2. PERFORMANCE OF THE COMPANY

104

fortune park hotels limited

REPORT OF THE DIRECTORS FOR THE FINANCIAL YEAR ENDED 31ST MARCH, 20161. Your Board of Directors (‘the Board’) hereby submits their Report for the

financial year ended 31st March, 2016.

2. PERFORMANCE OF THE COMPANY

During the year, your Company recorded an operating income of ` 2668 lakhs (previous year - ` 2524 lakhs) registering a growth of 6%. The other income of the Company was ` 223 lakhs (previous year – ` 196 lakhs) also registering a growth of 14%. All investment decisions in deployment of surplus funds continue to be guided by the tenets of Safety, Liquidity and Return. Pre-tax profit registered a growth of 6% while Post-tax profit at ` 623 lakhs registered a growth of 8%.

The financial results of your Company, summarised, are as under:

For the year ended For the year ended 31st March, 2016 31st March, 2015 (`) (`)

a. Profit Before Tax 9,22,43,965 8,70,29,889

b. Tax Expenses 2,99,58,119 2,96,22,024

c. Profit After Tax 6,22,85,846 5,74,07,865

d. Add : Profit brought forward from previous years 28,45,39,831 23,96,22,535

e. Surplus available for appropriation 34,68,25,677 29,70,30,400

Less: – Transfer to General Reserve – 57,40,787

– Interim Dividend Paid 10,03,51,784 – (recommended as Final Dividend)

Proposed Dividend – 56,25,100

– Dividend Distribution Tax 2,04,29,265 11,24,682

f. Balance carried forward to the following years 22,60,44,628 28,45,39,831

3. DIVIDEND

Interim dividend of ` 223 per Equity Share having nominal value of ` 10/- per Share aggregating ̀ 10,03,51,784/-, was declared by your Directors on 23rd December, 2015, in proportion to the amount paid-up on each Equity Share, out of the profits of the Company for payment to the Members whose names appeared on the Register of Members on the said date; the said Interim Dividend has been recommended by your Directors as Final Dividend for the financial year ended 31st March, 2016.

4. OPERATIONAL PERFORMANCE

The Company’s Fortune hotel chain that caters to the ‘upscale to mid-market’ segment now has 75 hotels with an aggregate inventory of nearly 6000 rooms in its fold. The `Fortune’ brand including “My Fortune” now has 48 operating hotels and another 5 hotels are slated to be commissioned in 2016-17. The remaining 22 hotel projects are under various stages of development. The brand remains a front runner in its operating segment and is well positioned to sustain its leadership position in the industry.

Your Company is well known for providing quality products and services which have helped position `Fortune’ as the premier `value’ brand in the Indian hospitality sector.

During the year, the company bagged the PATWA International Award for the ‘Best First Class Full Service Business Hotel Chain in India’, 2016, Today's Traveller Award 2015 for the 'Best First Class Business Hotel Chain', Safari India Award for the 'Best First Class Business Hotel Chain 2015', Hospitality India Award 2015 for the 'Best First Class Business Hotel Chain’and ‘Best Hospitality Group’ at the 9th edition of the CNBC – Awaaz Travel Awards 2015.

5. DIRECTORS AND KEY MANAGERIAL PERSONNEL

(a) Changes in Directors

During the year under review, Mr. Arun Pathak (DIN 00502850) had resigned as the director of the Company effective 22nd March, 2016. The Board would like to place on record its appreciation for the services rendered by him as the director of the Company.

Mr. Jagdish Singh (DIN 00042258) was appointed as an additional director of the Company effective 21st March, 2016. By virtue of the provisions of Article 130 of the Articles of Association of your Company and Section 161 of the Companies Act, 2013 (‘the Act’), Mr. Singh will vacate office at the ensuing Annual General Meeting (AGM) of your Company. Notice under Section 160 of the Act has been received for the appointment of Mr. Singh who has filed his consent to act as a Director of the Company, if appointed.

Your Board at its meeting held on 16th April, 2016 has recommended for the approval of the Members, appointment of Mr. Singh as a Non – Executive Director of the Company liable to retire by rotation.

Appropriate resolution seeking your approval to the aforesaid appointment is appearing in the Notice of the ensuing AGM.

(b) Retirement by rotation

In accordance with the provisions of Section 152(6) of the Act and Articles 143 and 144 of the Articles of Association of the Company, Mr. Suresh Kumar (DIN 02741371), Director, will retire by rotation at the ensuing AGM of the Company and, being eligible, offers himself for re-appointment. Your Board has recommended his re-appointment.

6. BOARD AND BOARD COMMITTEES

The two Board Committees of the Company and their present composition is as follows:

Corporate Social Responsibility New Alliance Approval Committee Committee Mr. N.Anand (Chairman) Mr. S. Kumar Mr. S. Kumar Mr. J. Singh Mr. J. Singh

During the year ended 31st March 2016, the following meetings of the Board and Board Committees were held:

Board / Board Committee Number of meetings held

during the year

Date of meetings

Board 5 13th April, 20156th May, 20154th September, 201523rd December, 201521st March, 2016

Corporate Social Responsibility Committee

1 21st March, 2016

New Alliance Approval Committee

12 27th April, 201516th June, 201530th July, 20153rd August, 201515th September, 20151st October, 201525th October, 201515th December, 201522nd December, 201517th February, 201622nd March, 201630th March, 2016

The attendance of the Directors of the Company at the Board and Board Committee meetings held during the year is given below:

SI. No.

Name of the Director /

Committee Member

Number of meetings attended

Board Corporate Social Responsibility

Committee

New Alliance Approval

Committee

1. Mr. N. Anand 5 1 N.A.

2. Mr. A. Pathak* 5 N.A. 10

3. Mr. S. Kumar 5 1 12

4. Mr. J. Singh** 1 1 2

* Ceased to be a Director w.e.f. 22nd March, 2016** Appointed as an Additional Director w.e.f. 21st March, 2016

7. DIRECTORS’ RESPONSIBILITY STATEMENT

As required under Section 134(5) of the Act, your Directors confirm having:

i) followed in the preparation of the Annual Accounts, the applicable Accounting Standards with proper explanation relating to material departures, if any;

ii) selected such accounting policies and applied them consistently and made judgements and estimates that are reasonable and prudent so as to give a true and fair view of the state of affairs of the Company at the end of the financial year and of the profit of the Company for that period;

iii) taken proper and sufficient care for the maintenance of adequate accounting records in accordance with the provisions of the Act for safeguarding the assets of your Company and for preventing and detecting fraud and other irregularities;

iv) prepared the annual accounts on a going concern basis; and

v) devised proper systems to ensure compliance with the provisions of all applicable laws and that such systems are adequate and operating effectively.

8. SUBSIDIARIES, ASSOCIATES AND JOINT VENTURES

The Company does not have any subsidiary, associate or joint venture.

9. PARTICULARS OF EMPLOYEE

The particulars of employee in terms of Rule 5(2) of the Companies

105


(Appointment and Remuneration of Managerial Personnel) Rules, 2014, are as detailed below:

Name Age Designation Gross Remuneration

(`)

Qualification Experience (Years)

Date of Joining

Previous Employment / Position held

Suresh Kumar 58 Managing Director

64,33,114/- B.Sc. 37 02/02/2015 –

Your Company continues to attract and retain talent of the highest quality. Your Directors place on record their sincere appreciation of the efforts made and the support rendered by the employees of the Company. The Company provides a gender friendly workplace and no case of sexual harassment was reported during the year.

10. RISK MANAGEMENT

The Company’s risk management framework, designed to bring robustness to the risk management processes in the Company, addresses risks intrinsic to operations, financials and compliances arising out of the overall strategy of the Company.

Management of risks vests with the executive management which is responsible for the day-to-day conduct of the affairs of the Company. The Internal Audit Department of ITC Limited periodically carries out, at the request of the Company, risk focused audits with the objective of identifying areas where risk management processes could be strengthened. As required under the Risk Management Policy of the Company, a Risk Mitigation Report back was prepared on half-yearly basis and reviewed by the Fortune Management Committee. Further, an annual update was provided to the Board on the effectiveness of the Company’s risk management systems and policies. The Board expressed satisfaction with the implementation of the risk mitigation strategies adopted by the Company against various risks.

11. INTERNAL FINANCIAL CONTROLS There are adequate internal financial controls in your Company with

respect to the financial statements, commensurate with the size and scale of the operations of the Company. The Board which provides guidance on internal controls, also reviews internal audit findings and implementation of internal audit recommendations.

During the year, the internal financial controls in the Company with respect to the financial statements were tested and no material weakness in the design or operation of such controls was observed. Nonetheless your Company recognises that any internal financial control framework, no matter how well designed, has inherent limitations and accordingly, regular audit and review processes ensure that such systems are reinforced on an ongoing basis.

