(q) Accounting for Provisions, Contingent Liabilities and Contingent Assets:
(i) Provisions are recognised when the Company has a binding present obligation. This may be either legal because it derives
from a contract, legislation or other operation of law because the Company created valid expectations on the part of the third
parties by accepting certain responsibilities. To record such an obligation it must be probable that an outflow of resources will
be required to settle the obligation and a reliable estimate can be made for the amount of the obligation.
(ii) Contingent Liabilities are disclosed in respect of possible obligations that arise from past events but their existence will be
confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the
Company or where any present obligation cannot be measured in terms of future outflow of resources or where a reliable
estimate of the obligation cannot be made.
(iii) Disclosure of the contingent assets are made when it is probable that there is an inflow of future economic benefits. However,
when the realisation of income is virtually certain, then the related asset is no longer a contingent asset, but it is recognised as
an asset.
(r) Exceptional items:
The company discloses certain financial information both including and excluding exceptional items. The presentation of information
excluding exceptional items allows a better understanding of the underlying performance of the company and provides consistency
with the company's internal management reporting. Exceptional items are identified by virtue of either their size or nature so as to
facilitate comparison with prior periods and to assess underlying trends in the financial performance of the company.
(s) Statement of Cash Flows:
Cash flows are reported using the indirect method, whereby profit/ (loss) before tax is adjusted for the effects of transactions of non¬
cash nature and any deferrals or accruals of past or future cash receipts or payments. Cash flow for the year are classified by operating,
investing and financing activities.
(t) Earnings per Share:
Basic earnings per share is computed, by dividing the profit or loss after tax by the weighted average number of equity shares
outstanding during the year. Diluted earnings per share is computed by dividing the profit / (loss) after tax as adjusted for dividend,
interest and other charges to expense or income (net of any attributable taxes) relating to the dilutive potential equity shares, by the
weighted average number of equity shares considered for deriving basic earnings per share.
(u) Financial Instruments:
(1) Financial assets
(i) Initial recognition and measurement
Financial assets are recognised when and only when, the Company becomes a party to the contractual provisions of the
financial instrument. The Company determines the classification of its financial assets at initial recognition.
When financial assets are recognised initially, they are measured at fair value. Transaction costs that are directly attributable to
the acquisition or issue of financial assets, which are not at fair value through profit or loss, are adjusted to the fair value on initial
recognition.
(ii) Classification:
a. Cash and Cash Equivalents
Cash comprises cash/cheques on hand and demand deposits with banks. Cash equivalents are short-term balances with an
original maturity of three months or less from the date of acquisition, highly liquid investment that are readily convertible into
known amounts of cash and which are subject to insignificant risk of changes in value.
b. Debt Instruments
The Company classifies its debt instruments, as subsequently measured at amortised cost or fair value through Other
Comprehensive Income or fair value through profit or loss based on its business model for managing the financial assets and
the contractual cash flow characteristics of the financial asset.
(i) Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost if these financial assets are held for collection of
contractual cash flows where those cash flows represent solely payments of principal and interest. Interest income
from these financial assets is included as a part of the Company's income in the Statement of Profit and Loss using the
effective interest rate method.
(ii) Financial assets at fair value through Other Comprehensive Income (FVOCI)
Financial assets are subsequently measured at fair value through Other Comprehensive Income if these financial assets
are held for collection of contractual cash flows and for selling the financial assets, where the assets cash flows represent
solely payments of principal and interest. Movements in the carrying value are taken through Other Comprehensive
Income, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains or losses
which are recognised in the Statement of Profit and Loss. When the financial asset is derecognised, the cumulative gain
or loss previously recognised in Other Comprehensive Income is reclassified from Other Comprehensive Income to the
Statement of Profit and Loss. Interest income on such financial assets is included as a part of the Company's income in
the Statement of Profit and loss using the effective interest rate method.
(iii) Financial assets at fair value through profit or loss (FVTpL)
Assets that do not meet the criteria for amortised cost or FVOCI are measured at fair value through profit or loss. A gain
or loss on such debt instrument that is subsequently measured at FVTPL and is not part of a hedging relationship as well
as interest income is recognised in the Statement of Profit and Loss.
c. Equity Instruments
The Company subsequently measures equity investment at cost. Dividends from such investments are recognised in the
Statement of Profit and Loss as other income when the Company's right to receive payment is established.
de-recognition
A financial asset is derecognised only when the Company has transferred the rights to receive cash flows from the financial
asset. Where the Company has transferred an asset, the Company evaluates whether it has transferred substantially all risks
and rewards of ownership of the financial asset. In such cases, the financial asset is derecognised. Where the Company has
not transferred substantially all risks and rewards of ownership of the financial asset, the financial asset is not derecognised.
