting period, or· There is no unconditional right to defer the settlement of the liability for at least twelve months
after the reporting period
Page No. 57
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
The Company classifies all other liabilities as non-current.
Deferred tax assets and liabilities are classified as non-current assets and liabilities.
The operating cycle is the time between the acquisition of assets for processing and their realisation incash and cash equivalents. The Company has identified twelve months as its operating cycle.
(b) Foreign currenciesThe financial statements are presented in INR (Indian rupees), which is the functional currency of theCompany and the currency of the primary economic environment in which the Company operates.
Transactions and balancesTransactions in foreign currencies are initially recorded by the Company at its functional currency spotrates at the date the transaction first qualifies for recognition. Monetary assets and liabilitiesdenominated in foreign currencies are translated at the functional currency spot rates of exchange atthe reporting date.
Exchange differences arising on settlement or translation of monetary items are recognised in the profitand loss.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translatedusing the exchange rates at the dates of the initial transactions. Non-monetary items measured at fairvalue in a foreign currency are translated using the exchange rates at the date when the fair value isdetermined. The gain or loss arising on translation of non-monetary items measured at fair value istreated in line with the recognition of the gain or loss on the change in fair value of the item (i.e.,translation differences on items whose fair value gain or loss is recognised in OCI or profit and loss arealso recognised in OCI or profit and loss, respectively).
(c) Fair value measurement
The Company measures financial instruments, such as, derivatives at fair value at each balance sheetdate.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderlytransaction between market participants at the measurement date. The fair value measurement isbased on the presumption that the transaction to sell the asset or transfer the liability takes place either:· In the principal market for the asset or liability, or· In the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible by the Company.
The fair value of an asset or a liability is measured using the assumptions that market participantswould use when pricing the asset or liability, assuming that market participants act in their economicbest interest.
A fair value measurement of a non-financial asset takes into account a market participant’s ability togenerate economic benefits by using the asset in its highest and best use or by selling it to anothermarket participant that would use the asset in its highest and best use.
Page No. 58
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
The Company uses valuation techniques that are appropriate in the circumstances and for whichsufficient data are available to measure fair value, maximising the use of relevant observable inputsand minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements arecategorized within the fair value hierarchy, described as follows, based on the lowest level input that issignificant to the fair value measurement as a whole:· Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities· Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable· Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, theCompany determines whether transfers have occurred between levels in the hierarchy by re-assessingcategorization (based on the lowest level input that is significant to the fair value measurement as awhole) at the end of each reporting period.
For the purpose of fair value disclosures, the Company has determined classes of assets and liabilitieson the basis of the nature, characteristics and risks of the asset or liability and the level of the fair valuehierarchy as explained above.
(d) Revenue recognition
Revenue is recognised to the extent that it is probable that the economic benefits will flow to theCompany and the revenue can be reliably measured, regardless of when the payment is being made.Revenue is measured at the fair value of the consideration received or receivable, taking into accountcontractually defined terms of payment and excluding taxes or duties collected on behalf of thegovernment. The Company has concluded that it is the principal in all of its revenue arrangementssince it is the primary obligor in all the revenue arrangements as it has pricing latitude and is alsoexposed to inventory and credit risks.
However, sales tax/ value added tax (VAT) is not received by the Company on its own account.Rather, it is tax collected on value added to the commodity by the seller on behalf of the government.Accordingly, it is excluded from revenue
The specific recognition criteria described below must also be met before revenue is recognised:
· Sale of goods:Revenue from the sale of goods is recognised when the significant risks and rewards of ownershipof the goods have passed to the buyer, usually on delivery of the goods. Revenue from the sale ofgoods is measured at the fair value of the consideration received or receivable, net of returns andallowances, trade discounts and volume rebates. Revenue from the sale of goods at duty freeoutlets operated by the Company is recognized at the time of delivery of goods to customers whichcoincides with transfer of risks and rewards. Sales are stated net of discounts and returns.
· Income from services and sale of products :
Ø Revenue from hotel operations comprises income by way of hotel room rent, sale of food,beverages and allied services relating to hotel and is recognised net of taxes and discountsas and when the services are provided and products are sold.
Page No. 59
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
Ø The Company recognizes revenue on accrual basis as per the terms of the agreement andon the basis of services rendered.
· Space rentals:Space rentals have been recognised as per the terms of the contract with the customers.
· Dividend income :Revenue is recognised when the right to receive the payment is established, which is generallywhen shareholders approve the dividend.
· Interest income:Interest income is recognized on a time proportion basis taking into account the amountoutstanding and the applicable interest rate. Interest income is included under the head “otherincome” in the statement of profit and loss.
(e) Taxes
Current income tax:Current income tax assets and liabilities are measured at the amount expected to be recovered from orpaid to the taxation authorities. The tax rates and tax laws used to compute the amount are those thatare enacted or substantively enacted, at the reporting date in the countries where the Companyoperates and generates taxable income.
Current income tax relating to items recognised outside profit and loss is recognised outside profit andloss (either in other comprehensive income or in equity). Current tax items are recognised incorrelation to the underlying transaction either in OCI or directly in equity. Management periodicallyevaluates positions taken in the tax returns with respect to situations in which applicable taxregulations are subject to interpretation and establishes provision where appropriate.
Deferred tax:Deferred tax is provided using the liability method on temporary differences between the tax bases ofassets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.Deferred tax liabilities are recognised for all taxable temporary differences.
Deferred tax assets are recognised for all deductible temporary differences, the carry forward ofunused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it isprobable that taxable profit will be available against which the deductible temporary differences, andthe carry forward of unused tax credits and unused tax losses can be utilized.
The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to theextent that it is no longer probable that sufficient taxable profit will be available to allow all or part ofthe deferred tax asset to be utilized. Unrecognized deferred tax assets are re-assessed at each reportingdate and are recognised to the extent that it has become probable that future taxable profits will allowthe deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the yearwhen the asset is realized or the liability is settled, based on tax rates and tax laws that have beenenacted or substantively enacted at the reporting date.
Page No. 60
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
Deferred tax relating to items recognised outside profit and loss is recognised outside profit and loss(either in other comprehensive income or in equity). Deferred tax items are recognised in correlation tothe underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set offcurrent tax assets against current tax liabilities and the deferred taxes relate to the same taxable entityand the same taxation authority.
Sales/ value added taxes paid on acquisition of assets or on incurring expenses:Expenses and assets are recognised net of the amount of sales/ value added taxes paid, except:
· When the tax incurred on a purchase of assets or services is not recoverable from the taxationauthority, in which case, the tax paid is recognised as part of the cost of acquisition of the asset oras part of the expense item, as applicable.
· When receivables and payables are stated with the amount of tax included. The net amount of taxrecoverable from, or payable to, the taxation authority is included as part of receivables orpayables in the balance sheet.
The net amount of tax recoverable from, or payable to, the taxation authority is included as part ofreceivables or payables in the balance sheet.
(f) Property, plant and equipment
Under the previous GAAP (Indian GAAP), Freehold land and buildings (property), were carried in thebalance sheet at cost of acquisition. The company has elected to regard those values of property asdeemed cost at the date of the acquisition since they were broadly comparable to fair value. Thecompany has also determined that cost of acquisition or construction does not differ materially fromfair valuation as at 1 April 2015 (date of transition to Ind AS).
Capital work in progress, plant and equipment is stated at cost, net of accumulated depreciation andaccumulated impairment losses, if any. Such cost includes the cost of replacing part of the plant andequipment and borrowing costs for long-term construction projects if the recognition criteria are met.When significant parts of plant and equipment are required to be replaced at intervals, the Companydepreciates them separately based on their specific useful lives. All other repair and maintenance costsare recognised in profit and loss as incurred.
Subsequent expenditure related to an item of property, plant and equipment is added to its book valueonly if it increases the future benefits from the existing asset beyond its previously assessed standardof performance or extends its estimated useful life. All other expenses on existing property, plant andequipment, including day-to-day repair and maintenance expenditure and cost of replacing parts, arecharged to the statement of profit and loss for the period during which such expenses are incurred.
Page No. 61
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
Depreciation is calculated on a straight-line basis over the estimated useful lives of the assets asfollows:
Particulars Years
Buildings on leasehold land 30Leasehold improvements 15Roads # 10Plant and machinery 15Electrical installations and equipment 10Furniture and fittings 8-10Office equipment 5Computers and data processing units 3 – 6Motor vehicles 8
The management has estimated, supported by independent assessment of professionals, the usefullives of the following class of assets.
The useful lives of certain plant and equipment are estimated as 8 years with respect to Kitchenequipments. This life is lower than those indicated in Schedule II of the Companies Act, 2013.
# The management has estimated in the past, supported by technical evaluation and experience, theuseful life of internal roads as 10 years.
The Company, based on technical assessment made by technical expert and management estimate,depreciates certain items of building, plant and equipment over estimated useful lives which aredifferent from the useful life prescribed in Schedule II to the Companies Act, 2013. The managementbelieves that these estimated useful lives are realistic and reflect fair approximation of the period overwhich the assets are likely to be used.
An item of property, plant and equipment and any significant part initially recognised is de-recognisedupon disposal or when no future economic benefits are expected from its use or disposal. Any gain orloss arising on de-recognition of the asset (calculated as the difference between the net disposalproceeds and the carrying amount of the asset) is included in the income statement when the asset isde-recognised.
The residual values, useful lives and methods of depreciation of property, plant and equipment arereviewed at each financial year end and adjusted prospectively, if appropriate.
Leasehold improvements are amortized over shorter of estimated useful lives or lease period.
Individual assets costing less than Rs.5,000 are fully depreciated in the year of purchase.
(g) Intangible assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initialrecognition, intangible assets are carried at cost less any accumulated amortization and accumulatedimpairment losses. Internally generated intangibles, excluding capitalized development costs, are notcapitalized and the related expenditure is reflected in profit and loss in the period in which theexpenditure is incurred.
Page No. 62
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
Cost relating to software licenses, which are acquired, are capitalized and amortized on a straight –line basis over their useful life not exceeding six years.
Gains or losses arising from de-recognition of an intangible asset are measured as the differencebetween the net disposal proceeds and the carrying amount of the asset and are recognised in thestatement of profit and loss when the asset is derecognized.
(h) Leases
The determination of whether an arrangement is (or contains) a lease is based on the substance of thearrangement at the inception of the lease. The arrangement is, or contains, a lease if fulfilment of thearrangement is dependent on the use of a specific asset or assets and the arrangement conveys a rightto use the asset or assets, even if that right is not explicitly specified in an arrangement.For arrangements entered into prior to April 01, 2015, the Company has determined whether thearrangement contain lease on the basis of facts and circumstances existing on the date of transition
Company as a lesseeA lease is classified at the inception date as a finance lease or an operating lease. A lease that transferssubstantially all the risks and rewards incidental to ownership to the Company is classified as afinance lease.
Operating lease payments are recognised as an expense in the statement of profit and loss on astraight-line basis over the lease term.
Company as a lessorLeases in which the Company does not transfer substantially all the risks and rewards of ownership ofan asset are classified as operating leases. Rental income from operating lease is recognised on astraight-line basis over the term of the relevant lease period. Initial direct costs incurred in negotiatingand arranging an operating lease are added to the carrying amount of the leased asset and recognisedover the lease term on the same basis as rental income. Contingent rents are recognised as revenue inthe period in which they are earned.
Leases are classified as finance leases when substantially all of the risks and rewards of ownershiptransfer from the Company to the lessee. Amounts due from lessees under finance leases are recordedas receivables at the Company’s net investment in the leases. Finance lease income is allocated toaccounting periods so as to reflect a constant periodic rate of return on the net investment outstandingin respect of the lease.
(i) Borrowing costs
Borrowing costs directly attributable to the acquisition, construction or production of an asset thatnecessarily takes a substantial period of time to get ready for its intended use or sale are capitalized aspart of the cost of the asset. All other borrowing costs are expensed in the period in which they occur.Borrowing costs consist of interest and other costs that an entity incurs in connection with theborrowing of funds. Borrowing cost also includes exchange differences to the extent regarded as anadjustment to the borrowing costs.
Page No. 63
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
(j) Inventories
Inventories are valued at lower of cost and net realizable value. Cost is determined on a weightedaverage basis and includes other directly associated costs in bringing the inventories to their presentlocation and condition. Net realizable value is the estimated selling price in the ordinary course ofbusiness, less estimated costs necessary to make the sale.