12. PARTICULARS OF LOANS, GUARANTEES AND INVESTMENTS

During the year ended 31st March, 2016, the Company has neither given any loan or guarantee nor has made any investment under Section 186 of the Act.

13. RELATED PARTY TRANSACTIONS

During the year ended 31st March, 2016, the Company has not entered

into any contract or arrangement with its related parties which is not on arm’s length basis.

14. CORPORATE SOCIAL RESPONSIBILITY (CSR)

The Annual Report on CSR activities of the Company in terms of Section 135 of the Act read with the Companies (Corporate Social Responsibility Policy) Rules, 2014 is enclosed as Annexure 1 to this Report.

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

During the year under review, no significant or material orders were passed by the Regulators / Courts / Tribunals impacting the going concern status of the Company and its future operations.

16. EXTRACT OF ANNUAL RETURN

The extract of Annual Return in the prescribed Form No. MGT-9 is enclosed as Annexure 2 to this Report.

17. AUDITORS

The Company’s Statutory Auditors, Messrs Price Waterhouse Chartered Accountants LLP (PWCA), Chartered Accountants were appointed with your approval at the Nineteenth AGM to hold such office till the conclusion of the Twenty Fourth AGM. Your Board, in terms of Section 139 of the Act, has recommended for the ratification of the Members the appointment of PWCA from the conclusion of the ensuing AGM till the conclusion of the Twenty-Second AGM. The Board, in terms of Section 142 of the Act, has also recommended for the approval of the Members the remuneration of PWCA for the financial year 2016-17. Appropriate resolution in respect of the above is appearing in the Notice convening the ensuing AGM of the Company.

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

Conservation of Energy:

Steps taken on conservation of energy and impact thereof: NIL

Steps taken by the Company for utilizing alternate sources of energy: NIL

Capital investment on energy conservation equipment: NIL

Technology Absorption:

Efforts, in brief, made towards technology absorption and benefits derived as a result of the above efforts, e.g. product improvement, cost reduction, product development, import substitution, etc : NIL

The Company neither imported any technology during the year nor incurred any expenditure on research and development.

Foreign Exchange Earnings and Outgo:

During the year there were no foreign exchange earnings (previous year – Nil) but there was a foreign exchange outflow of `18 lakhs (previous year ` 27 lakhs).

On behalf of the Board

Dated : 16th April, 2016 Jagdish Singh DirectorPlace : New Delhi Suresh Kumar Managing Director

Annexure 1 to the Report of the Board of DirectorsAnnual Report on CSR Activities of the Company for the financial year ended 31st March, 2016

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

1. A brief outline of the Company’s CSR Policy including overview of projects or programs proposed to be undertaken

The Company, a wholly owned subsidiary of ITC Limited (ITC), discharges its corporate social responsibilities (CSR) by aligning itself with the CSR Policy of ITC.The Company undertakes its CSR activities: l as listed in Schedule VII to the Companies Act, 2013, in line with the CSR initiatives of

ITC and as approved by the CSR Committee of the Company.l directly or through a registered trust or a registered society or a company established

under Section 8 of the Companies Act, 2013.The Company may collaborate with ITC or other companies for undertaking CSR activities.

2.

Composition of CSR Committee Mr. Nakul Anand (Chairman)Mr. Suresh KumarMr. Jagdish Singh

3. Average net profit of the Company for last three financial years ` 8,73,68,150/-4. Prescribed CSR expenditure (two percent of the amount stated under 3 above) ` 17,47,363/-5. Details of CSR spent during

the financial year:a) Total amount to be spent for the financial year ` 17,48,000/-

b) Amount unspent, if any Nil

c) Manner in which the amount spent during the financial year is detailed below:

Sl. No.

CSR Project or activity identified

Sector in which the project is covered

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

where projects or programs were undertaken

Amount outlay (Budget) project or program wise

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

projects or programs2. Overheads

Cumulative expenditure upto the reporting period

Amount spent:Direct or through implementing agency

1. Contribution to ITC Rural Development Trust

Undertaking rural development projects [covered under Clause (x) of Schedule VII to the Companies Act, 2013]

N.A. `17,48,000 `17,48,000 `17,48,000 Implementing Agency - ITC Rural Development Trust, Kolkata

The CSR Committee of the Board has confirmed that the implementation and monitoring of the CSR Policy is in compliance with the CSR objectives and Policy of the Company.

Dated : 16th April, 2016 Nakul Anand Suresh Kumar Jagdish SinghPlace : New Delhi Chairman - CSR Committee Managing Director Director

106


Annexure 2 to the Report of the Board of DirectorsFORM NO. MGT-9

EXTRACT OF ANNUAL RETURNas on the financial year ended on 31st March, 2016

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

I. REGISTRATION AND OTHER DETAILS

i) CIN : U55101HR1995PLC052281ii) Registration Date : 26th July 1995iii) Name of the Company : Fortune Park Hotels Limitediv) Category / Sub-Category of the Company : Unlisted Public Company limited by sharesv) Address of the Registered office and contact details : ITC Green Centre

10, Institutional AreaSector 32, Gurgaon -122001Phone: 0124 4171717Fax: 01244051734e-mail ID : [email protected]

vi) Whether listed company (Yes / No) : Novii) Name, Address and Contact details of Registrar and Transfer Agent, if any : N.A.

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:-

Sl. No.

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

1. Hotel services 55101 92%

III. PARTICULARS OF HOLDING, SUBSIDIARY AND ASSOCIATE COMPANIES

Sl. No.

Name and Address of the Company

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

1. ITC LimitedVirginia House37 Jawaharlal Nehru RoadKolkata – 700 071

L16005WB1910PLC001985 Holding company 100.00% 2(46)

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

(i) Category-wise Shareholding:

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

% Change during the

yearDemat Physical Total % of Total

SharesDemat Physical Total % of Total

SharesA. Promoters (1) Indian

a) Individual/HUF b) Central Govt.c) State Govt.(s) d) Bodies Corp. e) Banks / FI f) Any Other

––––––

–––

4,50,008––

–––

4,50,008––

–––

100.00––

––––––

–––

4,50,008––

–––

4,50,008––

–––

100.00––

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

NilN.A.N.A.

Sub-total (A)(1) – 4,50,008 4,50,008 100.00 – 4,50,008 4,50,008 100.00 Nil(2) Foreign

a) NRIs - Individuals b) Other – Individuals c) Bodies Corp. d) Banks / FI e) Any Other

–––––

–––––

–––––

–––––

–––––

–––––

–––––

–––––

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

Sub-total (A)(2) – – – – – – – – N.A.Total shareholding of Promoter (A) = (A)(1)+(A)(2) – 4,50,008 4,50,008 100.00 – 4,50,008 4,50,008 100.00 NilB. Public Shareholding 1. Institutions

a) Mutual Funds b) Banks / FI c) Central Govt.d) State Govt.(s) e) Venture Capital Funds f) Insurance Companies g) FIIsh) Foreign Venture Capital Funds i) Others (specify)

–––––––––

–––––––––

–––––––––

–––––––––

–––––––––

–––––––––

–––––––––

–––––––––

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

Sub-total (B)(1): – – – – – – – – N.A.2. Non-Institutions

a) Bodies Corp.i) Indian ii) Overseas

b) Individuals i) Individual shareholders holding nominal

share capital upto ` 1 lakh ii) Individual shareholders holding nominal

share capital in excess of ` 1 lakh

c) Others (specify)

–––

–

–––

–

–––

–

–––

–

–

–––

–

–––

–

–––

–

–––

–

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

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

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

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

107


(ii) Shareholding of Promoters:

Sl. No.

Shareholder’s Name

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

% change in shareholding

during the yearNo. of Shares% of total Shares of

the Company

% of Shares pledged /

encumbered to total Shares

No. of Shares% of total Shares of the Company

% of Shares pledged /

encumbered to total Shares

1. ITC Limited 4,50,008 100.00 Nil 4,50,008 100.00 Nil Nil

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

Sl. No.

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

No. of Shares % of total Shares of the Company

No. of Shares % of total Shares of the Company

At the beginning of the year

No change during the yearDate wise Increase / Decrease in Promoters Shareholding during the year

At the end of the year

(iv) Shareholding Pattern of top ten Shareholders (other than Directors, Promoters and Holders of GDRs and ADRs): NOT APPLICABLE(v) Shareholding of Directors and Key Managerial Personnel: None of the Directors and Key Managerial Personnel hold any share in the Company in their individual capacity.