Where the Company retains control of the financial asset, the asset is continued to be recognised to the extent of continued
involvement in the financial asset.
(2) Financial liabilities
Initial recognition and measurement
Financial liabilities are recognised when and only when, the Company becomes a party to the contractual provisions of the
financial instrument. The Company determines the classification of its financial liabilities at initial recognition.
All financial liabilities are recognised initially at fair value. Transaction costs that are directly attributable to the acquisition or issue
of financial liabilities, which are not at fair value through profit or loss, are adjusted to the fair value on initial recognition.
Subsequent measurement
After initial recognition, financial liabilities that are not carried at fair value through profit or loss are subsequently measured at
amortised cost using the effective interest method. Gains and losses are recognised in the Statement of Profit and Loss when
the liabilities are derecognised, and through the amortisation process.
De-recognition
A financial liability is de-recognised when the obligation under the liability is discharged or cancelled or expires. When an
existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing
liability are substantially modified, such an exchange or modification is treated as a de-recognition of the original liability and the
recognition of a new liability, and the difference in the respective carrying amounts is recognised in the Statement of Profit and
Loss.
(3) Impairment of financial assets
The Company assesses, at each reporting date, whether a financial asset or a group of financial assets is impaired and allowance
for losses on such assessment is made in the Statement of Profit and Loss.
(v) Recent accounting pronouncements:
a. Application of New Accounting pronouncement:
The Company has applied the following Ind AS pronouncement pursuant to issuance of the Companies (Indian Accounting Standard)
Amendment Rules, 2023 with effect from 1st April, 2023. The effect is described below:
• Ind AS 1 - Presentation of Financial Statements
The amendments requires disclosure of material accounting policies rather than significant accounting policies. In the financial
statements the disclosure of accounting policies has been accordingly modified. The impact of such modifications to the
accounting policies is insignificant.
• Ind AS 12 - Income Taxes
The definition of deferred tax asset and liability is amended to apply initial recognition exception on assets and liabilities that
does not give rise to equal taxable and deductible temporary differences. There is no impact of the amendment on the financial
statement.
• Ind AS 8 - Accounting Policies, Changes in Accounting Estimates and Errors
The amendment has defined accounting estimate as well as laid down the treatment of accounting estimate to achieve the
objective set out by accounting policy. There is no impact of the amendment on the financial statement.
b. new Standards/Amendments notified but not yet effective:
During the year ended March 31,2025, MCA has not notified any new standards or amendments to the existing standards applicable to the
Company.
The rupee loan from BMW Financial Services (I) Limited - I to IV is secured against vehicles and is repayable in 60 EMI starting from April 2020. The
loan is fully repaid during the year.
Note B :
The rupee loan from BMW Financial Services (I) Limited - V is secured against vehicles and is repayable in 60 EMI of ' 2.09 Lakhs starting from
October 2022 and the balance of ' 52.03 lakhs after paying 60 EMI is to be paid in one installment.
Note C :
The rupee loan from Kotak Mahindra Prime Limited is secured against vehicles and is repayable in 36 EMI starting from June 2022.
Note D :
The rupee loan from Mercedes-Benz Financial Services India Pvt. Ltd. is secured against vehicles and is repayable in 60 EMI starting from May 2023.
The rupee loan from Mercedes-Benz Financial Services India Pvt. Ltd. is secured against vehicles and is repayable in 48 EMI starting from Mar 2025.
Note F :
The Company has availed Overdraft facility from Punjab national Bank of ' 600 Lakhs (P Y ' 405 Lakhs) against the security of fixed deposit of
' 700 Lakhs (P Y ' 478.39 lakhs).
Note G :
The Company has availed working capital facility of ' 1,000 Lakhs and taken term loan sanction of ' 3,000 Lakhs from Kotak Mahindra Bank Limited,
which is still pending for disbursement.