(k) Impairment of non-financial assets
The Company assesses, at each reporting date, whether there is an indication that an asset may beimpaired. If any indication exists, or when annual impairment testing for an asset is required, theCompany estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of anasset’s or cash-generating unit’s (CGU) fair value less costs of disposal and its value in use.Recoverable amount is determined for an individual asset, unless the asset does not generate cashinflows that are largely independent of those from other assets or groups of assets. When the carryingamount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and iswritten down to its recoverable amount.In assessing value in use, the estimated future cash flows are discounted to their present value using apre-tax discount rate that reflects current market assessments of the time value of money and the risksspecific to the asset. In determining fair value less costs of disposal, recent market transactions aretaken into account. If no such transactions can be identified, an appropriate valuation model is used.These calculations are corroborated by valuation multiples, quoted share prices for publicly tradedcompanies or other available fair value indicators.
The Company bases its impairment calculation on detailed budgets and forecast calculations, whichare prepared separately for each of the Company’s CGUs to which the individual assets are allocated.
Impairment losses are recognised in the statement of profit and loss. An assessment is made at eachreporting date to determine whether there is an indication that previously recognised impairmentlosses no longer exist or have decreased. If such indication exists, the Company estimates the asset’s orCGU’s recoverable amount. A previously recognised impairment loss is reversed only if there has beena change in the assumptions used to determine the asset’s recoverable amount since the lastimpairment loss was recognised. The reversal is limited so that the carrying amount of the asset doesnot exceed its recoverable amount, nor exceed the carrying amount that would have been determined,net of depreciation, had no impairment loss been recognised for the asset in prior periods/ years. Suchreversal is recognised in the statement of profit and loss.
(l) Provisions
GeneralProvisions are recognised when the Company has a present obligation (legal or constructive) as aresult of a past event, it is probable that an outflow of resources embodying economic benefits will berequired to settle the obligation and a reliable estimate can be made of the amount of the obligation.When the Company expects some or all of a provision to be reimbursed, for example, under aninsurance contract, the reimbursement is recognised as a separate asset, but only when thereimbursement is virtually certain. The expense relating to a provision is presented in the statement ofprofit and loss net of any reimbursement.
If the effect of the time value of money is material, provisions are discounted using a current pre-taxrate that reflects, when appropriate, the risks specific to the liability. When discounting is used, theincrease in the provision due to the passage of time is recognised as a finance cost.
Page No. 64
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
(m) Segment reporting
Identification of segmentsThe Company’s operating businesses are organized and managed separately according to the nature ofproducts and services provided, with each segment representing a strategic business unit that offersdifferent products and serves different markets. The analysis of geographical segments is based on theareas in which major operating divisions of the Company operate.
The Company has identified two business segments as follows:a) Hotels and Resorts Segment and ;b) Duty Free Segment
Allocation of common costsCommon allocable costs are allocated to each segment according to the relative contribution of eachsegment to the total common costs.
Unallocated itemsUnallocated items include general corporate income and expense items which are not allocated to anybusiness segment.
Segment accounting policiesThe Company prepares its segment information in conformity with the accounting policies adopted forpreparing and presenting the financial statements of the company as a whole.
(n) Retirement and other employee benefits
Retirement benefit in the form of provident fund is a defined contribution scheme. The Company hasno obligation, other than the contribution payable to the provident fund. The Company recognizescontribution payable to the provident fund scheme as an expense, when an employee renders therelated service. If the contribution payable to the scheme for service received before the balance sheetdate exceeds the contribution already paid, the deficit payable to the scheme is recognized as aliability after deducting the contribution already paid. If the contribution already paid exceeds thecontribution due for services received before the balance sheet date, then excess is recognized as anasset to the extent that the pre-payment will lead to, for example, a reduction in future payment or acash refund.
The Company operates a defined benefit gratuity plan in India, which requires contributions to bemade to a separately administered fund. The cost of providing benefits under the defined benefit planis determined based on actuarial valuation.
Re-measurements, comprising of actuarial gains and losses, the effect of the asset ceiling, excludingamounts included in net interest on the net defined benefit liability and the return on plan assets(excluding amounts included in net interest on the net defined benefit liability), are recognisedimmediately in the balance sheet with a corresponding debit or credit to retained earnings throughOCI in the period in which they occur. Re-measurements are not reclassified to profit and loss insubsequent periods.
Page No. 65
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
Past service costs are recognised in profit and loss on the earlier of:· The date of the plan amendment or curtailment, and· The date that the Company recognizes related restructuring costs
Net interest is calculated by applying the discount rate to the net defined benefit liability or asset.The Company recognizes the following changes in the net defined benefit obligation as an expense inthe statement of profit and loss :
· Service costs comprising current service costs, past-service costs, gains and losses oncurtailments and non-routine settlements; and
· Net interest expense or income
Accumulated leave is treated as short-term employee benefit. The Company measures the expectedcost of such absences as the additional amount that it expects to pay as a result of the unusedentitlement that has accumulated at the reporting date.
The Company treats accumulated leave as short-term employee benefit. Actuarial gains/losses areimmediately taken to the statement of profit and loss and are not deferred. The Company presentsthe entire leave as a current liability in the balance sheet, since it does not have an unconditionalright to defer its settlement for 12 months after the reporting date.
(o) Financial instrumentsA financial instrument is any contract that gives rise to a financial asset of one entity and a financialliability or equity instrument of another entity.
Financial assets
Initial recognition and measurement:All financial assets are recognised initially at fair value plus, in the case of financial assets not recordedat fair value through profit and loss, transaction costs that are attributable to the acquisition of thefinancial asset. Purchases or sales of financial assets that require delivery of assets within a time frameestablished by regulation or convention in the market place (regular way trades) are recognised on thetrade date, i.e., the date that the Company commits to purchase or sell the asset.
Subsequent measurement:For purposes of subsequent measurement, financial assets are classified in four categories:a. Debt instruments at amortized costb. Debt instruments at fair value through other comprehensive income (FVTOCI)c. Debt instruments, derivatives and equity instruments at fair value through profit and loss (FVTPL)d. Equity instruments measured at fair value through other comprehensive income (FVTOCI)
Debt instruments at amortized cost:A ‘debt instrument’ is measured at the amortized cost if both the following conditions are met:a) The asset is held within a business model whose objective is to hold assets for collecting contractualcash flows, andb) Contractual terms of the asset give rise on specified dates to cash flows that are solely payments ofprincipal and interest (SPPI) on the principal amount outstanding.
This category is the most relevant to the Company. After initial measurement, such financial assets aresubsequently measured at amortized cost using the effective interest rate (EIR) method.
Page No. 66
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees orcosts that are an integral part of the EIR. The EIR amortization is included in finance income in theprofit and loss. The losses arising from impairment are recognised in the profit and loss. This categorygenerally applies to trade and other receivables.
Debt instrument at FVTPL:FVTPL is a residual category for debt instruments. Any debt instrument, which does not meet thecriteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL.
In addition, the Company may elect to designate a debt instrument, which otherwise meets amortizedcost or FVTOCI criteria, as at FVTPL. However, such election is allowed only if doing so reduces oreliminates a measurement or recognition inconsistency (referred to as ‘accounting mismatch’). Debtinstruments included within the FVTPL category are measured at fair value with all changes recognizedin the profit and loss.
Equity investments:All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which areheld for trading and contingent consideration recognised by an acquirer in a business combination towhich Ind AS103 applies are classified as at FVTPL. For all other equity instruments, the group maymake an irrevocable election to present in other comprehensive income subsequent changes in the fairvalue. The Company makes such election on an instrument-by-instrument basis. The classification ismade on initial recognition and is irrevocable.
If the Company decides to classify an equity instrument as at FVTOCI, then all fair value changes on theinstrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts fromOCI to profit and loss, even on sale of investment. However, the Company may transfer the cumulativegain or loss within equity.
Equity instruments included within the FVTPL category are measured at fair value with all changesrecognized in the profit and loss.
De-recognition:A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financialassets) is primarily de-recognised (i.e. removed from the Company’s balance sheet) when:
a) The rights to receive cash flows from the asset have expired, orb) The Company has transferred its rights to receive cash flows from the asset, and
i. The Company has transferred substantially all the risks and rewards of the asset, orii. The Company has neither transferred nor retained substantially all the risks and rewards
of the asset, but has transferred control of the asset.
Impairment of financial assets
In accordance with Ind AS 109, the Company applies expected credit loss (ECL) model for measurementand recognition of impairment loss on the financial assets and credit risk exposure on any contractualright to receive cash or another financial asset that result from transactions that are within the scope ofInd AS 18.
Lifetime ECL are the expected credit losses resulting from all possible default events over the expectedlife of a financial instrument. The Company recognizes impairment loss allowance based on lifetimeECLs at each reporting date, right from its initial recognition.
Page No. 67
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
ECL impairment loss allowance (or reversal) recognized during the period is recognized as income/expense in the statement of profit and loss.
Financial liabilities
Initial recognition and measurementFinancial liabilities are classified, at initial recognition, as financial liabilities at fair value through profitand loss, loans and borrowings, payables, or as derivatives designated as hedging instruments in aneffective hedge, as appropriate.
All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings andpayables, net of directly attributable transaction costs.
Subsequent measurement:The measurement of financial liabilities depends on their classification, as described below:Financial liabilities at fair value through profit and loss
Financial liabilities at fair value through profit and loss include financial liabilities designated uponinitial recognition as at fair value through profit and loss.
Financial liabilities designated upon initial recognition at fair value through profit and loss aredesignated as such at the initial date of recognition, and only if the criteria in Ind AS 109 are satisfied.For liabilities designated as FVTPL, fair value gains/ losses attributable to changes in own credit riskare recognized in OCI. These gains/ loss are not subsequently transferred to profit and loss. However,the Company may transfer the cumulative gain or loss within equity. All other changes in fair value ofsuch liability are recognised in the statement of profit and loss. The Company has not designated anyfinancial liability as at fair value through profit and loss.
Loans and borrowings:After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortizedcost using the EIR method. Gains and losses are recognised in profit and loss when the liabilities arederecognized as well as through the EIR amortization process.
Amortized cost is calculated by taking into account any discount or premium on acquisition and fees orcosts that are an integral part of the EIR. The EIR amortization is included as finance costs in thestatement of profit and loss.
De-recognition:A financial liability is derecognized when the obligation under the liability is discharged or cancelled orexpires.
Reclassification of financial assetsThe Company determines classification of financial assets and liabilities on initial recognition. Afterinitial recognition, no reclassification is made for financial assets which are equity instruments andfinancial liabilities. If the Company reclassifies financial assets, it applies the reclassificationprospectively from the reclassification date which is the first day of the immediately next reportingperiod following the change in business model. The Company does not restate any previouslyrecognised gains, losses (including impairment gains or losses) or interest.
Page No. 68
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
(p) Cash and cash equivalents
Cash and cash equivalents in the balance sheet comprise cash at banks and on hand and short-termdeposits with an original maturity of three months or less, which are subject to an insignificant risk ofchanges in value.
For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and short-term deposits, as defined above, net of outstanding bank overdrafts as they are considered an integralpart of the Company’s cash management.
(q) Cash dividend and non-cash distribution to equity holders of the parent
The Company recognizes a liability to make cash or non-cash distributions to equity holders of theparent when the distribution is authorised and the distribution is no longer at the discretion of theCompany. As per the corporate laws in India, a distribution is authorised when it is approved by theshareholders. A corresponding amount is recognized directly in equity.
Non-cash distributions are measured at the fair value of the assets to be distributed with fair value re-measurement recognised directly in equity.
Upon distribution of non-cash assets, any difference between the carrying amount of the liability andthe carrying amount of the assets distributed is recognised in the statement of profit and loss.
(r) Contingent liabilities
A contingent liability is a possible obligation that arises from past events whose existence will beconfirmed by the occurrence or non–occurrence of one or more uncertain future events beyond thecontrol of the Company or a present obligation that is not recognized because it is not probable that anoutflow of resources will be required to settle the obligation. A contingent liability also arises inextremely rare cases where there is a liability that cannot be recognized because it cannot be measuredreliably. The Company does not recognize a contingent liability but discloses its existence in thefinancial statements.
Contingent assets are only disclosed when it is probable that the economic benefits will flow to theentity.
(s) Earnings per share
Basic Earnings per Share is calculated by dividing the net profit and loss for the period attributable toequity shareholders by the weighted average number of equity shares outstanding during the period.