V. INDEBTEDNESS

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

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

Sl. No. Particulars of Remuneration

Suresh Kumar(Managing Director)

(refer Note 1)

1. Gross salary

(a) Salary as per provisions contained in Section 17(1) of the Income-tax Act, 1961 51,89,362

(b) Value of perquisites under Section 17(2) of the Income-tax Act, 1961 9,06,924

(c) Profits in lieu of salary under Section 17(3) of the Income-tax Act, 1961 –

2. Stock Option –

3. Sweat Equity –

4. Commission - as % of profit- others, specify

–

5. Others, please specify –

Total Amount (A) 60,96,286

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

Note 1 : Mr. Suresh Kumar is on deputation from ITC Limited (ITC). Mr. Kumar has been granted Stock Options by ITC at ‘market price’ [within the meaning of the SEBI (Share Based Employee Benefits) Regulations, 2014] under the ITC Employee Stock Option Schemes.

Note 2 : Ceiling as per Part II of Schedule V to the Companies Act, 2013 has been disclosed, considering that the profits of the Company for the financial year ended 31st March, 2016 are inadequate.

B. Remuneration to other Directors: (Amount in `)

Sl. No. Name of Directors

Particulars of Remuneration Total Amount

Fee for attending Board and Board Committee meetings

Commission

1. Other Non - Executive Directors

N. Anand Nil Nil Nil

J. Singh

Total Amount (B) Nil

Total Managerial Remuneration (A+B) 60,96,286

Overall ceiling as per the Companies Act, 2013 84,00,000 per annum

(refer Note)

Note: Ceiling as per Part II of Schedule V to the Companies Act, 2013 has been disclosed, considering that the profits of the Company for the financial year ended 31st March, 2016 are inadequate.

C. Remuneration to Key Managerial Personnel other than MD/Manager/WTD: NOT APPLICABLE

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

On behalf of the Board

Dated : 16th April, 2016 Jagdish Singh Director

Place : New Delhi Suresh Kumar Managing Director

108


INDEPENDENT AUDITORS’ REPORT

TO THE MEMBERS OF FORTUNE PARK HOTELS LIMITED

Report on the Financial Statements

1. We have audited the accompanying financial statements of Fortune Park Hotels Limited (“the Company”), which comprise the Balance Sheet as at March 31, 2016, the Statement of Profit and Loss, the Cash Flow Statement for the year then ended, and a summary of the significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

2. 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 financial statements to give a true and fair view of the financial position, financial performance and cash flows of the Company in accordance with the accounting principles generally accepted in India, including the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. This responsibility also 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 design, implementation and maintenance of adequate internal financial controls, that were operating effectively for ensuring the accuracy and completeness of the accounting records, relevant to the preparation and presentation of the financial statements that give a true and fair view and are free from material misstatement, whether due to fraud or error.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on these financial statements based on our audit.

4. We have taken into account the provisions of the Act and the Rules made thereunder including the accounting standards and matters which are required to be included in the audit report.

5. We conducted our audit in accordance with the Standards on Auditing specified under Section 143(10) of the Act and other applicable authoritative pronouncements issued by the Institute of Chartered Accountants of India. Those Standards and pronouncements require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

6. An audit involves performing procedures to obtain audit evidence about the amounts and the disclosures in the financial statements. The procedures selected depend on the auditors’ judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal financial control relevant to the Company’s preparation of the financial statements that give a true and fair view, in order to design audit procedures that are appropriate in the circumstances. An audit also includes evaluating the appropriateness of the 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 financial statements.

7. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the financial statements.

Opinion

8. In our opinion and to the best of our information and according to the explanations given to us, the aforesaid 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, 2016, and its profit and its cash flows for the year ended on that date.

Report on Other Legal and Regulatory Requirements

9. As required by ‘the Companies (Auditors’ Report) Order, 2016’, issued by the Central Government of India in terms of sub-section (11) of section 143 of the Act (hereinafter referred to as the “Order”), and on the basis of such checks of the books and records of the Company as we considered appropriate and according to the information and explanations given to us, we give in the Annexure B a statement on the matters specified in paragraphs 3 and 4 of the Order.

10 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 purposes 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, the Statement of Profit and Loss, and the Cash Flow Statement dealt with by this Report are in agreement with the books of account.

(d) In our opinion, the aforesaid financial statements comply with the Accounting Standards specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014.

(e) On the basis of the written representations received from the directors as on March 31, 2016 taken on record by the Board of Directors, none of the directors is disqualified as on March 31, 2016 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 A.

(g) With respect to the other matters to be included in the Auditors’ Report in accordance with Rule 11 of the Companies (Audit and Auditors) Rules, 2014, in our opinion and to the best of our knowledge and belief and according to the information and explanations given to us:

i. The Company has disclosed the impact of pending litigations as at March 31, 2016 on its financial position in its financial statements – Refer Note 19;

ii. The Company has long-term contracts but no derivative contracts as at March 31, 2016 for which there were no material foreseeable losses.

iii. There were no amounts which were required to be transferred to the Investor Education and Protection Fund by the Company during the year ended March 31, 2016.

For Price Waterhouse Chartered Accountants LLP

Firm Registration Number: 012754N/N500016

Chartered Accountants

Ashok Narayanaswamy

Place : Gurgaon Partner

Date : April 16, 2016 Membership Number : 095665

Referred to in paragraph 10(f) of the Independent Auditors’ Report of even date to the members of Fortune Park Hotels Limited on the financial statements for the year ended March 31, 2016

Report on the Internal Financial Controls under Clause (i) of Sub-section 3 of Section 143 of the Act

1. We have audited the internal financial controls over financial reporting of Fortune Park Hotels Limited (“the Company”) as of March 31, 2016 in conjunction with our audit of the financial statements of the Company for the year ended on that date.

Management’s Responsibility for Internal Financial Controls

2. 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 (ICAI). 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 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 Act.

Auditors’ Responsibility

3. Our responsibility is to express an opinion on the Company’s

Annexure A to Independent Auditors’ Report

109


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 deemed to be prescribed under section 143(10) of the Act 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 ICAI. 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.

4. 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 financial statements, whether due to fraud or error.

5. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion on the Company’s internal financial controls system over financial reporting.

Meaning of Internal Financial Controls Over Financial Reporting

6. 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 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 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 financial statements.

Inherent Limitations of Internal Financial Controls Over Financial Reporting7. 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.

Opinion8. 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, 2016, 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 Price Waterhouse Chartered Accountants LLPFirm Registration Number: 012754N/N500016

Chartered AccountantsAshok Narayanaswamy

Place: Gurgaon Partner

Date: April 16, 2016 Membership Number 095665

Referred to in paragraph 9 of the Independent Auditors’ Report of even date to the members of Fortune Park Hotels Limited on the financial statements as of and for the year ended March 31, 2016.

i. (a) The Company is maintaining proper records showing full particulars, including quantitative details and situation, of fixed assets.

(b) The fixed assets of the Company have been physically verified by the Management during the year and no material discrepancies have been noticed on such verification. In our opinion, the frequency of verification is reasonable.

(c) The Company does not own any immovable properties as disclosed in Note 9 to the financial statements. Therefore, the provisions of Clause 3(i)(c) of the said Order are not applicable to the Company.

ii. The Company is in the business of rendering services, and consequently, does not hold any inventory. Therefore, the provisions of Clause 3(ii) of the said Order are not applicable to the Company.

iii. 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 Act. Therefore, the provisions of Clause 3(iii), (iii)(a), (iii)(b) and (iii)(c) of the said Order are not applicable to the Company.

iv. The Company has not granted any loans or made any investments, or provided any guarantees or security to the parties covered under Section 185 and 186. Therefore, the provisions of Clause 3(iv) of the said Order are not applicable to the Company.

v. The Company has not accepted any deposits from the public within the meaning of Sections 73, 74, 75 and 76 of the Act and the rules framed there under to the extent notified.

vi. The Central Government of India has not specified the maintenance of cost records under sub-section (1) of Section 148 of the Act for any of the products of the Company.

vii. (a) According to the information and explanations given to us and the records of the Company examined by us, in our opinion, the Company is regular in depositing the undisputed statutory dues, including provident fund, employees’ state insurance, income tax, sales tax, service tax, duty of customs, duty of excise, value

Annexure B to Independent Auditors’ Report

added tax and other material statutory dues, as applicable, with the appropriate authorities.