The said loans are secured against first and exclusive charge on all existing and future current and fixed assets (including lease rentals) of the
Borrower. Hypothecation of rent receivables from M/s Totalenergies Marketing India Private Limited, M/s Housing Development Finance Corporation
Limited (now HDFC Bank Limited) and M/s Safran India Private Limited or any other tenants in future of the mortgaged collateral property. Mortgage
of the Unit No. A-14 and A-15 at Ground Floor, Entire 2nd Floor, Entire 3rd Floor, Entire 4th Floor and Entire 5th Floor of the building named Leela Galleria
situated at Andheri Kurla Road, Mumbai - 400 059 held as Investment Property. The loan is secured by personal guarantee of Mr. Dinesh Nair and
Corporate guarantee of Leela Fashion Private Limited. The working capital facility is to be reviewed every year.
The term loan of ' 3,000 Lakhs is sanctioned for payment of disputed liability. The Bank will disburse as and when the dispute is settled. The said
loan is repayable in 120 installment starting from month following the month of first disbursement. The loan carry MCLR 3% as rate of interest.
37. Additional information to the Financial Statements
37.1 Disputes with Airports Authority of India (AAI)
(a) The lease agreement with Airports Authority of India (AAI) for leasing of 18000 sq mtrs of land for Mumbai hotel was valid till 11th July,
2012. AAI vide letter dated 31st March, 2011, had offered to extend the lease for another 30 years, on the revised terms, which the
Company had accepted. Pending execution of the lease agreement, AAI had been provisionally extending the lease for 3 to 6 months
at a time and the latest extension was till 11th January, 2016. AAI has arbitrarily increased the lease rental payable for the Mumbai hotel,
effective from 1st October 2014, the increased rentals on the basis of such arbitrary increase works out to ' 15,380 lakhs for the period
upto 31st March 2025 (upto 31st March 2024'13,359 lakhs). The Company has objected to this increase and therefore not provided
for the same. AAI has unilaterally terminated the lease and commenced eviction proceedings. The Company is legally contesting
the same and Hon'ble Bombay High Court vide interim order dated 30th June, 2021 directed to AAI not to proceed in the matter of
eviction. The final judgement in the matter of eviction has not yet been passed. Depreciation on Mumbai hotel building is provided at
the applicable rate, on the assumption that the lease will be renewed.
Further Resources of Aviation Redressal Association (ROAR) has filed a Public interest writ petition (PIL) before Hon'ble Bombay High
Court against Union of India through Secretary, Ministry of Civil Aviation (Respondent no.1), Airport Authority of India (Respondent
No.2) and the Company (Respondent No.3) assailing the action of respondents no.1 & 2 in granting ad-hoc and unlawful extension of
lease of 18000 Sq. Mtr. land without calling for public bids and/or involving any form of competitive bidding process. Hon'ble Bombay
High Court disposed of said PIL on technical ground. The ROAR filed Special Leave Petition before Hon'ble Supreme Court of India
contesting the said Order. The matter is pending at the hearing stage.
(b) The Company had also entered into another lease agreement on 7th February, 1996 with the AAI for a land admeasuring 11,000 sqmt
intended for the construction of a 150-room Hotel at Mumbai. A Supplementry Agreement dated 7th February 1996 entered into
between the Company and AAI. The terms of the agreements was royalty on Gross Turnover with minimum guaranteed amount (MG)
for a specfied period and Ground Rent. The terms and conditions specified in the Supplemental Agreement, became impossible of
performance for various reasons and therefore the project could not come through and the 150 room hotel could not be constructed.
The Company vide letter dated 6th April, 2017 requested AAI to take over immediate physical possession of the land pending restoration
of FSI by the Company. No Provision has been made for the cost of FSI as it is not ascertainable. However, AAI commenced the eviction
proceedings with their claim of MG on projected turnover and enhanced rent. As per the revised claim filed by the AAI in February 2019
before the eviction officer, the amount claimed by AAI as on 31st January 2019 is ' 80,705 lakhs towards royalty on projected turnover
and rent including interest as against ' 28,537 lakhs as on 31st January 2017 claimed earlier by AAI, which the Company is disputing.