For the purpose of calculating Diluted Earnings per Share, the net profit and loss for the periodattributable to equity shareholders and the weighted average number of shares outstanding during theperiod are adjusted for the effects of all dilutive potential equity shares.
(t) Measurement of EBITDA
The Company has elected to present earnings before Interest, Tax, Depreciation and Amortization(EBITDA) as a separate line item on the face of the statement of profit and loss. The Company measuresEBITDA on the basis of profit/ (loss) from continuing operations. In its measurement, the Companydoes not include depreciation and amortization expense, finance cost and tax expense.
Page No. 69
GMR Hotels and Resorts LimitedCIN : U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
3. Property, Plant and Equipment (Amount in Rupees)
Particulars #Buildings onleasehold land
Leaseholdimprovements
Roads Plant and machinery Electrical Installationsand Equipment
Furniture and fittings Office Equipment Computers and dataprocessing units
Motor Vehicles Total
Gross BlockAt April 01, 2015 1,211,771,725 - 2,449,742 185,152,575 115,528,852 110,920,970 5,207 434,029 1,079,667 1,627,342,767Additions 181,107 - - 3,648,402 - 2,402,433 455,973 652,836 - 7,340,751Disposals - - - - - - - - - -At March 31, 2016 1,211,952,832 - 2,449,742 188,800,977 115,528,852 113,323,403 461,180 1,086,865 1,079,667 1,634,683,518Acquired on account of merger(Note 1.1) - 65,939,131 - 892,463 2,215,475 9,545,506 376,345 1,596,584 - 80,565,504Additions 8,781,184 - - 11,564,744 27,000 10,650,813 119,814 7,965,946 - 39,109,501Disposals - - - - - - - - - -At March 31, 2017 1,220,734,016 65,939,131 2,449,742 201,258,184 117,771,327 133,519,722 957,339 10,649,395 1,079,667 1,754,358,523
DepreciationAt April 01, 2015 - - - - - - - - - -Charge for the year 53,033,987 - 571,345 24,940,331 28,882,213 55,188,327 29,593 414,378 444,662 163,504,836Disposals - - - - - - - - - -At March 31, 2016 53,033,987 - 571,345 24,940,331 28,882,213 55,188,327 29,593 414,378 444,662 163,504,836Charge for the year 53,834,917 7,913,423 571,345 24,256,736 29,286,504 57,450,332 245,973 2,805,487 444,662 176,809,379Disposals - - - - - - - - - -At March 31, 2017 106,868,904 7,913,423 1,142,690 49,197,067 58,168,717 112,638,659 275,566 3,219,865 889,324 340,314,215
Net blockAt April 01, 2015 1,211,771,725 - 2,449,742 185,152,575 115,528,852 110,920,970 5,207 434,029 1,079,667 1,627,342,767At March 31, 2016 1,158,918,845 - 1,878,397 163,860,646 86,646,639 58,135,076 431,587 672,487 635,005 1,471,178,682At March 31, 2017 1,113,865,112 58,025,708 1,307,052 152,061,117 59,602,610 20,881,063 681,773 7,429,530 190,343 1,414,044,308Capital work in progress as at March 31, 2017: Rs 5,241,017 ( March 31, 2016: Rs 11,573,077 ; April 01, 2015: Rs. 2,388,267)# Building is constructed on lease hold land taken from GHIAL (holding company) who obtained land under Concession agreement with Ministry of Civil Aviation.
Page No. 70
GMR Hotels and Resorts Limited
Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
4. Intangible Assets Software Total intangible
assets
Gross BlockAt April 01, 2015 - -Additions 799,667 799,667Disposals - -At March 31, 2016 799,667 799,667Acquired on account of merger (Note 1.1) 715,391 715,391Additions 5,490,057 5,490,057Disposals - -At March 31, 2017 7,005,115 7,005,115
AmortisationAt April 01, 2015 - -Charge for the year 8,781 8,781Disposals - -At March 31, 2016 8,781 8,781Acquired on account of merger (Note 1.1) - -Charge for the year 1,294,770 1,294,770Disposals - -At March 31, 2017 1,303,551 1,303,551
Net blockAs at April 01, 2015 - -At March 31, 2016 790,886 790,886At March 31, 2017 5,701,564 5,701,564
CIN : U52100TG2008PLC060866
Page No. 71
GMR Hotels and Resorts Limited
Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
5 Financial Assets
March 31, 2017 March 31, 2016 April 01, 2015A. Current investments
Unquoted Mutual Fund :96,020.643 (March 31, 2016 : Nil; April 01, 2015: Nil) units offace value of Rs.100 each of ICICI prudential mutual fund-liquid growth plan 23,059,981 - -85,805.365 (March 31, 2016 : Nil; April 01, 2015: Nil) units offace value of Rs.100 each of Birla sunlife cash plus- growthregular plan 22,353,431 - -
45,413,412 - -Aggregate value of unquoted investments Rs 45,413,4121 (March 31, 2016 : Rs Nil; April 01, 2015 : Rs.Nil) 45,413,412 - -Aggregate amount of impairment in value of investments Rs. Nil (March 31, 2016: Rs. Nil, April 01, 2015: Rs. Nil) - - -
B. Trade Receivables
March 31, 2017 March 31, 2016 April 01, 2015Trade receivables 26,498,809 40,489,031 41,006,646Receivable from related parties (Note 32) 1,319,009 - -Total 27,817,818 40,489,031 41,006,646Less: Allowances for doubtful receivables - - (6,382,654)Total Trade Receivables 27,817,818 40,489,031 34,623,992
Others March 31, 2017 March 31, 2016 April 01, 2015
C. Non Current (unsecured, considered good unless stated otherwise)Security deposit 1,284,871 299,871 249,871
1,284,871 299,871 249,871D. Current (unsecured, considered good unless stated otherwise)
Other receivables 16,812,342 - 685,571Interest accrued on fixed deposits 30,068 - -
16,842,410 - 685,571
6 Deferred tax assets (net) March 31, 2017 March 31, 2016 April 01, 2015
Deferred tax liabilityImpact of difference between tax depreciation anddepreciation/ amortization charged for the year (114,382,662) (128,342,975) (139,181,582)Temporary difference arising on account of fair valuation on interest free loan (17,709,090) (9,322,159) (17,709,090)Gross Deferred tax Liabilities (A) (132,091,752) (137,665,134) (156,890,672)
Deferred tax assetDTA created on unabsorbed depreciation and carried forward losses 132,091,752 137,665,134 156,890,672Gross deferred tax assets (B) 132,091,752 137,665,134 156,890,672Deferred tax Assets/(Liabilities) (A-B) - - -
Deferred tax assets/ (liabilities):For the year ended March 31, 2017:
Opening Balance
Acquired onaccount of
merger (Refernote 1.1)
Recognised instatement of profit
and loss
Recognised in othercomprehensive
income Closing balanceDTL on impact of difference between tax depreciation anddepreciation/ amortization charged for the year - - 13,960,313 - 13,960,313DTA on impact of difference between tax depreciation anddepreciation/ amortization charged for the year - 176,905 (176,905) - -DTA on provision for bonus - 280,398 (280,398) - -DTA on provision for gratuity - 138,212 (138,212) - -DTA on provision for leave encashment - 263,209 (263,209) - -DTA created on unabsorbed depreciation and carried forward losses - - (13,960,313) - (13,960,313)
- 858,724 (858,724) - -
For the year ended March 31, 2016:
OpeningBalance
Recognised instatement of profit
and loss
Recognised in othercomprehensive
income Closing balanceDTL on impact of difference between tax depreciation anddepreciation/ amortization charged for the year - 10,838,607 - 10,838,607DTA created on unabsorbed depreciation and carried forward losses - (10,838,607) - (10,838,607)
- - - -
The Company has recognized deferred tax asset on unabsorbed depreciation and carried forward losses to the extent the company has sufficient taxable temporary differences.
CIN : U52100TG2008PLC060866
Trade receivables are non-interest bearing except in case of delay in payments and are generally on terms of 30 - 90 days.
The Company has accounted for deferred tax assets based on approval of business plan by board.
Page No. 72
GMR Hotels and Resorts Limited
Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
March 31, 2017 March 31, 2016 April 01, 20157 Inventories (valued at lower of cost and net realisable value)
Retail merchandise* 168,162,281 - -Packing materials 341,576 - -Food & Beverages 5,012,818 4,423,842 4,431,876Stores, spares & consumables 2,407,119 2,683,235 3,222,497Total 175,923,794 7,107,077 7,654,373*includes goods in transit of Rs. 59,295,836 (March 31, 2016: Rs Nil; April 01, 2015: Rs Nil)
8 Cash & cash equivalents and Other bank balances
March 31, 2017 March 31, 2016 April 01, 2015A Cash and cash equivalents
Balances with banks: – On current accounts 116,030,345 2,023,473 4,616,698– Exchange earner's foreign currency 44,514,823 - -Credit card collection 2,202,127 - -Cash on hand* 3,688,917 868,722 552,739Total(A) 166,436,212 2,892,195 5,169,437
B Other bank balancesOn Deposit accounts# – Deposits with original maturity for more than 3 monthsbut less than or equal to 12 months. 7,481,440 - -
7,481,440 - -Less : Amount disclosed under Other financial assets (note 5C) - - -Total(B) 7,481,440 - -# Includes margin money deposits including interest accrued of Rs 7,481,440 (March 31, 2016: Rs Nil; April 01, 2015: Rs Nil) given as lien against bank guarantee.* Including foreign currencies of Rs. 2,595,370 (March 31, 2016: Rs Nil; April 01, 2015: Rs Nil)
9 Other Assets
March 31, 2017 March 31, 2016 April 01, 2015A Non Current (unsecured, considered good unless otherwise stated)
Capital Advances 14,875,471 12,737,594 -Gratuity Asset 483,328 - -Balance with statutory/government authorities 342,007 111,936 111,936Prepayments 114,843 - -Total 15,815,649 12,849,530 111,936
B Current (unsecured, considered good unless otherwisestated)Advances recoverable in cash or kind 2,984,724 1,051,800 1,901,730Balance with statutory/government authorities 3,275,005 3,576,539 2,514,605Prepayments 9,557,676 6,784,304 4,981,401Total 15,817,405 11,412,643 9,397,736
10 Share capital March 31, 2017 March 31, 2016 April 01, 2015
Authorised share capital130,000,000 (March 31, 2016 : 110,000,000; April 01, 2015110,000,000) equity shares of Rs.10/- each 1,300,000,000 1,100,000,000 1,100,000,000Total 1,300,000,000 1,100,000,000 1,100,000,000
Issued, subscribed and fully paid-up share capital109,658,916 (March 31, 2016 : 109,658,916; April 01,2015:109,658,918) equity shares of Rs.10/- each fully paid up
1,096,589,160 1,096,589,160 1,096,589,160Total 1,096,589,160 1,096,589,160 1,096,589,160
(a) Reconciliation of the shares outstanding at the beginning and at the end of the reporting year (including Share Capital Suspense)Equity Shares
Number Rs. Number Rs. Number Rs.At the beginning of the year 109,658,916 1,096,589,160 109,658,916 1,096,589,160 109,658,916 1,096,589,160Outstanding at the end of the year 109,658,916 1,096,589,160 109,658,916 1,096,589,160 109,658,916 1,096,589,160
b) Terms/ rights attached to equity shares
(c) Shares held by holding company:
March 31, 2017 March 31, 2016 April 01, 2015GMR Hyderabad International Airport Limited and its nominees109,658,916 (March 31, 2016 : 109,658,916; April 01, 2015:109,658,918) equity shares of Rs.10/- each fully paid up 1,096,589,160 1,096,589,160 1,096,589,160
(d) Details of shareholders holding more than 5% shares in the company
Nos % holding in Nos % holding in Nos % holding inEquity shares of Rs.10 each fully paidGMR Hyderabad International Airport Limited and its nominees 109,658,916 100% 109,658,916 100% 109,658,916 100%
March 31, 2016 April 01, 2015
CIN : U52100TG2008PLC060866
As per records of the Company, including its register of shareholders/ members and other declarations received from shareholder regarding beneficial interest, the above shareholding representsboth legal and beneficial ownerships of shares.
The Company has only one class of equity shares having a par value of Rs.10/- per share. Each holder of equity share is entitled to one vote per share. The Company declares and pays dividendin Indian Rupees. The dividend proposed by the Board of Directors is subject to approval of the shareholders in the ensuing Annual General meeting. In the event of liquidation of the Company,the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number ofequity shares held by the shareholders.