(b) According to the information and explanations given to us and the records of the Company examined by us, there are no dues of sales-tax, duty of customs, duty of excise or value added tax which have not been deposited on account of any dispute. The particulars of dues of income tax and service tax as at March 31, 2016 which have not been deposited on account of a dispute, are as follows:

Name of the statute

Nature of dues

Amount(`)

Period to which the amount relates

Forum where the dispute is pending

Finance Act, 1994

Demand under section 73(1)(a) of The Finance Act, 1994

4,570,992 2003-04 to 18-04-2006

Customs, Excise and Service Tax Appellate Tribunal

Income Tax Act, 1961

Demand u/s 156 of Income Tax Act, 1961

1,729,041 Assessment Year 2001-02

Income Tax Appellate Tribunal

Income Tax Act, 1961

Demand u/s 143(3) of Income Tax Act, 1961

6,757,173 Assessment Year 2012-13

Commissioner of Income Tax (Appeals)

viii. As the Company does not have any loans or borrowings from any financial institution or bank or Government, nor has it issued any debentures as at the balance sheet date, the provisions of Clause 3(viii) of the Order are not applicable to the Company.

ix. The Company has not raised any moneys by way of initial public offer, further public offer (including debt instruments) and term loans. Accordingly, the provisions of Clause 3(ix) of the Order are not applicable to the Company.

x. During the course of our examination of the books and records of the Company, carried out in accordance with the generally accepted auditing practices in India, and according to the

110


information and explanations given to us, we have neither come across any instance of material fraud by the Company or on the Company by its officers or employees, noticed or reported during the year, nor have we been informed of any such case by the Management.

xi. Except for managerial remuneration aggregating to ` 375,846, the managerial remuneration paid for by the Company is in accordance with the requisite approvals as mandated by the provisions of Section 197 read with Schedule V to the Act. The Company intends to obtain approval from the shareholders by special resolution in the ensuing Annual General Meeting of the Company for the excess remuneration paid.

xii. As the Company is not a Nidhi Company and the Nidhi Rules, 2014 are not applicable to it, the provisions of Clause 3(xii) of the Order are not applicable to the Company.

xiii. The Company has entered into transactions with related parties in compliance with the provisions of Section 188 of the Act. The details of such related party transactions have been disclosed in the financial statements as required under Accounting Standard (AS) 18, Related Party Disclosures specified under Section 133 of the Act, read with Rule 7 of the Companies (Accounts) Rules, 2014. Further, the Company is not required to constitute an

Audit Committee under Section 177 of the Act, and accordingly, to this extent, the provisions of Clause 3(xiii) of the Order are not applicable to the Company.

xiv. The Company has not made any preferential allotment or private placement of shares or fully or partly convertible debentures during the year under audit. Accordingly, the provisions of Clause 3(xiv) of the Order are not applicable to the Company.

xv. The Company has not entered into any non-cash transactions with its directors or persons connected with him. Accordingly, the provisions of Clause 3(xv) of the Order are not applicable to the Company.

xvi. The Company is not required to be registered under Section 45-IA of the Reserve Bank of India Act, 1934. Accordingly, the provisions of Clause 3(xvi) of the Order are not applicable to the Company.

For Price Waterhouse Chartered Accountants LLPFirm Registration Number: 012754N/N500016

Chartered AccountantsAshok Narayanaswamy

Place: Gurgaon Partner

Date: April 16, 2016 Membership Number 095665

BALANCE SHEET(all amounts in rupees unless otherwise stated) As at As at Note March 31, 2016 March 31, 2015 (`) (`) (`) (`)Equity and Liabilities Shareholders’ funds

Share capital 2 4,500,080 4,500,080 Reserves and surplus 3 262,792,627 267,292,707 321,287,830 325,787,910

Non - current liabilities Other long - term liabilities 4 21,186,886 16,816,886 Long - term provisions 5 17,834,368 39,021,254 31,244,097 48,060,983

Current liabilities Trade payables A) Total outstanding dues of micro enterprises and small scale enterprises 6 – – B) Total outstanding dues of creditors other than micro enterprises and small scale enterprises 6 11,654,985 7,538,138

Other current liabilities 7 33,993,005 19,638,537 Short - term provisions 8 7,313,431 52,961,421 17,325,698 44,502,373

Total 359,275,382 418,351,266

AssetsNon - current assetsFixed assets Tangible assets 9 3,460,878 2,987,239 Intangible assets 10 – 3,460,878 – 2,987,239 Deferred tax assets (net) 11 20,931,177 19,681,612 Long - term loans and advances 12 25,460,485 22,885,527 Other non - current assets 13 – 40,078,904

Current assets Current investments 14 91,914,032 155,952,200Trade receivables 15 112,313,082 102,619,990 Cash and bank balances 16 72,158,581 39,260,471 Short - term loans and advances 17 1,777,225 1,150,570 Other current assets 18 31,259,922 309,422,842 33,734,753 332,717,984

Total 359,275,382 418,351,266

Significant accounting policies 1

The accompanying notes are an integral part of these financial statements.

This is the Balance Sheet referred to in our report of even date.

For Price Waterhouse Chartered Accountants LLP On behalf of the Board of Directors

Registration No. : 012754N/N500016 Ashok Narayanaswamy Suresh Kumar Jagdish SinghPartner Managing Director Director

Membership Number : 095665 DIN No. 02741371 DIN No. 0042258

Place : Gurgaon Place : New Delhi Place : New Delhi

Date : April 16, 2016 Date : April 16, 2016 Date : April 16, 2016

111


STATEMENT OF PROFIT AND LOSS

(all amounts in rupees unless otherwise stated) Note Year ended Year ended March 31, 2016 March 31, 2015 (`) (`)Revenue from operations (net) 22 266,814,273 247,233,526 Other operating income 23 – 5,137,837 Other income 24 22,299,527 19,566,024 Total revenue 289,113,800 271,937,387 Expenses : Employee benefits expense 25 115,668,614 128,590,576 Depreciation and amortisation expense 26 1,383,016 2,083,501 Other expenses 27 79,818,205 54,233,421 Total expenses 196,869,835 184,907,498 Profit before tax 92,243,965 87,029,889 Tax expense: Current tax 28 31,207,684 35,340,000 Deferred tax 11 (1,249,565) 29,958,119 (5,717,976) 29,622,024 Profit for the year 62,285,846 57,407,865 Earnings per equity share [Nominal value per share: ` 10 (2015 : ` 10)] 30 Basic 138.41 127.57 Diluted 138.41 127.57 Significant accounting policies 1 The accompanying notes are an integral part of these financial statements. This is the Statement of Profit and Loss referred to in our report of even date. For Price Waterhouse Chartered Accountants LLP On behalf of the Board of Directors Registration No. : 012754N/N500016Ashok Narayanaswamy Suresh Kumar Jagdish SinghPartner Managing Director DirectorMembership Number : 095665 DIN No. 02741371 DIN No. 0042258Place : Gurgaon Place : New Delhi Place : New DelhiDate : April 16, 2016 Date : April 16, 2016 Date : April 16, 2016

CASH FLOW STATEMENT(all amounts in rupees unless otherwise stated) Year ended Year ended March 31, 2016 March 31, 2015 (`) (`)A. Cash flow from operating activities Profit before tax 92,243,965 87,029,889 Adjustments for: Depreciation and amortisation expense 1,383,016 2,083,501 Bad debts written off 813,194 – Provision for doubtful debts 18,714,255 1,350,000 Loss on sale of fixed assets 27,228 2,098 Profit on sale / redemption of current investment (13,558,432) (18,154,179) Dividend distribution tax paid 20,681 – Interest income (7,101,612) (384,397) Operating profit before working capital changes 92,542,295 71,926,912 Changes in working capital : Increase / (decrease) in trade payables 4,116,847 1,506,047 Increase / (decrease) in long - term provisions (13,409,729) 4,912,127 Increase / (decrease) in short - term provisions (3,262,485) 2,347,087 Increase / (decrease) in other current liabilities 14,354,468 5,980,230 Increase / (decrease) in other long - term liabilities 4,370,000 (10,653,821) (Increase) / decrease in trade receivables (25,447,369) (16,197,653) (Increase) / decrease in short - term loans and advances (626,655) 284,939 (Increase) / decrease in other current assets 1,838,137 (5,933,055) Cash generated from operations 74,475,509 54,172,813 Taxes paid (net of refunds) (33,144,161) (37,735,328) Net cash generated from operating activities 41,331,348 16,437,485 B. Cash flow from investing activities Purchase of fixed assets (1,883,883) (1,153,682) Sale of fixed assets – 10,500 Purchases of current investments (357,219,404) (169,700,000) Sale / Redemption of current investments 434,816,005 227,176,961 Interest Received 3,405,556 4,342 Proceeds from / (Investment in) bank deposits 26,500,000 (66,500,000) Net cash used in investing activities 105,618,274 (10,161,879)C. Cash flow from financing activities Dividend paid (105,976,884) (5,625,100) Dividend distribution tax paid (21,574,628) (955,986) Net cash used in financing activities (127,551,512) (6,581,086) Net Increase /(decrease) in cash and cash equivalents (A+B+C) 19,398,110 (305,480) Cash and cash equivalents at the beginning of the year 12,760,471 13,065,951 Cash and cash equivalents at the end of the year 32,158,581 12,760,471 Notes: 1 Cash and cash equivalents comprise of: Cash on hand 29,622 138,025 Balances with banks 32,128,959 12,622,446 Total 32,158,581 12,760,471

2 The above Cash Flow Statement has been prepared under the indirect method set out in Accounting Standard-3 on ‘Cash Flow Statements’ prescribed by The Companies (Accounting Standard) Rules, 2006. 3 Previous year figures have been reclassified / regrouped, wherever necessary to conform to the current year classification.