The Company is legally contesting the same and Hon'ble Bombay High Court vide it's interim order dated 30th June, 2021 directed to
AAI not to proceed in the matter of eviction. The final judgement in the matter of eviction has not yet been passed. According to legal
opinion received, the liability is contingent in nature and hence no provision is made for the disputed claim in the books.
c) The above disputes reffered to the Settlement Advisory Committee duly constituted by the Board of AAI. The Company in the various
meetings held with them, putforth their submisions against the demand raised by them arbitrarily and requested for the renewal of
lease for further period. The Company has received an offer letter dated 01/12/2023 from AAI for the renewal of lease of land for 18,000
sq.mt. subject to certain terms and conditions. The Company had made submissions and representation to reconsider certain terms
and condition. The Company is awaiting for the final decision.
d) In view of the above the company has not adopted IND AS-116 on the above leased transactions.
37.2 An appeal filed by one of the shareholder claiming to be minority shareholder viz. ITC Ltd. with Supreme Court of India against the order
of Securities Appellate Tribunal (SAT) in the matter of transfer of Business Undertaking to Brookfield Group is pending for hearing. The
National Company Law Tribunal (NCLT), Mumbai has passed an order dated 24/01/2024 for the petition filed by said ITC Limited and it's
subsidiary alleging oppression and mismanagement, waiving the minimum threshold of 10% shareholding for filing petition under section
241 of Companies Act, 2013. The Company has filed an appeal against the said order before The National Company Law Appellate Tribunal
(NCLAT). The matter is under the hearing stage.
37.3 Going Concern Basis
The financial statements of the Company have been prepared on a ‘Going concern basis' on the assumption that the Company shall get
favourable judgements and settlements in respect of matters referred in Note No.37.1(a) and (b) including the renewal of lease and continue
the business.
37.6 Employee benefit plans
Defined contribution plans
The Company makes Provident Fund contributions to defined contribution plans for qualifying employees. Under the plan, the Company is
required to contribute a specified percentage of the payroll costs to fund the benefits. The contributions payable under these plans by the
Company are at rates specified in the rules of the schemes.
defined benefit plans
The Company offers the following employee benefit schemes to its employees :
(i) Gratuity
The Company has a tie-up under Employees' Trust Deed Group Gratuity- cum-Life Assurance Scheme of the Life Insurance Corporation
of India, and has partly funded the defined benefit plan for eligible employees. The scheme provides for lump sum payment to eligible
employees on retirement, death while in employment or on termination of employment, of an amount equivalent to 15 days' salary
payable for each completed year of service or part thereof in excess of six months subject to a limit of ' 20 lakhs. The unfunded portion
as well as the amounts in excess of the limit are to be borne by the Company, as per policy. Eligibility occurs upon completion of five
years of service.
The present value of the defined benefit obligation and current service cost are measured using the Projected Unit Credit Method, with
actuarial valuations being carried out at each balance sheet date.
(ii) Compensated absence liabilities
Present value of compensated absence liabilities (unfunded) recognised in Balance Sheet as per actuarial valuation under Projected
Unit Credit Method.
37.7 Segment Information
The Company has identified single reportable segment, i.e., hotel, as its business. Accordingly, disclosures relating to the segmentation
under Ind AS 108, “Operating Segment” is not required.
37.8 Leases
a) The Company's lease asset primarily consist of lease for buildings. The Company has applied the exemption not to recognize right-of-
use assets and liabilities for leases with:
i) less than 12 months of lease term on the date of contract inception.
ii) either low value or cancellable at the option of lessee.
iii) lease already expired and not renewed till date.
iv) Variable lease payments (including deposit given to the lessor) that do not depend on an index or a rate.
v) Lease payment related to discontinued operations.
b) The Company incurred ' 491.84 lakhs for the year ended 31st March, 2025 towards expenses related to either short-term leases or low
value lease or variable lease .
c) The Company incurred ' 2,609.96 lakhs for the year ended 31st March, 2025 towards lease with AAI is which is expired and not
renewed.
d) The weighted average effective interest rate applied to lease liabilities is 9%.
b) (i) The Company had not granted any loans or advances in the nature of loans to promoters, directors, KMP's and the related
parties defined (as defined under Companies Act, 2013) either severally or jointly with any other person.