March 31, 2017 March 31, 2016 April 01, 2015
Out of equity shares issued by the Company, shares held by its holding company are as below:
March 31, 2017
Page No. 73
GMR Hotels and Resorts Limited
Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
10A Share capital suspense March 31, 2017 March 31, 2016 April 01, 2015
16,950,000 (March 31, 2016: Nil; April 01, 201: Nil) Equityshares of Rs 10 each to be issued as fully paid up pursuant tomerger of Hyderabad Duty Free Limited under the schemeof arrangement without payment being received in cash.(note 1.1)
169,500,000 - -
169,500,000 - -
11 Other equity March 31, 2017 March 31, 2016 April 01, 2015
Other reservesCapital reserve arising on account of amalgamation (note 1.1) 54,809,732 - -
Equity component of other financial instruments 83,171,781 43,569,899 43,569,899FVTOCI reserve 259,446 (31,249) -Total 138,240,959 43,538,650 43,569,899The disaggregation of changes in OCI by each type of reserves in equity is disclosed in note 23
11.1 Distributions made and proposed March 31, 2017 March 31, 2016 April 01, 2015
Cash dividends on Equity shares declared and paid:
Interim dividend for the year ended March 31, 2017 : Rs3.50 per share (March 31, 2016 : Rs. Nil per share ; April 01,2015: Rs. Nil per share)#
59,325,000 -
Dividend distribution tax on interim dividend 12,077,176 - 71,402,176 - -
12 Financial Liabilities
March 31, 2017 March 31, 2016 April 01, 2015A. Non Current borrowings
Term LoansIndian rupee term loan from banks (secured) - 1,153,362,140 1,247,862,140Indian rupee term loan from NBFC (secured) 1,208,222,147 - -Loan from related party (unsecured) 659,957,181 572,029,136 449,886,966
1,868,179,328 1,725,391,276 1,697,749,106
Current Maturities of Non Current borrowings Term LoansIndian rupee term loan from banks (secured) - 94,500,000 70,000,000Indian rupee term loan from NBFC (secured) 18,750,000 - -
18,750,000 94,500,000 70,000,000Less: Amount disclosed under the head "other current financial liabilities" (Note 12E) (18,750,000) (94,500,000) (70,000,000)
Total - - -
B. Current borrowingsCash Credit from Banks (Secured) - 42,400,000 49,600,000
- 42,400,000 49,600,000
Notes:a)
b)
c)
d)
CIN : U52100TG2008PLC060866
Current Borrowings: Cash Credit from a bank is secured by way of first paripassu charge on entire current assets and cash flows including stocks, receivables, bank balances etc. with existingterm lenders and collateral first paripassu charge by way of extension of equitable mortgage of the immovable properties and assets pertaining to the hotel project ( including assignment ofleasehold rights in the case of leasehold land, if any ) and assets of the project consisting of land admeasuring 5.37 acres together with all the buildings, structures etc on such land.The cash creditis repayable on demand and carries interest in the range of 2.50% above such bank's base rate to 3.8% above such bank's base rate.
The above cash credit facilities obtained from a bank have been fully repaid during the current year.
Term loan from banks (secured) carry interest at base rate plus agreed spread, which is subject to reset at the end of agreed intervals. The interest rate during the year is 12.20% (March 31, 2016 :12.20 %; April 01 2015: 12.75%). The loan was repayable in 48 unequal quarterly instalments beginning from December 31, 2012. The loan is secured by first pari passu charge by way of equitablemortgage of the immovable properties pertaining to the Hotel Project (including assignment of leasehold rights in the case of leasehold land, if any) and assets of the project consisting of landadmeasuring 5.37 acres together with all the buildings, structures etc on such land, first pari passu charge on the whole of stocks of raw materials, goods-in-process, semi-finished goods andfinished goods, consumable stores and spares, book debts, bills, movable plant and machinery, machinery spares, tools and accessories and other movables, whole of equipments including itsspares, tools and accessories, software, whether installed or not and whether in the possession or under the control of the Company or not, all the bank accounts (whether escrow and no lien orotherwise) and all estate, rights, title, interest, benefits, claims and demands, trade receivables, all cash flows and receivables and proceeds. Also the above loan is secured by corporate guaranteegiven by the Holding Company (GMR Hyderabad International Airport Limited).
However, during the current year, the above term loans obtained from banks have been prepaid and settled in full by utilizing the proceeds of a fresh term loan facility availed from a NonBanking Financial Company (NBFC).
Term loan from NBFC (secured) carries interest at base rate plus agreed spread. The loan carries the interest rate of 10.8% during the current year. The loan is repayable in 54 quaterlyinstallments commencing from January 2017 to April 2030. The Rupee term loan is secured by a pari passu first charge on immovable assets (including assignment of leasehold rights in the case ofleasehold land) , movable assets, revenues, book debts, bank accounts and a pledge over 30% of the equity shares of the Company.
Also the above loan is secured by an irrevocable and unconditional corporate guarantee given by the Holding Company (GMR Hyderabad International Airport Limited).
Loan from a related party represents loan taken from the holding company. In current year, the holding company has agreed to extend the loan repayment by another 2 years from March 31, 2017till March 31, 2019 or till the repayment of loan by the Company whichever is earlier. Out of the above, loan amounting to Rs. 423,300,000 (March 31, 2016: Rs 308,300,000; April 01, 2015: Rs.213,300,000) is chargeable to interest in the range of 10.25% to 11% p.a and the balance loan of Rs.236,657,181 is interest free.
# Interim dividend for the financial year 2016-17 has been declared and paid out of the profits pertaining to Hyderabad Duty Free Retail Limited, prior to the date on which scheme becameeffective.
Page No. 74
GMR Hotels and Resorts Limited
Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
C Trade payables March 31, 2017 March 31, 2016 April 01, 2015
- Outstanding dues to creditors other than micro enterprises and small enterprises 166,991,758 39,336,297 34,515,432- Outstanding dues to related parties (Note 32) 23,805,930 - -
190,797,688 39,336,297 34,515,432- Outstanding dues to micro enterprises and small enterprises (Note 40) - - 507,098
190,797,688 39,336,297 35,022,530
Terms and conditions of the above financial liabilities:Trade payables are non-interest bearing and are normally settled on 30-120 day terms.For explanations on the Company’s credit risk management processes, refer to Note 36.
Other financial liabilities
March 31, 2017 March 31, 2016 April 01, 2015D Non Current Liabilities
Security deposit received from customers 1,362,000 1,362,000 900,000 1,362,000 1,362,000 900,000
E Current LiabilitiesCurrent maturities of long-term borrowings (note 12A)
18,750,000 94,500,000 70,000,000Retention Money and Kept on hold 235,318 187,261 234,485Capital Creditors 5,682,416 722,217 673,669Total 24,667,734 95,409,478 70,908,154
Breakup of financial liabilities carried at amortised costMarch 31, 2017 March 31, 2016 April 01, 2015
Non current borrowings 1,868,179,328 1,725,391,276 1,697,749,106Current maturities of non current borrowings 18,750,000 94,500,000 70,000,000Current borrowings - 42,400,000 49,600,000Security deposit received from customers 1,362,000 1,362,000 900,000Trade Payables 190,797,689 39,336,298 35,022,527Other Payables 5,917,734 909,478 908,154Total financial liabilities carried at amortised cost 2,085,006,751 1,903,899,052 1,854,179,787
13 Net Employee Defined benefit liabilities March 31, 2017 March 31, 2016 April 01, 2015
A. Long Term ProvisionsProvision for gratuity (note 26) 3,528,472 3,214,455 2,481,740Total 3,528,472 3,214,455 2,481,740
B. Short Term ProvisionsProvision for leave benefits (note 26) 4,377,831 3,617,255 2,454,916Provision for gratuity (note 26) 158,529 149,303 110,473Provision for superannuation fund 6,256 13,140 12,338Total 4,542,616 3,779,698 2,577,727
14 Non-current tax assets and current tax liabilities
March 31, 2017 March 31, 2016 April 01, 2015A Non-current tax assets
Advance tax (net) 43,404,665 29,959,551 37,466,50343,404,665 29,959,551 37,466,503
B Current tax assetsAdvance tax (net) - 33,927 3,808,709
- 33,927 3,808,709
15 Other Liabilities March 31, 2017 March 31, 2016 April 01, 2015
CurrentStatutory dues 14,460,259 7,375,958 5,149,116Advance received from customers 2,497,011 1,828,802 2,540,031Total 16,957,270 9,204,760 7,689,147
CIN : U52100TG2008PLC060866
Page No. 75
GMR Hotels and Resorts LimitedCIN : U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
16 Revenue from operations
For the year endedMarch 31, 2017
For the year endedMarch 31, 2016
Sale of productsSale of imported products 1,027,528,066 -Sale of imported productsSale of indigenous productsSale of indigenous products 37,639,279 -Sale of food and beverages 198,187,542 195,076,369Sale of services - room rent 363,786,267 343,466,018Revenue from operations 1,627,141,154 538,542,387
Other operating incomeRental income (note 37) 16,732,759 4,312,598Other operating services 30,782,392 25,862,585Total 47,515,151 30,175,183
Total income 1,674,656,305 568,717,570
17 Other incomeFor the year ended
March 31, 2017For the year ended
March 31, 2016
Interest income on bank deposits 504,406 900,000Other incomeGain on account of foreign exchange fluctuations (net)Gain on account of foreign exchange fluctuations (net) 14,044,616 -Profit on sale of investments in mutual funds 8,053,363 10,940Sale of scrap 203,707 28,264Interest income on Income tax refund 200,477 1,732,119Provisions no longer required written back 1,248,512 419,419Other incomeOther non-operating incomeOther non-operating income 1,009,237 -
25,264,318 3,090,742
18 Cost of materials consumedFor the year ended
March 31, 2017For the year ended
March 31, 2016Opening stock 107,031,194 7,654,373Add: Purchases 559,001,039 59,190,706Less : Closing stock (175,923,794) (7,107,077)
490,108,439 59,738,002
19 Employee benefit expenseFor the year ended
March 31, 2017For the year ended
March 31, 2016Employee benefit expenseSalaries, wages and bonusSalaries, wages and bonus 134,522,420 78,269,881Employee benefit expenseContribution to provident and other fund (note 26)Contribution to provident and other fund (note 26) 7,146,592 4,935,810Employee benefit expenseGratuity expense (note 26)Gratuity expense (note 26) 2,124,200 1,252,495Employee benefit expenseStaff welfare expensesStaff welfare expenses 23,339,283 10,945,038
167,132,495 95,403,224
Page No. 76
GMR Hotels and Resorts LimitedCIN : U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
20 Other expensesFor the year ended
March 31, 2017For the year ended
March 31, 2016Rent 12,317,875 11,679,830Operating Fees 36,399,916 34,502,692Operating & maintainance expenses 38,276,811 32,411,187Concession fee 345,290,028 -License Fee 12,392,914 -Manpower outsourcing charges 15,658,412 13,009,542Concession fee and license feeElectricity & water chargesElectricity & water charges 64,483,896 59,222,254Concession fee and license feeRates and taxesRates and taxes 22,379,816 17,013,521Concession fee and license feeInsuranceInsurance 2,344,462 1,169,430Repairs and maintenance - others 38,792,655 21,234,50020. Other expensesAdvertising and sales promotionAdvertising, selling and distribution expense 17,464,140 10,375,760Concession fee and license feeTravelling and conveyanceTravelling and conveyance 16,608,772 13,272,104Concession fee and license feeCommunication costsCommunication costs 12,036,586 4,237,801Concession fee and license feePrinting and stationeryPrinting and stationery 3,670,175 2,065,352Concession fee and license feeSecurity chargesSecurity charges 5,121,515 1,413,018Concession fee and license feeLegal and professional feesLegal and professional fees 7,218,359 2,152,308Concession fee and license feeManagement feeManagement fee 20,700,000 -Concession fee and license feePayment to auditors (including service tax) (refer details below)Payment to auditors (including service tax) (refer details below) 2,125,326 609,974Corporate social responsibility expense (note 25) 1,803,300 -Concession fee and license feeMiscellaneous expensesMiscellaneous expenses 1,432,519 684,755
676,517,477 225,054,028
Payment to auditors (inclusive of service tax)
As auditor Audit fees 2,000,500 600,000
Reimbursement of expenses 124,826 9,9742,125,326 609,974
21 Depreciation and amortization expenseFor the year ended
March 31, 2017For the year ended
March 31, 2016Depreciation of tangible assets (note 3)Depreciation of tangible assets (note 3) 176,809,379 163,504,836Amortization of intangible assets (note 4)Amortization of intangible assets (note 4) 1,294,770 8,781
178,104,149 163,513,617
22 Finance costsFor the year ended
March 31, 2017For the year ended
March 31, 2016Finance costsInterest on borrowingsInterest on borrowings 197,135,683 193,391,673Unwinding of discount and effect of changes in discount rate onborrowings (Note 12) 30,961,164 27,142,170Finance costsBank chargesBank charges 7,172,427 1,016,601
235,269,274 221,550,444
23 Components of Other Comprehensive Income (OCI)The disaggregation of changes to OCI by each type of reserve in equity is shown below:During the year ended March 31, 2017
FVTOCI reserve TotalRemeasurement costs on net defined benefit liability 290,695 290,695Deferred tax effect on remeasurement costs - -Total 290,695 290,695Reserves representing realised gains or losses 290,695 290,695
During the year ended March 31, 2016FVTOCI reserve Total
Remeasurement costs on net defined benefit liability (31,249) (31,249)Deferred tax effect on remeasurement costs - -Total (31,249) (31,249)Reserves representing realised gains or losses (31,249) (31,249)
Page No. 77
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
24. Earnings per share (EPS)
The following reflects the profit and share data used in the basic and diluted Earnings per share (EPS)computations:
Particulars March 31, 2017 March 31, 2016Net loss for calculation of basic/diluted EPS (30,099,182) (193,451,003)Weighted average number of equity shares (including sharecapital suspense) in calculating basic/diluted EPS (note 10A)
126,608,916 109,658,916
Earnings per share (Basic and diluted) (Rs.) (0.24) (1.76)
25. Corporate Social Responsibility expenditure
Particulars March 31, 2017
a) Gross amount required to be spent by the Company during the year -
b) Amount spent during the year ending on March 31, 2017: In cash Yet to be paidin cash
i) Construction/acquisition of any asset — —
ii) On purposes other than (i) above 1,803,300 —
26. Retirement and other employee benefits
a. Defined contribution plan
Contribution to Provident and other funds under employee benefits expense are as under:Particulars March 31, 2017 March 31, 2016
Contribution to provident fund 6,289,289 4,780,537Contribution to employee state insurance 778,280 -Contribution to labour welfare fund 886 -Contribution to superannuation fund 78,137 155,273Total 7,146,592 4,935,810
b. Defined benefit plans
The Company has a defined benefit gratuity plan. Every employee who has completed five yearsor more of service gets a gratuity on departure at 15 days of last drawn basic salary for eachcompleted year of service.