This is the Cash Flow Statement referred to in our report of even date. For Price Waterhouse Chartered Accountants LLP On behalf of the Board of Directors Registration No. : 012754N/N500016Ashok Narayanaswamy Suresh Kumar Jagdish SinghPartner Managing Director DirectorMembership Number : 095665 DIN No. 02741371 DIN No. 0042258Place : Gurgaon Place : New Delhi Place : New DelhiDate : April 16, 2016 Date : April 16, 2016 Date : April 16, 2016

112


NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016

1. SIGNIFICANT ACCOUNTING POLICIESi) BASIS OF PREPARATION These financial statements have been prepared in accordance

with the generally accepted accounting principles in India under the historical cost convention on accrual basis. Pursuant to Section 133 of the Companies Act, 2013 read with Rule 7 of the Companies (Accounts) Rules, 2014, till the standards of accounting or any addendum there to are prescribed by Central Government in consultation and recommendation of the National Financial Reporting Authority, the existing Accounting Standards notified under the Companies Act, 1956 shall continue to apply. Consequently, these financial statements have been prepared to comply in all material aspects with the accounting standards notified under Section 211(3C) of the Companies Act, 1956 [Companies (Accounting Standards) Rules, 2006, as amended] and other relevant provisions of the Companies Act, 2013.

All assets and liabilities have been classified as current or non – current as per the Company’s normal operating cycle and other criteria set out in the Schedule III to the Companies Act, 2013. Based on the nature of services, the Company has ascertained its operating cycle as 12 months for the purpose of current and non – current classification of assets and liabilities.

ii) REVENUE To recognise revenue from operations, which has reasonable

certainty of collection, at the time of rendering of services after deducting service tax from invoiced value.

iii) FIXED ASSETS To state fixed assets at cost of acquisition inclusive of inward

freight, duties and taxes and incidental expenses related to acquisition, net of accumulated depreciation/amortisation and accumulated impairment losses, if any.

To capitalise software where it is expected to provide future enduring economic benefits. The costs are capitalised in the year in which the relevant software is implemented for use.

To charge off as a revenue expenditure all upgradation/enhancements unless they bring similar significant additional benefits.

Losses arising from the retirement of, and gains or losses arising from disposal of fixed assets are recognised in the Statement of Profit and Loss.

iv) DEPRECIATION / AMORTISATION To calculate depreciation / amortisation on fixed assets, tangible

and intangible in a manner that amortises the cost of the assets after commissioning, over their estimated useful lives as specified in Schedule II of the Companies Act, 2013, by equal annual instalments as summarized below:

Category of Tangible Assets Useful life

Office equipment 5 Years

Computers end users devices 3 Years

Computer, network and servers 6 Years

Furniture and fixtures 10 Years

Vehicle 8 Years

To amortise capitalised computer software cost over a period of 5 years.

v) INVESTMENT Investments that are readily realisable and are intended to be

held for not more than one year from the date on which such investments are made, are classified as current investments. All other investments are classified as long term investments. Current investments at lower of cost and fair value; and long-term investments at cost. Where applicable, provision is made to recognise a decline, other than temporary, in valuation of long term investments, such reduction being determined and made for each investment individually.

vi) OTHER INCOME To account for income from investments and bank deposits on

an accrual basis, inclusive of related tax deducted at source. To account for income from dividends when the right to receive such dividends is established.

vii) EMPLOYEE BENEFITS To make regular contributions to the State administered provident

fund which are charged against revenue. To provide for all long term defined benefit schemes including gratuity, compensated absences and loyalty on the basis of actuarial valuation on the balance sheet date based on the projected unit credit method.

In respect of gratuity, the Company funds the benefits through annual contributions to Life Insurance Corporation of India (LIC) under its Group Gratuity Scheme. The actuarial valuation of the

liability towards the gratuity retirement benefits of the employees is made on the basis of certain assumptions with respect to the variable elements affecting the computations including estimation of interest rate of earnings on contributions to LIC.

The actuarial valuation of the liability towards the loyalty plan for the employees is made on the basis of certain assumptions with respect to the variable elements affecting the computations including performance ratings in the subsequent appraisal cycle.

To recognise the actuarial gains or losses in the Statement of Profit and Loss as income or expense in the period in which they occur.

viii) PROPOSED DIVIDEND To provide for dividend (including income tax thereon) in the

books of account as proposed by the directors, pending approval at the annual general meeting.

ix) FOREIGN CURRENCY TRANSLATIONS To account for transactions in foreign currency at the exchange

rate prevailing on the date of the transactions. Gains/Losses arising out of fluctuations in the exchange rates are recognised in Statement of Profit and Loss in the period in which they arise.

To account for gains / losses in the Statement of Profit and Loss on foreign exchange rate fluctuations relating to monetary items at the year end.

x) TAXES ON INCOME To provide current tax as the amount of tax payable in respect

of taxable income for the period, measured using applicable tax rates and tax laws.

To provide deferred tax on timing differences between taxable income and accounting income subject to consideration of prudence, measured using the tax rates and tax laws that have been enacted or substantively enacted tax rates by the balance sheet date.

Not to recognise deferred tax assets on unabsorbed depreciation and carry forward of losses unless there is virtual certainty that there will be sufficient future taxable income available to realise such assets.

xi) IMPAIRMENT OF ASSETS To provide for impairment loss, if any, to the extent, the carrying

amount of assets exceed their recoverable amount. Recoverable amount is higher of an asset’s net selling price and its value in use. Value in use is the present value of estimated future cash flows expected to arise from the continuing use of an asset and from its disposal at the end of its useful life.

Impairment losses recognised in prior years are reversed when there is an indication that the impairment losses recognised no longer exist or have decreased. Such reversals are recognised as an increase in carrying amounts of assets to the extent that it does not exceed the carrying amounts that would have been determined (net of amortisation or depreciation) had no impairment loss been recognised in previous years.

xii) CLAIMS To disclose claims against the Company not acknowledged as

debts after a careful evaluation of facts and legal aspects of the matter involved.

xiii) LEASES Leases in which a significant portion of the risks and rewards of

ownership are retained by the lessor are classified as operating lease. Operating lease charges are recognized as an expense in the Statement of Profit and Loss on a straight line basis over the lease term.

xiv) FINANCIAL AND MANAGEMENT INFORMATION SYSTEMS To practice an accounting system which unifies financial records

and is designed to comply with the relevant provisions of the Companies Act, 1956 and Companies Act, 2013 and provide financial information appropriate to the business and facilitate Internal Control.

xv) CASH AND CASH EQUIVALENTS To disclose in the cash flow statement, cash and cash equivalents

which includes cash in hand, demand deposits with banks, other short-term highly liquid investments with original maturities of three months or less.

xvi) EARNINGS PER SHARE To disclose basic earnings per share computed by dividing the

net profit or loss for the period attributable to equity 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 or loss for the period attributable to equity shareholders and the weighted average number of shares outstanding during the period is adjusted for the effects of all dilutive potential equity shares.

113


NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016(all amounts in rupees unless otherwise stated) As at As at March 31, 2016 March 31, 2015 (`) (`)2 Share capital Authorised 2,000,000 (March 31, 2015: 2,000,000) equity shares of ` 10 each 20,000,000 20,000,000 Issued, subscribed and paid up

450,008 (March 31, 2015: 450,008) equity shares of ` 10 each 4,500,080 4,500,080 4,500,080 4,500,080 (a) Reconciliation of number of equity shares As at As at March 31, 2016 March 31, 2015 (`) (`) No of Amount in No of Amount in Shares ` Shares `

Balance as at the beginning of the year 450,008 4,500,080 450,008 4,500,080 Add: Shares issued during the year – – – – Less: Shares bought back during the year – – – – Balance as at the end of the year 450,008 4,500,080 450,008 4,500,080 (b) Rights, preferences and restrictions attached to shares The company has one class of equity shares having a par value of ` 10

per share. Each shareholder is eligible for one vote per share held. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. In the event of liquidation, the equity shareholders are eligible to receive the remaining assets of the Company after distribution of all preferential amounts, in proportion to their shareholding.