The following tables summarise the components of net benefit expense recognised in the statementof profit and loss and the amounts recognised in the balance sheet.
Page No. 78
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
Hotels and Resort segment-Non Funded
i. Net employee benefit expenses (recognized in the employee benefits expenses)Particulars March 31, 2017 March 31, 2016
Current service cost 1,045,533 909,822
Interest cost on benefit obligation 248,892 188,240 Net employee benefit expenses 1,294,425 1,098,062
ii. Net liability to be recognized in the balance sheet:
ParticularsMarch 31,
2017March 31,
2016April 01,
2015Present value of defined benefit obligation 3,687,001 3,363,758 2,592,213Net liability to be recognized in the balancesheet
3,687,001 3,363,758 2,592,213
iii.Changes in the present value of the defined benefit obligation:
ParticularsMarch 31,
2017March 31,
2016April 01,
2015
Opening defined benefit obligation 3,363,758 2,592,213 1,868,270
Current service cost 1,045,533 909,822 629,729
Interest cost on benefit obligation 248,892 188,240 129,948
Benefit Payments (345,671) (357,766) (926,855)Acquisitions costs/(credit) - - (287,040)
Net Actuarial loss/(gain) on obligation (625,511) 31,249 1,178,161Closing defined benefit obligation 3,687,001 3,363,758 2,592,213
iv. Re-measurement adjustments:Particulars March 31, 2017 March 31, 2016Experience loss/ (gain) on plan liabilities (913,181) 31,249Financial loss/ (gain) on plan assets 287,670 -
v. Amount recognised in statement of other comprehensive income (OCI):Particulars March 31,
2017March 31,
2016April 01,
2015Opening amount recognised in OCI 31,249 - -Remeasurement for the year- Obligation(gain)/loss
(625,511) 31,249 -
Closing amount recognised in OCI (594,262) 31,249 -
Page No. 79
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
a. Principal assumptions used in determining gratuity obligation:
ParticularsMarch 31,
2017March 31,
2016April 01,
2015Discount rate 7.10% 7.80% 7.80%Attrition rate 5.00% 5.00% 5.00%Expected rate of salary increases 6.00% 6.00% 6.00%
The estimates of future salary increases, considered in actuarial valuation, taken account ofinflation, seniority, promotion and other relevant factors, such as supply and demand in theemployment market.
b. Disclosure related to indication of effect of the defined benefit plan on the entity’sfuture cash flows:Expected benefit payments for the year ending:
Year ending March 31, 2017March 2018 164,060March 2019 218,340March 2020 287,420March 2021 373,676March 2022 522,856March 2023 to March 2027 4,178,987
c. Sensitive Analysis: A quantitative sensitivity analysis for significant assumption is as shown below:
Particulars March 31, 2017 March 31, 2016(a) Effect of 1% change in assumed discount rate - 1% increase (400,514) (356,126) - 1% decrease 479,411 424,577(b) Effect of 1% change in assumed salary escalation rate - 1% increase 450,567 388,875 - 1% decrease (384,899) (337,058)(c) Effect of 1% change in assumed attrition rate - 1% increase 19,954 37,535 - 1% decrease (27,301) (48,383)
· Duty Free Segment-Funded plan :
i. Net employee benefit expenses (recognised in the employee benefits expenses)Particulars March 31, 2017
Current service cost 350,893
Interest cost on benefit obligation (28,265) Net employee benefit expenses 322,628
Page No. 80
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
ii. Net asset to be recognized in the balance sheet:Particulars March 31, 2017
Present value of defined benefit obligation (1,550,076)Fair Value of Plan Assets 2,033,404Net asset to be recognized in the balance sheet 483,328
iii.Changes in the present value of the defined benefit obligation:Particulars March 31, 2017
Opening defined benefit obligation 893,950
Current service cost 350,893
Interest cost on benefit obligation 69,138
Benefit Payments (15,137)
Net Actuarial loss/(gain) on obligation 251,232Closing defined benefit obligation 1,550,076
iv. Changes in the fair value of plan assets:Particulars March 31, 2017
Opening fair value of plan assets 494,585Return on plan assets greater/ (lesser) than discount rate (84,234)Contribution by employer 1,540,137Interest income on plan assets 98,053Benefits Paid (15,137)Closing fair value of plan assets 2,033,404
Major Categories of plan assets as a percentage of the fair value of total plan assets are asfollows:
Particulars March 31, 2017Investment with Life Insurance Corporation of India 100%
v. Remeasurement adjustments:Particulars March 31, 2017Experience loss/ (gain) on plan liabilities 251,232Financial loss/ (gain) on plan assets -
vi. Amount recognised in statement of other comprehensive income (OCI):Particulars March 31, 2017Opening amount recognised in OCI -Remeasurement for the year- Obligation (gain)/loss 334,816Closing amount recognised in OCI 334,816
Page No. 81
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
a. Principal assumptions used in determining gratuity obligation:Particulars March 31, 2017
Discount rate 7.10%Attrition rate 5.00%Expected rate of salary increases 6.00%
The estimates of future salary increases, considered in actuarial valuation, taken account ofinflation, seniority, promotion and other relevant factors, such as supply and demand in theemployment market.
b. Disclosure related to indication of effect of the defined benefit plan on the entity’sfuture cash flows:Expected benefit payments for the year ending:
Year ending March 31, 2017March 2018 57,216March 2019 88,770March 2020 116,646March 2021 170,085March 2022 253,202March 2023 to March 2027 2,141,204
c. Sensitive Analysis: A quantitative sensitivity analysis for significant assumption is as shown below:
Particulars March 31, 2017(a) Effect of 1% change in assumed discount rate - 1% increase (178,058) - 1% decrease 216,085(b) Effect of 1% change in assumed salary escalation rate - 1% increase 216,496 - 1% decrease (181,424)(c) Effect of 1% change in assumed attrition rate - 1% increase 3,570 - 1% decrease (6,845)
c. Liability towards compensated absence is provided based on actuarial valuation amounts toRs. 4,377,831 (March 31, 2016: Rs. 3,617,255; April 01, 2015: Rs. 2,454,916).
27. Expenditure in foreign currency (on accrual basis)Particulars March 31, 2017 March 31, 2016Concession fees 345,290,028 -Professional Charges 305,875 140,229Others 8,754,490 5,571,696Total 354,350,393 5,711,925
Page No. 82
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
28. Earnings in foreign currency (on accrual basis)Particulars March 31, 2017 March 31, 2016
Revenue from operations (net) 982,435,768 144,192,048Total 982,435,768 144,192,048
29. CIF value of importsParticulars March 31, 2017 March 31, 2016
Purchase of goods 464,185,417 -Stores, spares and consumables 1,895,146 810,416Capital goods 11,214,572 4,639,699Total 477,295,135 5,450,115
30. Imported, indigenous Food and beverages, stores, spares and consumables consumed:
Particulars March 31, 2017 March 31, 2016% Value in rupees % Value in rupees
Imported 2 2,396,959 4 5,665,829Indigenous 98 111,015,190 96 124,833,438
100 113,412,149 100 130,499,267It is not practicable to furnish details of inventory items in view of the considerable number ofitems with diverse nature.
31. Identification of segments
The chief operational decision maker monitors the operating results of its business segments separatelyfor the purpose of making decisions about resource allocation and performance assessment. Segmentperformance is evaluated based on profit and loss and is measured consistently with profit and loss in thefinancial statements.
Operating segments in FY 2016-17 have been identified on account of merger with the transferor entitywhich is primarily engaged in the business of operating duty free retail outlets and have been identifiedas per the quantitative criteria specified in the Ind AS.
Page No. 83
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
PARTICULARS
Hotels andResorts
Duty Freeoutlet
Intersegment
eliminationsTotal
2016-17 2016-17 2016-17 REVENUE
External Sales 561,973,809 1,065,167,345 - 1,627,141,154
Other Operating Revenue 34,982,312 12,532,839 - 47,515,151
Total Revenue 596,956,121 1,077,700,184 - 1,674,656,305 SEGMENT RESULTS
Operating Profit 27,206,758 135,586,988 - 162,793,746 Profit / (Loss) on Sale of TangibleAssets - - - -
Net Operating Profit 27,206,758 135,586,988 - 162,793,746
Other Income 815,745 2,350,594 - 3,166,339 Finance Costs - - - (235,269,274)
Exchange gain/(loss) - 14,044,616 - 14,044,616 Profit on Sale of Current Investments(Net) 410,933 7,642,430 - 8,053,363
Tax Expense - - - (17,112,029)
Exceptional Items - - - -
Net Profit/(loss) 28,433,436 159,624,628 - (30,099,182)
Segment Assets 1,436,207,484 461,612,416 - 1,897,819,900 Segment Liabilities
1,950,353,429 159,681,679 - 2,110,035,108 OTHER INFORMATION
Capital Expenditure 29,967,015 7,009,806 - 36,976,821 Depreciation and amortizationexpense 166,521,593 11,582,556 - 178,104,149 Non cash expenditure other thandepreciation and amortization 30,961,164 - - 30,961,164
Page No. 84
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
32. Details of transactions with related parties
A. Names of related parties and related party relationship(i) Holding company GMR Hyderabad International Airport Limited
(GHIAL)(ii) GHIAL’s holding company GMR Airports Limited (GAL)
(iii) GAL’s holding company GMR Infrastructure Limited (GIL)
(iv) Ultimate holding company GMR Enterprises Private Limited(v) Fellow subsidiary companies (Where
transactions have taken place duringthe reporting periods)
GMR Airport Developers LimitedRaxa Security Services LimitedGMR Hyderabad Aviation SEZ LimitedGMR Hyderabad Aerotropolis LimitedGMR Aviation Private LimitedKakinada SEZ Private LimitedGMR Aero Technic LimitedDelhi International Airport Private LimitedGMR Warora Energy LimitedGMR Goa International Airport LimitedGMR Vemagiri Power Generation LimitedGMR Business Process Services Private LimitedGMR Varalakshmi FoundationGMR Sports Private LimitedAsia Pacific Flight Training Academy LimitedGMR Energy LimitedGMR Tuni Anakapalli Expressways Private LimitedGMR Tambaram Tindivanam Expressways PrivateLimitedGMR Chhattisgarh Energy Limited
(vi) Key Management Personnel (KMP) Hotels and Resorts Segment:· GopalaKrishna Kishore Surey, Director· Rajesh Kumar Arora, Director· Kavitha Gudapati, Independent Director· Vijay Bhaskar Pedamallu, Independent Director· Mohammed Ismail, Independent Director· Rajasekhar Reddy, Independent Director
(upto January 18, 2016)· Siva Kameswari Vissa, Independent Director
(upto September 25, 2016 )· C Prasanna, Independent Director
(upto October 17, 2016)· Himansu Sekhar Samal, Chief Financial Officer· Bharathi Chellappa, Company Secretary
(w.e.f October 25, 2016)· Pankaj Kumar Mishra, Company Secretary
(upto August 27, 2016)
Duty Free Segment:· SGK Kishore, Director· Rajesh Arora, Director· George Cherian, Director
Page No. 85
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
· Ravela Srisatya Lakshmi NarsimhaBhaskarudu, Independent Director
· Somayajulu Ayyanna Kodukula, IndependentDirector
· Kandi Sreenivasulu, Company Secretary(upto Oct 21, 2016)
· Venkateshwara Swamy Yenduru, CFO(upto Jan 16, 2017)
· Subhash Murikenchery, CEO(upto June 01, 2016)
· Saurabh Kumar, CEO(w.e.f June 01, 2016)
· Vishwa Sai Yakkali, Company Secretary(w.e.f October 22, 2016)
· Venu Madhav Tenjarla, CFO(w.e.f January 17, 2017)
B. Related party transactionsSl.No. Particulars March 31, 2017 March 31, 2016 (i) Repairs and maintenance – others @
- GMR Hyderabad International Airport Limited 9,026,986 -(ii) Communication costs @
- GMR Hyderabad International Airport Limited- GMR Airport Developers Limited
1,568,3313,448,750
--
(iii) Concession fee and license fee @
- GMR Hyderabad International Airport Limited 357,682,942 - (iv) Employee benefits expense @
- GMR Hyderabad International Airport Limited 12,079,776 - (v) Cost of goods sold @
- GMR Hyderabad International Airport Limited 140,541 - (vi) Management fee and legal and professional fees @
- GMR Airports Limited 20,976,400 - (vii) Consultancy charges @
- GMR Hyderabad International Airport Limited 506,000 -(viii) Security charges @
- Raxa Security Services Limited 4,275,702 -(ix) Electricity charges and other expenses paid by the
Company during the year to its related parties@
-GMR Hyderabad International Airport Limited 4,042,357 -(x) Bank guarantee availed from the holding Company:-
GMR Hyderabad International Airport Limited 16,450,000 -(xi) Corporate guarantee availed from the holding
Company against loan taken from banks:GMR Hyderabad International Airport Limited 1,250,000,000 -
(xii)Tangible fixed assets – Additions- GMR Airport Developers Limited 293,616 -
Page No. 86
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
Sl.No. Particulars March 31, 2017 March 31, 2016(xiii) Lease rental paid
- GMR Hyderabad International Airport Limited 12,742,175 11,933,857(xiv) Hotel services rendered:
GMR Hyderabad International Airport LimitedGMR Airports LimitedGMR Infrastructure LimitedGMR Hyderabad Aviation SEZ LimitedGMR Hyderabad Aerotropolis LimitedGMR Aviation Private LimitedGMR Business Process Services Private LimitedKakinada SEZ Private LimitedGMR Airport Developers LimitedGMR Warora Energy LimitedGMR Sports Private LimitedGMR Goa International Airport LimitedGMR Vemagiri Power Generation LimitedGMR Aero Technic LimitedAsia Pacific Flight Training Academy LimitedDelhi International Airport Private LimitedGMR Varalakshmi foundation
2,988,192618,946387,72226,51757,813
300,97213,77641,31066,92321,093
-44,8985,646
5,612,940-
6,726162,738
2,872,365345,316795,58149,046
6,950246,140
-219,64231,231
-228,817
--
6,105,50694,62659,663
218,502(xv) Reimbursement of expenses claimed from the
company during the year by its related partiesGMR Hyderabad International Airport Limited 54,113,673 50,964,074
(xvi) Interest on unsecured loan taken from the companyGMR Hyderabad International Airport Limited 38,748,308 27,207,062
(xvii) Interest on unsecured loan taken from the company -Unwinding of discount and effect of changes indiscount rate on borrowingsGMR Hyderabad International Airport Limited 30,961,164 27,142,170
(xviii) Unsecured loan takenGMR Hyderabad International Airport Limited 115,000,000 95,000,000
(xix) Key Management Personnel-A) Hotels & Resorts Segment:
· Remuneration paid#1) Pankaj Kumar Mishra, Company Secretary2) Bharathi Chellappa, Company Secretary
· Sitting Fees-1) Kavitha Gudapati, Independent Director2) Mohammed Ismail, Independent Director3) Siva Kameswari Vissa, Independent Director4) Vijay Bhaskar Pedamallu, Independent Director5) Rajasekhar Reddy, Independent Director
B) Duty Free Segment:· Remuneration paid#1) Vishwa Sai Yakkali, Company Secretary
330,270335,043
65,00030,00065,000
130,000-
210,355
641,582-
--
125,00015,000
150,000
-
Page No. 87
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
Sl.No. Particulars March 31, 2017 March 31, 2016
· Sitting Fees-1) Ravela Srisatya Lakshmi Narsimha Bhaskarudu,
Independent Director2) Somayajulu Ayyanna Kodukula ,Independent
Director
212,575
206,825
-
-
@ figures are including service tax.# As the future liability for gratuity and leave encashment is provided on an actuarial basis for thecompany as a whole, the amount pertaining to the Key Management personnel and their relatives is notascertainable and, therefore, not included above.
C. Balances outstanding in related party accounts are as followsRelated party transactions March 31, 2017 March 31, 2016 April 01, 2015
Trade receivables / (payables):GMR Hyderabad InternationalAirport Limited (22,833,293) (3,298,514) (2,715,972)
GMR Chhattisgarh Energy Limited - - 6,653Delhi International Airport PrivateLimited 17,529 59,666 -
GMR Aviation Private Limited 132,486 142,250 -GMR Airports Limited 465,224 218,761 9,829Kakinada SEZ Private Limited 10,124 - 67,062GMR Infrastructure Limited 101,227 659,603 52,704GMR Aero Technic Limited 426,829 1,576,847 1,793,481GMR Energy Limited - - 6,603GMR Tuni Anakapalli ExpresswaysPrivate Limited - - 17,715
GMR Tambaram TindivanamExpressways Private Limited - - 13,583
GMR Hyderabad Aviation SEZLimited 17,805 - -
GMR Hyderabad AerotropolisLimited 7,971 - -
GMR Goa International AirportLimited 46,200 - -
GMR Business Process ServicesPrivate Limited 13,776 - -
GMR Airport Developers Limited (387,935) - -
GMR Varalakshmi foundation 79,838 - -Raxa Security Services Limited (711,582) - -Other receivables:GMR Hyderabad InternationalAirport Limited 54,632 - -Unsecured Loan
Page No. 88
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
GMR Hyderabad InternationalAirport Limited 659,957,181 572,029,136 449,886,966
Security deposit receivableGMR Hyderabad InternationalAirport Limited 48,000 - -
Pledge of equity shares with bankagainst the loan taken by theCompanyGMR Hyderabad InternationalAirport Limited# 50,850,000 - -
Share CapitalGMR Hyderabad InternationalAirport Limited (1,096,589,160) (1,096,589,160) (1,096,589,160)Equity Component of Relatedparty loanGMR Hyderabad InternationalAirport Limited 83,171,781 43,569,899 43,569,899
# Subsequent to the balance sheet date, the same has been discharged.
C. Outstanding guarantees at the end of the year:Related party transactions March 31, 2017 March 31, 2016 April 01, 2015
Corporate guarantee availed fromthe Holding Company against loantaken from bankers: GMR Hyderabad InternationalAirport Limited 1,243,750,000 1,247,862,140 1,317,862,140
Bank guarantee availed from theHolding Company: GMR Hyderabad InternationalAirport Limited
73,750,000 57,300,000 57,300,000
Note: The Company has received certain corporate group services such as internal audit services,software and IT support etc. from the holding company, which are free of charge.
33. Significant accounting judgments, estimates and assumptionsThe preparation of the Company's financial statements requires management to make judgements,estimates and assumptions that affect the reported amounts of revenues, expenses, assets andliabilities, and the accompanying disclosures, and the disclosure of contingent liabilities. Uncertaintyabout these assumptions and estimates could result in outcomes that require a material adjustment tothe carrying amount of assets or liabilities affected in future periods.
Estimates and assumptionsThe key assumptions concerning the future and other key sources of estimation uncertainty at thereporting date, that have a significant risk of causing a material adjustment to the carrying amounts ofassets and liabilities within the next financial year, are described below. The Company based itsassumptions and estimates on parameters available when the financial statements were prepared.Existing circumstances and assumptions about future developments, however, may change due tomarket changes or circumstances arising that are beyond the control of the Company. Such changesare reflected in the assumptions when they occur.
Page No. 89
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
(i) TaxesDeferred tax assets are recognised for unused tax losses to the extent that it is probable that taxableprofit will be available against which the losses can be utilised. Significant management judgement isrequired to determine the amount of deferred tax assets that can be recognised, based upon the likelytiming and the level of future taxable profits together with future tax planning strategies.
(ii) Defined employee benefit plans (Gratuity)The cost of the defined benefit gratuity plan and other post-employment medical benefits and thepresent value of the gratuity obligation are determined using actuarial valuations. An actuarialvaluation involves making various assumptions that may differ from actual developments in thefuture. These include the determination of the discount rate, future salary increases and mortalityrates. Due to the complexities involved in the valuation and its long-term nature, a defined benefitobligation is highly sensitive to changes in these assumptions. All assumptions are reviewed at eachreporting date.The parameter most subject to change is the discount rate. In determining the appropriate discountrate for plans operated in India, the management considers the interest rates of government bonds incurrencies consistent with the currencies of the post-employment benefit obligation.
The mortality rate is based on publicly available mortality tables for the specific countries. Thosemortality tables tend to change only at interval in response to demographic changes. Future salaryincreases and gratuity increases are based on expected future inflation rates for the respectivecountries. Further details about gratuity obligations are given in Note 26.
(iii) ContingenciesContingent liabilities may arise from the ordinary course of business in relation to claims against theCompany, including legal, contractor, land access and other claims. By their nature, contingencies willbe resolved only when one or more uncertain future events occur or fail to occur. The assessment ofthe existence, and potential quantum, of contingencies inherently involves the exercise of significantjudgement and the use of estimates regarding the outcome of future events.
(iv) Fair value measurement of financial instrumentsWhen the fair values of financial assets and financial liabilities recorded in the balance sheet cannot bemeasured based on quoted prices in active markets, their fair value is measured using valuationtechniques including the DCF model. The inputs to these models are taken from observable marketswhere possible, but where this is not feasible, a degree of judgement is required in establishing fairvalues. Judgements include considerations of inputs such as liquidity risk, credit risk and volatility.Changes in assumptions about these factors could affect the reported fair value of financialinstruments. See note 35 and 36 for further disclosures.
(v) Depreciation on Property, plant and equipmentDepreciation on Property, plant and equipment is calculated on a straight-line basis using the ratesarrived at based on the useful lives estimated by the management. Considering the applicability ofSchedule II of Companies Act, 2013, the management has re-estimated useful lives and residual valuesof all its property, plant and equipment. The management believes that depreciation rates currentlyused fairly reflect its estimate of the useful lives and residual values of property, plant and equipment.