(c) Shares held by holding company As at As at March 31, 2016 March 31, 2015 (`) (`) Equity Shares of ` 10 each fully paid up held by:

ITC Limited, the holding company 450,002 450,002 Held by management personnel as nominees of ITC Limited 6 6 (d) Details of shares held by shareholders holding more than 5% of

the aggregate shares in the Company As at As at March 31, 2016 March 31, 2015 (`) (`) ITC Limited, the holding company 450,002 99.98% 450,002 99.98% Held by management personnel as nominees of ITC Limited 6 0.02% 6 0.02%3 Reserves and surplus As at As at March 31, 2016 March 31, 2015 (`) (`) Capital reserve At the beginning and at the end of the year 3,000,000 3,000,000 General reserve

Balance as at beginning of the year 33,747,999 28,273,021 Add : transferred from surplus in the Statement of Profit and Loss during the year – 5,740,787 Less : adjustment made towards revision in useful life of fixed assets as per Schedule II of the Companies Act, 2013 (net of tax) – 265,809 Balance as at end of the year 33,747,999 33,747,999 Surplus in Statement of Profit and Loss

Balance as at beginning of the year 284,539,831 239,622,535 Profit for the year 62,285,846 57,407,865 Less : Appropriations Interim dividend on equity shares for the year* (100,351,784) – Proposed dividend on equity shares for the year (Refer note 21) – (5,625,100) Dividend distribution tax on Interim dividend on equity shares (20,429,265) – Dividend distribution tax on Proposed dividend on equity shares – (1,124,682) Transfer to general reserve – (5,740,787) Balance as at end of the year 226,044,628 284,539,831

262,792,627 321,287,830

* The Company has paid an Interim Dividend of ` 223 per share (on equity shares of `10 each) aggregating ` 100,351,784 during the year. No interim dividend was paid during the year ended March 31, 2015.

As at As at March 31, 2016 March 31, 2015 (`) (`)

4 Other long - term liabilities

Advance from customers 12,729,855 11,079,855

Income received in advance 8,457,031 5,737,031

21,186,886 16,816,886


5 Long - term provisions

Provisions for employee benefits:

Provision for leave encashment

(Refer note 25) 7,961,444 19,865,397

Provision for loyalty bonus

(Refer note 25) 9,872,924 11,378,700

17,834,368 31,244,097


6 Trade payables

Total outstanding dues of micro

and small enterprises # – –

Total outstanding dues of trade

payables other than micro and

small enterprises 11,654,985 7,538,138

11,654,985 7,538,138

# The Company, based on the information available on the status of

the suppliers, does not have any dues to enterprises covered under

the Micro, Small and Medium Enterprises Development Act, 2006.


7 Other current liabilities

Advance from customers 5,312,680 6,862,680

Statutory dues including provident

fund and tax deducted at source 4,567,178 3,910,150

Employee benefits payable 22,903,147 5,130,707

Income received in advance 1,210,000 3,735,000

33,993,005 19,638,537

As at As at March 31, 2016 March 31, 2015

(`) (`)

8 Short - term provisions

Provision for employee benefits:

Provisions for leave encashment

(Refer note 25) 3,471,745 6,535,316

Provision for loyalty bonus

(Refer note 25) 3,064,586 4,040,600

Provisions for short term

compensated absences 777,100 –

Other provisions:

Provision for proposed dividend

on equity shares – 5,625,100

Provision for dividend distribution

tax on proposed dividend on

equity shares – 1,124,682

7,313,431 17,325,698

114


NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016(all amounts in rupees unless otherwise stated)9. Tangible assets (Own Assets)

Particulars

Gross Block Accumulated Depreciation Net Block

As at April 1, 2015

Additions Disposal/ Adjustments

As at March 31,

2016

As at April 1, 2015

For the year

Disposal/ Adjustments

As at March 31,

2016

As at March 31, 2016

Office EquipmentComputers end users devicesComputer, network and serversFurniture and fixturesVehicle

758,038 7,729,536 1,301,307 1,523,379

50,650

101,249 1,782,634

– – –

(95,060) (571,425)

–––

764,227 8,940,745 1,301,307 1,523,379

50,650

420,945 6,054,997

744,459 1,150,689

4,581

67,567 1,032,020

113,072 164,342

6,015

(95,060) (544,197)

–––

393,452 6,542,820

857,531 1,315,031

10,596

370,775 2,397,925

443,776 208,348

40,054

Total 11,362,910 1,883,883 (666,485) 12,580,308 8,375,671 1,383,016 (639,257) 9,119,430 3,460,878

Particulars

Gross Block Accumulated Depreciation Net Block

As at April 1, 2014

Additions Disposal/ Adjust-ments

As at March 31,

2015

As at April 1, 2014

For the year Adjustment of fixed assets as per schedule II of the Companies Act,

2013 *


As at March 31,

2015

As at March 31,

2015

Office EquipmentComputers end users devicesComputer, network and serversFurniture and fixturesVehicle

758,038 6,927,972 1,301,307 1,325,244

41,150

– 801,564

– 198,135 50,650

– – ––

(41,150)

758,038 7,729,536 1,301,307 1,523,379

50,650

379,202 4,304,150

622,158 815,267 27,856

36,041 1,353,870

122,301 335,422

5,277

5,702 396,977

– ––

––––

(28,552)

420,945 6,054,997

744,459 1,150,689

4,581

337,093 1,674,539

556,848 372,690 46,069

Total 10,353,711 1,050,349 (41,150) 11,362,910 6,148,633 1,852,911 402,679 (28,552) 8,375,671 2,987,239 10. Intangible assets (Own Assets - Acquired)

Particulars

Gross Block Amortisation Net Block

As at April 1, 2015

Additions Disposal/ Adjustments

As at March 31,

2016

As at April 1, 2015

For the year




Computer software 2,625,404 – – 2,625,404 2,625,404 – – 2,625,404 –

Total 2,625,404 – – 2,625,404 2,625,404 – – 2,625,404 –

Particulars Gross Block Amortisation Net Block

As at April 1, 2014

Addi-tions

Disposal/ Adjust-ments

As at March 31,

2015

As at April 1, 2014

For the year

Adjustment of fixed assets as per schedule II of the Compa-nies Act, 2013 *

Disposal/ Adjust-ments

As at March 31,

2015

As at March 31,

2015

Computer software 2,625,404 – – 2,625,404 2,394,814 230,590 – – 2,625,404 –

Total 2,625,404 – – 2,625,404 2,394,814 230,590 – – 2,625,404 – * The estimated useful lives of certain fixed assets had been revised in accordance with Schedule II to the Companies Act 2013, with effect from 1st April 2014. Pursuant to the above mentioned changes in useful life of assets, with respect to assets whose remaining useful life was NIL as at April 01, 2014, the net book value of ` 265,809 (net of deferred tax of ` 136,870) had been adjusted with the opening General Reserve.

As at As at March 31, 2016 March 31, 2015 (`) (`)11 Deferred tax assets (net) Deferred tax asset : On provision for doubtful debts 11,339,373 4,775,909 On provision for employees benefits 9,674,664 14,271,733 On other timing differences 242,667 922,043

21,256,704 19,969,685 Deferred tax liabilities :

Depreciation / amortisation (325,527) (288,073)

20,931,177 19,681,612

Break-up of deferred tax assets and liabilities into major components of the respective balances is as under :

I. Balance brought forward - deferred tax asset 19,681,612 13,826,766

II. For the year : (i) Tax impact of difference between

depreciation / amortisation of fixed assets in the financial statements and the income tax return (37,454) 321,775


(ii) Tax impact of expenses charged in the financial statements but allowable as deduction in future years under income tax. 1,287,019 5,533,071

Net deferred tax asset (i+ii) (Refer note below) 1,249,565 5,854,846

Note : Includes ` Nil adjusted directly to opening General Reserve considering transitional provision stated in Schedule II to the Companies Act, 2013. (Previous year : `136,870)

III. Closing deferred tax asset (I + II) 20,931,177 19,681,612

12 Long - term loans and advances

Unsecured, considered good Advance income tax (net of provisions ` 113,862,229 ) (Previous year ` 110,233,229) 25,460,485 22,885,527

25,460,485 22,885,527

13 Other non - current assets Long term deposits with bank with maturity period more than 12 months – 40,000,000 Interest accrued on deposits – 78,904

– 40,078,904

115


NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016(all amounts in rupees unless otherwise stated) As at As at March 31, 2016 March 31, 2015 (`) (`)14 Current investments At Cost or fair value whichever is less:

Mutual funds (quoted) DHFL Pramerica Fixed Maturity Plan

Series 62 - Direct Plan - Growth (PY : DWS FMP Series 62 Direct Plan - Growth)

[916.15 units: Previous year (916.15 units)] 9,161 9,161

Mutual funds (unquoted)

ICICI Prudential Short Term - Direct Plan - Growth Option

[0 units: Previous year (349,296.17 units)] – 10,000,000 ICICI Prudential Ultra Short Term - Direct Plan - Growth [0 units: Previous year (3,152,131.39 units)] – 45,000,000 HDFC High Interest Fund - Direct Plan - Short Term Plan - Growth Option

[0 units: Previous year (363,553.08 units)] – 10,000,000 Franklin India Ultra Short Bond Fund Super Institutional Plan - Direct - Growth Plan