Page No. 90
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
34. Fair Values
Set out below, is a comparison by class of the carrying amounts and fair value of the Company’sfinancial instruments, other than those with carrying amounts that are reasonable approximations offair values:
Carrying value Fair value
March 31,2017
March 31,2016
April 01,2015
March 31,2017
March 31,2016
April 01,2015
Financial assets
Valued at fair value thoughprofit or loss
Investment in mutual fund 45,413,412 - - 45,413,412 - -
Valued at amortised cost
Trade receivable 27,817,818 40,489,031 34,623,992 27,817,818 40,489,031 34,623,992
Other financial assets 18,127,281 299,871 935,442 18,127,281 299,871 935,442
Cash and cash equivalent andOther bank balances 173,917,652 2,892,195 5,169,437 173,917,652 2,892,195 5,169,437
Total 265,276,163 43,681,097 40,728,871 265,276,163 43,681,097 40,728,871Financial liabilities
Valued at amortised cost
Borrowings 1,886,929,328 1,862,291,276 1,817,349,106 1,886,929,328 1,862,291,276 1,817,349,106
Trade payables 190,797,689 39,336,298 35,022,527 190,797,689 39,336,298 35,022,527
Other payables 5,917,734 909,478 908,154 5,917,734 909,478 908,154
Other financial liabilities 1,362,000 1,362,000 900,000 1,362,000 1,362,000 900,000
Total 2,085,006,751 1,903,899,052 1,854,179,787 2,085,006,751 1,903,899,052 1,854,179,787
The management assessed that cash and cash equivalents, short-term borrowings, trade receivablesand trade payables approximate their carrying amounts largely due to the short-term maturities ofthese instruments.
The fair value of the financial assets and liabilities is included at the amount at which theinstrument could be exchanged in a current transaction between willing parties, other than in aforced or liquidation sale.
Page No. 91
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
35. Fair Value hierarchyThe following table provides the fair value measurement hierarchy of the Company’s assets:
Quantitative disclosures fair value measurement hierarchy for assets as at March 31, 2017:
Fair value measurement usingDate of
valuationTotal Quoted prices
in activemarkets
Significantobservable
inputs
Significantunobservable
inputs(Level 1) (Level 2) (Level 3)
Financial assets at fairvalueInvestment in Mutualfunds
March 31,2017
45,413,412 45,413,412 - -
There have been no transfers between Level 1 and Level 2 during the period.
36.Financial risk management objectives and policies
Financial Risk Management FrameworkThe Company is exposed primarily to Credit Risk, Liquidity Risk and Market risk (fluctuations inforeign currency exchange rates and interest rate), which may adversely impact the fair value of itsfinancial instruments. The Company assesses the unpredictability of the financial environment andseeks to mitigate potential adverse effects on the financial performance of the Company.
a) Credit RiskCredit risk is the risk that counterparty will not meet its obligations under a financial instrument orcustomer contract, leading to a financial loss. Credit risk encompasses of both, the direct risk of defaultand the risk of deterioration of creditworthiness as well as concentration of risks. Credit risk iscontrolled by analyzing credit limits and creditworthiness of customers on a continuous basis to whomthe credit has been granted after obtaining necessary approvals for credit. Financial instruments that aresubject to concentrations of credit risk principally consist of trade receivables, investments, derivativefinancial instruments, cash and cash equivalents, bank deposits and other financial assets. None of thefinancial instruments of the Company result in material concentration of credit risk.
Exposure to credit risk:The carrying amount of financial assets represents the maximum credit exposure. The maximumexposure to credit risk was Rs. 27,817,818, Rs. 40,489,031 and Rs. 34,623,992 as of March 31, 2017, March31, 2016 and April 01, 2015 respectively, being the total of the carrying amount of balances with tradereceivables.
· Trade receivables:Ind AS requires expected credit losses to be measured through a loss allowance. The Company assessesat each date of statements of financial position whether a financial asset or a group of financial assets isimpaired. Expected credit losses are measured at an amount equal to the 12 month expected creditlosses or at an amount equal to the life time expected credit losses if the credit risk on the financial assethas increased significantly since initial recognition. Trade receivables are typically unsecured and arederived from revenue earned from customers. Credit risk has always been managed by the group
Page No. 92
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
through credit approvals, establishing credit limits and continuously monitoring the creditworthinessof customers to which the company grants credit terms in the normal course of business.
b)Liquidity RiskLiquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective ofliquidity risk management is to maintain sufficient liquidity and ensure that funds are available for useas per requirements. The Company manages liquidity risk by maintaining adequate reserves, bankingfacilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows,and by matching the maturity profiles of financial assets and liabilities. Also parent company willprovide support in order to meet financial obligations of the Company.
The table below summarises the maturity profile of the Group’s financial liabilities based on contractualundiscounted payments.
Year endedon
DemandLess Than 3Months
3 to 12Months
1 to 5years > 5 Years Total
March 31, 2017 INR INR INR INR INR INRLong term borrowing -Term loan - 4,687,500 14,062,500 306,250,000 918,750,000 1,243,750,000Loan from holdingcompany - - - - 717,197,937 717,197,937
Trade and other payables 3,042,969 186,646,039 9,260,607 1,597,318 - 200,546,933Net employee definedbenefit liabilities - - 4,542,616 3,528,472 - 8,071,088
Other financial liabilities 14,487,759 - - - - 14,487,759
17,530,728 191,333,539 27,865,723 311,375,790 1,635,947,937 2,184,053,717
Year endedon
DemandLess Than 3
Months3 to 12
Months1 to 5years > 5 Years Total
March 31, 2016 INR INR INR INR INR INRLong term borrowing -Term loan - - 1,247,862,140 - - 1,247,862,140
Short term borrowings - - 42,400,000 - - 42,400,000Loan from holdingcompany - - - 602,197,937 - 602,197,937
Trade and other payables - 30,780,205 8,556,096 - - 39,336,301Net employee definedbenefit liabilities - - 3,779,698 3,214,455 - 6,994,153
Other financial liabilities 7,375,958 2,738,280 - 1,362,000 - 11,476,238
7,375,958 33,518,485 1,302,597,934 606,774,392 - 1,950,266,769
Page No. 93
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
c) Market RiskMarket risk is the risk that the fair value or future cash flows of a financial instrument will fluctuatebecause of changes in market prices. Such changes in the values of financial instruments may resultfrom changes in the foreign currency exchange rates, interest rates, credit, liquidity and other marketchanges. The Company’s exposure to market risk is primarily on account of foreign currency exchangerate risk.
d)Interest rate riskInterest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuatebecause of change in market interest rates. The company performs a comprehensive corporate interestrate management policy. The company is not exposed to significant interest rate risk as at the respectivereporting dates.
· Interest rate sensitivityThe following table demonstrates the sensitivity to a reasonably possible change in interest rates onthat portion of loans and borrowings affected. With all other variables held constant, theCompany’s profit before tax is affected through the impact on floating rate borrowings, as follows:
Particulars Increase in basispoints and Effect onProfit before tax
Decrease in basispoints and Effect onProfit before tax
March 31, 2017+50 -50
Long term Borrowing Term loan (6,305,551) 6,305,551Loan from holding company (1,818,377) 1,818,377
March 31, 2016 +50 -50
Long term Borrowing Term loan (6,486,739) 6,486,739Loan from holding company (2,365,832) 2,365,832
e) Foreign Currency exchange rate riskThe fluctuation in foreign currency exchange rates may have potential impact on the statement of profitand loss and other comprehensive income and equity, where any transaction references more than onecurrency or where assets / liabilities are denominated in a currency other than the functional currencyof the respective entities. The duty free business of the company is transacted in several currencies andconsequently the Company is exposed to foreign exchange risk through its sales in duty free outlet andpurchases from overseas suppliers in various foreign currencies.
Page No. 94
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
· Foreign currency sensitivityThe following tables demonstrate the sensitivity to a reasonably possible change in top five foreigncurrencies exchange rates, with all other variables held constant. The impact on the company’sprofit before tax is due to changes in the fair value of monetary assets and liabilities including non-designated foreign currency derivatives and embedded derivatives. The company’s exposure toforeign currency changes for all other currencies is not material.
March 31, 2017USD CHF EURO GBP SAR AED
Effect on Profit before tax,(1%) 166,561 (18,910) (6,362) (119,049) 1,629 1,682
Effect on Profit before tax(-1%) (166,561) 18,910 6,362 119,049 (1,629) (1,682)
· Details of unhedged foreign currency for duty free segment is shown below-
Particulars March 31, 2017Amount in foreign
currencyAmount in rupees
Trade payables USD 717,539CHF 44,225
EURO 10,520GBP 147,260
47,070,5542,867,094
728,94811,913,730
Bank balances (including credit card collection) USD 707,244 46,395,183Other Receivables USD 232,481
CHF 15,047EURO 746
15,250,753975,47651,717
Foreign currency on hand AED 9,526AUD 186CAD 160
CHF 7EURO 593
GBP 110HKD 28
JPY 17,042KWD 151
MYR 140NZD 8
OMR 244QAR 675
SAR 9,420SGD 381THB 367
USD 31,719
168,1739,1977,755
45441,0568,928
234 9,88432,1432,051
362 41,100
12,020162,89517,659
6912,080,766
Loans and advances USD 847 CHF 277 GBP 463
55,554 17,946
37,444
Page No. 95
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
37. Leases
The Company entered into cancellable lease agreement with GMR Hyderabad International AirportLimited. The Company has a right to sub lease as per the terms of the agreement.
Company as a lesseeLease payments accrued under cancellable operating leases amounting to Rs 25,135,089 (March 31 2016:Rs. 11,933,857) have been recognized as an expense in the statement of profit and loss.
Company as a lessorLease receipts accrued under cancellable operating leases amounting to Rs. 16,732,759 (March 31 2016:Rs. 4,312,598) have been recognized as rental income in the statement of profit and loss.
38. Capital Management
For the purpose of the Company's capital management, capital includes issued equity capital, and allother equity reserves attributable to the equity holders. The primary objective of the Company’s capitalmanagement is to maximize the shareholder value.
The Company manages its capital structure in consideration to the changes in economic conditions andthe requirements of the financial covenants. The Company monitors capital using a gearing ratio, whichis debt divided by total capital plus debt. The Company includes within debt, borrowings includinginterest accrued on borrowings. The Company’s policy is to keep the gearing ratio at an optimal level toensure that the debt related covenants are complied with.
March 31, 2017 March 31, 2016 April 01, 2015Borrowings including interest accrued onborrowings (Note 12A) 1,886,929,328 1,862,291,276 1,817,349,106
Debt 1,886,929,328 1,862,291,276 1,817,349,106
Equity 1,266,089,160 1,096,589,160 1,096,589,160Other Equity (1,434,899,703) (1,428,100,654) (1,234,618,402)Total Equity (168,810,543) (331,511,494) (138,029,242)
Gearing ratio (Debt/ Total Equity) (11.18) (5.62) (13.17)
In order to achieve this overall objective, the Company’s capital management, amongst other things,aims to ensure that it meets financial covenants attached to the interest-bearing loans and borrowingsthat define capital structure requirements. Breaches in meeting the financial covenants would permitthe bank to immediately call loans and borrowings. There have been no breaches in the financialcovenants of any interest-bearing loans and borrowing in the current year.
No changes were made in the objectives, policies or processes for managing capital during the yearended March 31, 2017.
Page No. 96
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
39. First time Adoption
These financial statements, for the year ended March 31, 2017, are the first the Company has preparedin accordance with Ind AS. For periods up to and including the year ended March 31, 2016, theCompany prepared its financial statements in accordance with accounting standards notified undersection 133 of the Companies Act 2013, read together with paragraph 7 of the Companies (Accounts)Rules, 2014 (Indian GAAP).
Accordingly, the Company has prepared financial statements which comply with Ind AS applicablefor periods ending on March 31, 2017, together with the comparative period data as at and for the yearended March 31, 2016, as described in the summary of significant accounting policies. In preparingthese financial statements, the company opening balance sheet was prepared as at April 01, 2015, thecompany date of transition to Ind AS. This note explains the principal adjustments made by thecompany in restating its Indian GAAP financial statements, including the balance sheet as at April01,2015 and the financial statements as at and for the year ended March 31, 2016.
Exemptions applieda) The Company has elected to regard carrying values for all of property, plant and equipment as
deemed cost at the date of the transition.
b) Ind AS 101 requires a first-time adopter to apply derecognition requirements in Ind AS 109prospectively to transactions occurring on or after the date of transition to Ind AS. Accordingly,the Company continues to de-recognise the financial assets and financial liabilities fortransactions which have occured before the date of transition to Ind AS.
EstimateThe estimates as at April 01, 2015 are consistent with those made for the same dates in accordance withIndian GAAP (after adjustments to reflect any differences in accounting policies) apart fromimpairment of financial assets based on expected credit loss model where application of Indian GAAPdid not require estimation. The estimates used by the Company to present these amounts inaccordance with Ind AS reflect conditions at April 01, 2015 (transition date), March 31, 2016 and March31, 2017.
40. Details of dues to micro and small enterprises as defined under the MSMED Act, 2006:
ParticularsMarch31, 2017
March31, 2016
April01, 2015
The principal amount and the interest due thereon remaining unpaid to anysupplier as at the end of each accounting year:
Principal amount due to micro and small enterprises; - - 507,095
Interest due on above. - - -
Total - - 507,095
The amount of interest paid by the buyer in terms of section 16 of theMSMED Act 2006 along with the amounts of the payment made to thesupplier beyond the appointed day during each accounting year.
- - -
Page No. 97
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
The amount of interest due and payable for the period of delay in makingpayment (which have been paid but beyond the appointed day during theyear) but without adding the interest specified under the MSMED Act, 2006
- - -
The amount of interest accrued and remaining unpaid at the end of eachaccounting year. - - -
The amount of further interest remaining due and payable even in thesucceeding years, until such date when the interest dues as above areactually paid to the small enterprise for the purpose of disallowance as adeductible expenditure under section 23 of the MSMED Act 2006.
- - -
41. Commitments and Contingencies
A. Contingent Liabilities:
a. Value Added Tax dispute of Rs. 3,556,853 (March 31, 2016: Rs.2,446,723; April 01, 2015:Rs.2,446,723).The Company in the year 2013 received notices of demand from commercial taxes department,levying Value Added Tax on leasing of Audio Video Equipment’s. The Company has replied tothe said department against the said notices of demand. Based on the internal assessment, themanagement is confident that no provision is required to be made in the financial statements.
b. Service Tax Dispute of Rs.448,004 (March 31,2016:Rs.Nil; April 01, 2015: Rs. Nil)During the current year, the company has received a show cause notice from the assistantcommissioner of service tax levying service tax on 100% value of Room retention charges asagainst the current practice of levying service tax discharged on 60% value. Based on an internalassessment, Management is confident that no liability in this regard would be payable and assuch no provision has been made in these financial statements.
c. Bank guarantees outstanding in respect of customs department Rs.7,400,000.
d. Entertainment tax dispute of Rs Nil ( March 31, 2016: Rs. Nil; April 01, 2015: Rs.149,249)
B. Commitments:a. Capital and other commitments as at March 31, 2017:Rs. 11,376,916 (March 31 2016: Rs.
5,591,492; April 1, 2015: Rs. Nil).
b. As per the terms of concession agreement with GMR Hyderabad International Airport Limited(GHIAL), the Company is required to pay concession fees in the range of 23.5%-35% on its netrevenue (as defined in the concession agreement) or the minimum guaranteed amount for aninitial term of 15 years starting from May 17, 2010.
c. For commitments relating to lease arrangements, please refer note 37.
Page No. 98
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
42. Specified Bank Notes(SBN) :During the year, the Company had specified bank notes or other denomination notes as defined in theMCA notification G.S.R. 308(E) dated March 31, 2017. The details of Specified Bank Notes (SBN) heldand transacted during the period from November 8, 2016 to December, 30 2016, denomination wiseSBNs and other notes as per the notification is given below:
Particulars SBNs* Other INRdenomination notes Total
Closing cash in hand as onNovember 8, 2016 3,594,500 277,081 3,871,581
(+) Permitted receipts - 26,830,936 26,830,936(-) Permitted payments - 1,439,492 1,439,492(-) Amount deposited in Banks 3,594,500 24,138,375 27,732,875Closing cash in hand as onDecember 30, 2016 - 1,530,150 1,530,150
* For the purposes of this clause, the term ‘Specified Bank Notes’ shall have the same meaning providedin the notification of the Government of India, in the Ministry of Finance, Department of EconomicAffairs number S.O. 3407(E), dated the November 08, 2016.
Page No. 99
GMR Hotels and Resorts LimitedCIN : U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
43 Reconciliation with previous GAAP:
A.1 Reconciliation of equity as previously reported under Previous GAAP (I GAAP) to Ind AS :
Previous GAAP Effect of transition toInd AS Ind AS Previous GAAP Effect of transition to Ind
AS Ind AS
ASSETSNon-current assetsProperty, Plant and Equipment 1,471,178,682 - 1,471,178,682 1,627,342,767 - 1,627,342,767Capital work-in-progress 11,573,077 - 11,573,077 2,388,267 - 2,388,267Other Intangible assets 790,886 - 790,886 - - -Financial Assets
Others 299,871 - 299,871 249,871 - 249,871Non-current tax assets 29,959,551 - 29,959,551 37,466,503 - 37,466,503
Other Non Current Assets (iv) 12,849,530 - 12,849,530 111,936 - 111,936
Deferred tax assets (net) (i) - - - - - -
Current assetsInventories 7,107,077 - 7,107,077 7,654,373 - 7,654,373Financial Assets
Investments (v) - - - - - - Trade receivables 40,489,031 - 40,489,031 34,623,992 - 34,623,992Cash and cash equivalents 2,892,195 - 2,892,195 5,169,437 - 5,169,437Other bank balances - - - - - -Others - - - 685,571 - 685,571Current tax assets 33,927 - 33,927 3,808,709 - 3,808,709
Other current assets 11,412,643 - 11,412,643 9,397,736 - 9,397,736Total Assets 1,588,586,470 - 1,588,586,470 1,728,899,162 - 1,728,899,162
EQUITY AND LIABILITIESShareholders' FundsEquity Share capital 1,096,589,160 - 1,096,589,160 1,096,589,160 - 1,096,589,160Share Capital Suspense - - - - - -Other Equity - -
Retained earnings (1,458,269,455) (13,369,849) (1,471,639,304) (1,291,929,373) 13,741,072 (1,278,188,301)
Other reserves (ii& iv) - 43,538,650 43,538,650 - 43,569,899 43,569,899
Total Equity (361,680,295) 30,168,801 (331,511,494) (195,340,213) 57,310,971 (138,029,242)
Non-current liabilitiesFinancial Liabilities
Borrowings (iv) 1,755,560,077 (30,168,801) 1,725,391,276 1,755,060,077 (57,310,971) 1,697,749,106Other financial liabilities - - - 900,000 - 900,000Others 1,362,000 - 1,362,000 2,481,740 - 2,481,740
Net Employee Defined benefit liabilities 3,214,455 - 3,214,455 - - - 1,760,136,532 (30,168,801) 1,729,967,731 1,758,441,817 (57,310,971) 1,701,130,846
March 31, 2016 April 01, 2015
Page No. 100
GMR Hotels and Resorts LimitedCIN : U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
Previous GAAP Effect of transition toInd AS Ind AS Previous GAAP Effect of transition to Ind
AS Ind AS
Current liabilitiesFinancial Liabilities
Borrowings 42,400,000 - 42,400,000 49,600,000 - 49,600,000Trade payables 39,336,297 - 39,336,297 35,022,530 - 35,022,530Other current financial liabilities 95,409,478 - 95,409,478 70,908,154 - 70,908,154
Net employee defined benefit liabilities 3,779,698 - 3,779,698 2,577,727 - 2,577,727Other current liabilities 9,204,760 - 9,204,760 7,689,147 - 7,689,147
190,130,233 - 190,130,233 165,797,558 - 165,797,558Total Equity and Liabilities 1,950,266,765 (30,168,801) 1,920,097,964 1,924,239,375 (57,310,971) 1,866,928,404
1,588,586,470 - 1,588,586,470 1,728,899,162 - 1,728,899,162 - - - - - -
B.1
Previous GAAP Effect of transition toInd AS Ind AS
IncomeRevenue from operations (net) 568,717,570 - 568,717,570Other income 3,090,742 - 3,090,742 Finance IncomeTotal revenue (i) 571,808,312 - 571,808,312
ExpensesCost of materials consumed 59,738,002 - 59,738,002Employee benefits expense (ii) 95,434,473 (31,249) 95,403,224Depreciation and amortization expense 163,513,617 - 163,513,617Finance costs 194,408,274 27,142,170 221,550,444Other expenses 225,054,028 - 225,054,028Total Expense (ii) 738,148,394 27,110,921 765,259,315
Proift /(Loss) before tax from continuingoperations
(166,340,082) (27,110,921) (193,451,003)
Tax expensesa) Current income tax - - -b) Adjustment of tax relating to earlier periods - - -c) Deferred tax income - - -
Total Income tax expenses - - -Profit for the year (166,340,082) (27,110,921) (193,451,003)
Reconciliation of Statement of Profit and Loss as previously reported under Previous GAAP (IGAAP) to Ind AS :
For the year ended March 31, 2016
March 31, 2016 April 01, 2015
Page No. 101
GMR Hotels and Resorts LimitedCIN : U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
Other Comprehensive Income (ii)Other comprehensive income not to bereclassified to profit or loss in subsequentperiods:Re-measurement gains (losses) on defined benefitplans (iii)
- (31,249) (31,249)
Income tax effect - -Other comprehensive income for the year, netof tax
- (31,249) (31,249)
Total Comprehensive Income For The Year, NetOf Tax
(166,340,082) (27,142,170) (193,482,252)
C. Notes to reconciliation of equity as at April 01, 2015 and March 31, 2016 and profit or loss for the year ended March 31, 2016.
(i) Deferred Tax Assets
(ii) Other comprehensive income
(iii) Remeasure of actuarial gains/ (losses):
(iv) Borrowings
(v) Investments
(vi) Statement of cash flowsThe transition from Indian GAAP to Ind AS has not had a material impact on the statement of cash flows.
Indian GAAP requires deferred tax accounting using the income statement approach, which focuses on differences between taxable profits and accounting profits for the period. Ind AS 12 requiresaccounting for deferred taxes using the Balance sheet approach, which focuses on temporary difference between the carrying amount of an asset or liability in the Balance Sheet and its tax base. Theapplication of Ind AS 12 approach has resulted in recognition of deferred tax on new temporary differences which was not required under Indian GAAP. In addition, the various transitionaladjustments lead to temporary differences and the Company has accounted for such differences. Deferred tax adjustment are recognised in correlation to the underlying transaction either inretained earnings or a separate component in equity.
Under Indian GAAP, the Company has not presented other comprehensive income separately. Hence, it has reconciled Indian GAAP profit or loss to profit or profit or loss as per Ind AS. Further,Indian GAAP profit or loss is reconciled to total comprehensive income as per Ind AS.
Both under Indian GAAP and Ind AS, the Company recognised costs related to its post-employment defined benefit plan on an actuarial basis. Under Indian GAAP, the entire cost, includingactuarial gains and losses, are charged to profit or loss. Under Ind AS, remeasurements comprising of actuarial gains and losses are recognised immediately in the balance sheet with acorresponding debit or credit to retained earnings through OCI.
Under Indian GAAP, Under Indian GAAP, interest free borrowings were accounted at their respective nominal values. As per Ind AS-109, all financial instruments shall be measured at theirrespective fair values and hence the interest free borrowings are accounted at their respective fair values based on fair value measurement methods using significant observable inputs and thebalance has been accounted as additional equity contribution under Other Reserves.Also transaction costs incurred in connection with borrowings are amortised over the period under Indian GAAP. However, as per Ind AS 109, transaction costs (origination fees paid on financialliabilities) are considered as an integral part of the effective interest rate of the financial liabilty. Accordingly, the Company has adjusted unamortised processing fee paid towards the outstandingborrowings under financial laibilities.
Indian GAAP requires the value of investments held by the company to be measured at lower of cost or fair value of such investments. As per Ind AS-109, all financial instruments shall bemeasured at their respective fair values and hence the investments in the balance sheet are recognized at fair value and accordingly the gain / loss arising on account of fair valuation is routedthrough the statement of profit and loss.
Page No. 102
GMR Hotels and Resorts LimitedCIN: U52100TG2008PLC060866Notes to the financial statements for the year ended March 31, 2017(All amounts in Indian Rupees, unless otherwise stated)
As per our report of even date
For S.R.BATLIBOI & ASSOCIATES LLP For and on behalf of the Board of Directors ofICAI Firm registration number: 101049W/ E300004 GMR Hotels and Resorts LimitedChartered Accountants
per Shankar Srinivasan SGK Kishore Rajesh Kumar Arora Partner Director Director
Membership No: 213271 DIN: 02916539 DIN: 03174536
Place: Hyderabad Date: May 02, 2017
Himansu Sekhar Samal C.Bharathi Chief Financial Officer Company Secretary
MembershipNo.:ACS30329
Place: HyderabadDate: May 02, 2017
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