[0 units: Previous year (810,223.95 units)] – 15,000,000 HDFC Liquid Fund - Direct Plan - Growth Option [0 units: Previous year (1,088,005.11 units)] – 30,000,000 TATA Money Market Fund Direct Plan - Growth [0 units: Previous year (13,616.13 units)] – 30,000,000 IDFC Cash Fund - Growth - (Direct Plan) [0 units: Previous year (4,530.84 units)] – 7,700,000 Kotak Floater Short Term - Direct Plan - Growth

[0 units: Previous year (4,302.619 units)] – 8,243,039 ICICI Prudential Money - Market Fund - Direct Plan - Growth

[15645.896 units: Previous year (0 units)] 3,250,000 – UTI-Money Market Fund-Institutional Plan-Direct Plan-Growth

[22,804.416 units: Previous year (0 units)] 38,154,871 – Reliance Liquid Fund - Treasury Plan - Direct Growth Plan - Growth Option

[8,132.163 units: Previous year (0 units)] 30,000,000 – Reliance Liquidity Fund - Direct Growth Plan - Growth Option

[8,985.95 units: Previous year (0 units)] 20,500,000 –

91,914,032 155,952,200

Aggregate amount of quoted investments 9,161 9,161 Market value of quoted investments 10,866 9,998 Aggregate amount of unquoted investments 91,904,871 155,943,039

15 Trade receivables Unsecured, considered good Outstanding for a period exceeding six months

from the date they are due for payment 21,024,259 21,240,931 Others 91,288,823 81,379,059

112,313,082 102,619,990 Unsecured, considered doubtful

Outstanding for a period exceeding six months from the date they are due for payment 22,142,307 11,684,437 Others 4,483,213 – Less: provision for doubtful debts (26,625,520) (11,684,437) – – 112,313,082 102,619,99016 Cash and bank balances

Cash and cash equivalents Cash on hand 29,622 138,025

Bank balances - In current accounts 32,128,959 12,622,446 32,158,581 12,760,471 Other Bank Balances

Term Deposits with maturity more than 3 months but less than 12 months 40,000,000 26,500,000 72,158,581 39,260,471 17 Short - term loans and advances Unsecured, considered good : Other loans and advances : Prepaid expenses 545,322 488,441 Balance with Government Authorities 612,384 14,982 Security deposits 401,100 603,000 Advances to employees, vendors etc. 218,419 44,147

1,777,225 1,150,570

As at As at March 31, 2016 March 31, 2015 (`) (`)18 Other current assets Unsecured, considered good : Interest accrued on deposits 3,437,629 301,151 Contractual reimbursable expenses 27,822,293 33,433,602 31,259,922 33,734,753 Unsecured, considered doubtful :

Contractual reimbursable expenses 6,139,658 2,366,486 Less: provision for doubtful receivables (6,139,658) (2,366,486) – –

31,259,922 33,734,753 19 Contingent liabilities

Claims against the Company not acknowledged as debts

Service tax matter 4,570,992 4,570,992 Income tax matters 9,382,331 9,382,331

a The Company has received demand for service tax amounting to ̀ 4,570,992 (inclusive of cess and penalty) dated March 10, 2010 from Additional Commissioner, Service Tax pertaining to service tax on reimbursement of salary received by the Company during the period from 2003 to 2006. The Company has filed its appeal before the Central Excise and Service Tax Appellate Tribunal for the same.

b Demands from income tax authorities under appeal: - ` 6,757,173 for assessment year 2012-13 (March 31, 2015 : ` 6,757,173) - ` 2,625,158 for assessment year 2011-12 (March 31, 2015 : `2,625,158)c It is not practicable for the company to estimate the timings or amount

of cash outflows, if any, in respect of the above pending resolution of the respective proceedings.

As at As at March 31, 2016 March 31, 2015 (`) (`) 20 Capital Commitments

Estimated value of contracts in capital account remaining to be executed – 477,222

21 Proposed dividend The dividend proposed for the year is as follows: On equity shares of `10 each: Amount of dividend proposed – 5,625,100

Dividend per equity share – ` 12.5022 Revenue from operations (net)

Management consultancy and other services 266,814,273 247,233,526 266,814,273 247,233,526

Details of management consultancy and other services : Operating and marketing fees 259,543,456 233,056,060 Other fees 7,270,817 14,177,466 266,814,273 247,233,526 23 Other operating income

Income on closure of alliances – 5,137,837 – 5,137,83724 Other Income Interest Income on bank deposits 6,043,799 384,397 Interest Income on income tax refund 1,057,813 – Profit on sale / redemption of current investment 13,558,432 18,154,179 Miscellaneous income 1,639,483 1,027,448 22,299,527 19,566,02425 Employee benefits expense Salaries, wages and bonus * 204,147,525 208,831,978 Reimbursement of remuneration of deputed managers 31,120,751 29,466,287 Gratuity [Refer note (a) below] ** (after adjusting for movement in value of assets not recognised) 100,000 5,088,724 Contribution to provident and other funds [Refer note (b) below] 9,315,654 9,003,696 Staff welfare expenses 12,564,289 13,090,961 257,248,219 265,481,646 Less : Recoveries *** (141,579,605) (136,891,070) 115,668,614 128,590,576 * Net of ` 20,685,075 (P.Y. : ` Nil) being provision for leave encashment written

back during the year due to change in Company’s leave encashment policy. ** Includes ` Nil (P. Y.: ` 5,309,184) being excess of fair value of plan assets as

compared to present value of defined benefit of obligation as at March 31, 2016 which has been charged off as the Company does have any control over future economic benefits.

*** Recoveries of salary cost of deputed personnel from alliances. The Company has accounted for the defined benefit plan / other long term

employee benefit and contribution scheme as under: (a) Defined benefit plan / other long term employee benefits:

Gratuity : The employees are entitled to gratuity that is computed as half-month’s salary, for every completed year of service and is payable on retirement/termination. The Company makes provision of such gratuity liability in the books of accounts on the basis of actuarial valuation. The Company pays contribution to Life Insurance Corporation to fund its plan through a trust.

Other long term employee benefits: i) The employees are entitled for leave for each year of service and part thereof and subject

to the limits specified, the unavailed portion of such leaves can be accumulated or encashed during/at the end of the service period. The plan is unfunded.

ii) Loyalty Bonus Plan : This plan applies to those employees who have participated in the appraisal process for a minimum of three years after confirmation. The employees would be eligible to receive the amount as a lumpsum at the end of a cycle of three successive years of being rated for his / her performance. An amount of ` 2,805,410 (Previous year: ` 4,441,700) has been charged to the Statement of Profit and Loss during the year.

116


NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016(all amounts in rupees unless otherwise stated)

The reconciliation of opening and closing balances of the present value of defined benefit obligations are as under:

(i) Present value of defined benefit obligation Gratuity Leave EncashmentAs at

March 31, 2016`

As atMarch 31, 2015

`

As atMarch 31, 2016

`

As atMarch 31, 2015

`

Balance at the beginning of the year 8,569,001 7,175,338 26,400,713 19,960,999 Current service cost 3,065,992 2,799,480 1,273,939 3,537,821 Interest cost 621,361 528,585 1,908,938 1,349,747 Actuarial (gains) / losses (427,777) (1,224,625) 4,431,089 6,641,976 Benefits paid (568,364) (709,777) (1,896,415) (5,089,830)Past service costs – – (20,685,075) – Balance at the end of the year 11,260,213 8,569,001 11,433,189 26,400,713

(ii) Fair value of plan assetsBalance at the beginning of the year 13,878,185 10,813,425 – – Expected return on plan assets 1,210,065 1,111,122 – –Actuarial gains/ (losses) (1,607,734) 1,323,427 – –Contribution by the company 100,000 1,339,988 – –Benefits paid (568,364) (709,777) – –Settlements – – – – Balance at the end of the year 13,012,152 13,878,185 – –Actual return on plan assets 397,669 2,434,550 – –

(iii) Assets and liabilities as at balance sheet date(Refer Note 5 and 8) Present value of defined benefit obligation 11,260,213 8,569,001 11,433,189 26,400,713 Less: fair value of plan assets (13,012,152) (13,878,185) – –Less: unrecognised past service costs – – –Liability / (Assets) as at balance sheet date *(1,751,939) *(5,309,184) 11,433,189 26,400,713

* Not recognised

(iv) Expense recognised in the Statement of Profit and Loss Gratuity Leave EncashmentAs at

March 31, 2016`

As atMarch 31, 2015

`

As atMarch 31, 2016

`

As atMarch 31, 2015

`

Current service cost 3,065,992 2,799,480 1,273,939 3,537,821 Interest cost 621,361 528,585 1,908,938 1,349,747 Expected return on Plan Assets (1,210,065) (1,111,122) – – Actuarial (gains) / losses 1,179,957 (2,548,052) 4,431,089 6,641,976 Past service costs – – (20,685,075) – Settlements – – – –Curtailments – – – –Total expense 3,657,245 (331,109) (13,071,109) 11,529,544

(v) Major category of plan assets as a % of total plan assetsLife Insurance Corporation of India (100%) 13,012,152 13,878,185 – –

(vi) Actuarial assumptionsDiscount rate 7.50% p.a. 7.75% p.a. 7.50% p.a. 7.75% p.a.Expected return on plan assets 9.00% p.a. 9.00% p.a. N/A N/ASalary Growth Rate 6.00% p.a. 6.00% p.a. 6.00% p.a. 6.00% p.a.Attrition Rate 25.00% p.a. 25.00% p.a. 25.00% p.a. 25.00% p.a.

The estimates of future salary increases, considered in actuarial valuation, takes into account, inflation, seniority, promotions and other relevant factors, such as demand and supply factors in the employment market.

Year ended Year ended Year ended Year ended Year ended March 31, 2016

`March 31, 2015

`March 31, 2014

`March 31, 2013

`March 31, 2012

`(vii) Amounts recognised in current year and previous four years

GratuityDefined benefit obligation 11,260,213 8,569,001 7,175,338 5,960,887 4,152,362 Plan asset 13,012,152 13,878,185 10,813,425 8,771,860 6,863,747 Surplus / (deficit) 1,751,939 5,309,184 3,638,087 2,810,973 2,711,385 Experience adjustments in plan liabilities [(gain) / loss] (511,427) (1,363,585) (1,157,808) (667,282) (1,113,179)Experience adjustments in plan Assets [gain / (loss)] 1,607,734 (1,292,563) 15,842 260,652 (24,348)Leave encashmentDefined benefit obligation 11,433,189 26,400,713 19,960,999 17,433,307 14,207,739 Plan asset – – – – –Surplus / (deficit) (11,433,189) (26,400,713) (19,960,999) (17,433,307) (14,207,739)Experience adjustments in plan liabilities [(gain) / loss] 1,779,159 5,229,015 3,527,807 2,717,431 2,172,406 Experience adjustments in plan assets [gain / (loss)] – – – – –

(viii) Expected contribution to the funds in the next yearGratuity – – – – –

(b) State plans (contribution scheme):

The Company deposits an amount determined at a fixed percentage of basic pay every month to the State administered Provident Fund for the benefit of the employees. Accordingly, the Company’s contribution during the year that has been charged to revenue amounts to `8,892,169/- (Previous year ` 8,644,526/-).

Year ended Year ended March 31, 2016 March 31, 2015 (`) (`) 26 Depreciation and amortisation expense [refer note 9 & 10] Depreciation on tangible assets 1,383,016 1,852,911 Amortisation on intangible assets – 230,590

1,383,016 2,083,501

117


Year ended Year ended March 31, 2016 March 31, 2015 (`) (`) 27 Other expenses Power and fuel 596,839 378,862 Rent [refer note 32] 6,687,622 5,447,206 Repairs - others 2,641,808 1,855,126 Insurance 219,502 169,409 Rates and taxes 28,641 35,580 Travelling and conveyance 14,920,079 15,081,939 Expenditure towards Corporate Social Responsibilty (CSR) activities 1,748,000 1,618,000 Legal Consultancy / professional fees 6,668,863 5,380,109 Printing and stationery 492,250 455,142 Communication expenses 3,270,010 3,040,289 Advertising / sales promotion 14,225,954 13,774,549 Provision for doubtful debts 18,714,255 1,350,000 Bad debts written off 813,194 – Information technology expenses 5,565,419 3,419,059 Bank charges 14,604 16,090 Loss on sale / write-off of fixed assets (net) 27,228 2,098 Payment to auditors (excluding service tax) As auditor: - Audit fee 350,000 250,000 - Tax audit fee 50,000 50,000 - Other services 875,000 200,000 - Reimbursement of expenses 68,006 161,263 Miscellaneous expenses 1,840,931 1,548,700 79,818,205 54,233,421

Year ended Year ended March 31, 2016 March 31, 2015 (`) (`) 28 Current tax Income tax for the year 31,150,000 35,340,000 Adjustments / (credits) related to previous years (Net) 57,684 – 31,207,684 35,340,000 29 Expenditure in foreign currency Advertisement / sales promotion 1,758,804 2,695,864 1,758,804 2,695,864 30 Earnings per equity share Profit after tax 62,285,846 57,407,865 Weighted average number of shares outstanding 450,008 450,008 Basic and diluted earnings per share (in ` ) 138.41 127.57 (Face value - ` 10/- per share)31 Related party disclosures under Accounting Standard 18 a) Names of related parties and nature of relationship: i) Where control exists: Holding Company ITC Limited ii) Key Management Personnel: Nakul Anand (Director) Suresh Kumar (Managing Director) Jagdish Singh (Additional Director w.e.f. March 21, 2016) Arun Pathak (Director) (Ceased to be Director w.e.f. March 21, 2016) iii) Other related parties with whom transactions have taken place during the year : Associate of Holding Company International Travel House Limited Entity under control of the ITC Group ITC Rural Development Trust ITC Sangeet Research Academy

b) Summary of transactions / balances (`) :

Transactions / balancesHolding Company Other Related Parties Key Management Personnel

March 31, 2016

March 31, 2015

March 31, 2016

March 31, 2015

March 31, 2016

March 31, 2015

1 Operating and marketing fees[Inclusive of service tax -`24,10,788/- (Previous year - `15,92,060/-)]

19,613,742 14,471,817

2 Purchase of services- ITC Limited- International Travel House Limited

413,488 471,526

3,216,891

3,562,4523 Rent

[Inclusive of service tax - ` 1,99,368/- (Previous year - `1,83,857/-)] 1,694,802 1,671,372

4 Remuneration of managers / staff on deputation recovered- ITC Limited[Inclusive of service tax - ` 16,59,780/- (Previous year - ` 14,75,808/-)]

13,537,501 13,356,095

5 Remuneration of managers on deputation reimbursed (including remuneration of Suresh Kumar - Managing Director) ` 5,059,362/- (Previous year - ` 7,54,585/-) as disclosed below)

31,120,751 29,466,287

6 Dividend payments 105,976,884 5,625,100 7 Expense recovered during the year (amount due on account of payments made on behalf of

related parties)- ITC Limited 813,747 3,373,662

8 Expense reimbursed during the year (amount due to related parties on account of payments made by them on behalf of the Company) - ITC Limited(including remuneration of Suresh Kumar - Managing Director ` 600,000/- (Previous year - ` 98,214/-))- International Travel House Limited

11,045,716 12,525,596

67,580 288,6689 Remuneration to Key Management Personnel

- Suresh Kumar 7,016,637

992,282

10 Expenditure towards Corporate Social Responsibilty (CSR) activities- ITC Rural Development Trust- ITC Sangeet Research Academy

1,748,000

1,618,000 11 Closing Balances:

(i) Trade receivables- ITC Limited(ii) Other current assets- ITC Limited(iii) Trade payables- ITC Limited- International Travel House Limited(iv) Other current liabilities- Suresh Kumar (Refer note below)

2,361,080

1,713,382

3,114,563

1,061,729

1,080,803

2,295,113 534,502 115,466

–

98,462 Note : The Remuneration paid to the Managing Director due to the inadequacy of profits, is subject to the approval of shareholders by special resolution in the ensuing Annual General Meeting of the Company.32 Lease arrangements The Company’s significant leasing arrangements are in respect of operating leases for premises (residential, office etc.). These leasing arrangements which are cancellable range between 11

months and 2 years generally, or longer, and are usually renewable by mutual consent on mutually agreeable terms. The aggregate lease rentals payable are charged as rent under Note 27.33 Segment reporting The Company operates in a single operating segment i.e. Hoteliering and within one geographical segment i.e. India and accordingly, in accordance with Accounting Standard 17 - “Seg-

ment Reporting”, no segment disclosures have been made. 34 Previous year figures Previous year figures have been reclassified / regrouped to conform to current year’s classification. For Price Waterhouse Chartered Accountants LLP On behalf of the Board of Directors Registration No. : 012754N/N500016Ashok Narayanaswamy Suresh Kumar Jagdish SinghPartner Managing Director DirectorMembership Number : 095665 DIN No. 02741371 DIN No. 0042258Place : Gurgaon Place : New Delhi Place : New DelhiDate : April 16, 2016 Date : April 16, 2016 Date : April 16, 2016

NOTES FORMING PART OF THE FINANCIAL STATEMENTS FOR THE YEAR ENDED MARCH 31, 2016(all amounts in rupees unless otherwise stated)

Documents

2. PERFORMANCE OF THE COMPANY