(ii) The operations of the Company are classified as “’’Infrastructure Facilities”” as defined under Schedule VI to the Act. Accordingly,
the disclosure requirements specified in sub-section 4 of Section 186 of the Act in respect of loans given, guarantee given,
security provided and the related disclosure on purposes/utilisation by recipient companies, are not applicable to the company.”
c) The Company was not holding any benami property and no proceeding was initiated or pending against the Company for holding any
benami property under the Benami Transactions (Prohibition) Act,1988.
d) The Company has used funds borrowed for the specific purposes only for the purposes which it has been borrowed.
e) Borrowings as reported in financial statements for the year ended March 31,2025, we confirm that all charges created/ satisfied during
FY 2024-25 have been registered with the Ministry of Corporate Affairs.
f) The Company has not advanced or loaned or invested (either from borrowed funds or share premium or any other sources or kind of
funds), to or in any other persons or entities, including foreign entities (“Intermediaries”), with the understanding, whether recorded in
writing or otherwise, that the Intermediary shall:
- directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by
or on behalf of the Company or
- provide any guarantee, security or the like to or on behalf of the Ultimate Beneficiaries.
g) The Company has not received any funds from any persons or entities, including foreign entities (“Funding Parties”), with the
understanding, whether recorded in writing or otherwise, that the Company shall:
- directly or indirectly, lend or invest in other persons or entities identified in any manner whatsoever (“Ultimate Beneficiaries”) by
or on behalf of the Funding Party or provide any guarantee, security or the like from or on behalf of the Ultimate Beneficiaries.
h) The Company has not traded or invested in crypto currencies or virtual currencies during the year ended 31st March, 2025.
c. Considering the contracted rate of interest, the carrying amounts of all other term borrowings that are measured at fair value are
reasonable approximation of fair value .
d. For financial assets and liabilities that are measured at fair value, the carrying amounts are equal to their fair values.
Analysis of fair value measurement :
a. The Company uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation
technique:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
Level 2: other techniques for which all inputs which have a significant effect on the recorded fair value are observable, either
directly or indirectly.
Level 3: techniques which use inputs that have a significant effect on the recorded fair value that are not based on observable
market data.
Note 39: Financial Risk Management
Risk Management Framework
The activities of the Company expose it to market risk, credit risk and liquidity risk.
The Company's principal financial liabilities comprise, long term security deposits received, trade and other payables. The group has trade
and other receivables and cash and short term deposits that arrive directly from its operations. The Company has also paid long term lease
deposits.
The Company's Board of Directors has the overall responsibility for the establishment and oversight of the Company's risk management
framework. The company's risk management policies are established to identify and analyse the risk faced by the company,to set appropriate
risk limits and controls and to monitor risks and adherence to limits.Risk management policies and systems are reviewed regularly to reflect
changes in market conditions and the companys activities. The company's Audit Committee overseas how management monitors compliance
with the company's risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the
risks faced by the company.
A Market Risk:
Market risk is the risk of loss of future earnings, fair values or future cash flows that may result from a change in the price of a financial
instrument. The value of a financial instrument may change as a result of changes in interest rates, foreign currency exchange rates
and other market changes that affect market risk sensitive instruments. Market risk is attributable to all market risk sensitive financial
instruments including investments and deposits, foreign currency, payables and loans and borrowings.
The Company manages market risks through finance department, which evaluates and exercises independent control over the entire
process of market risk management. The finance department recommends risk management objectives and policies which are
approved by the finance committee and Audit Committee. The activities of the department includes management of cash resources,
borrowing strategies and ensuring compliance with market risk limits and policies.
- Interest rate risk
Interest rate risk is the risk that the fair value of future cash flows of the financial instruments will fluctuate because of changes in
market interest rates. The Company's exposure to the risk changes in the market interest rates relates primarily to the Company's debt
obligations which is fully repaid during the year as a part of settlement with lenders.
The borrowings in terms of fixed rate and floating rate are as follows:
- Foreign currency risk
Foreign currency risk is the risk that the fair value of the future cash flows of a financial instrument will fluctuate due to the changes in
the foreign exchange rates. However, as on the date of balance sheet, the Company has no foreign currency denominated assets and
liabilities except nominal trade payable which does not have any major impact on the financial statement.
B Credit Risk:
Credit risk arises from the possibility that the counter party may not be able to settle their obligation as agreed. Customer credit
risk is managed by each business unit subject to Company's established policy, procedure and control relating to customer risk
management. Further, the Company periodically assesses financial reliability of customers and other counter parties, taking into
account the financial condition, current economic trends, and analysis of historical bad debts and ageing of financial assets. Individual
risk limits are set and periodically reviewed on the basis of such information.
Financial assets are written off when there is no reasonable expectations of recovery, such debtor failing to engage in a repayment
plan with the Company. Where loans or receivables have been written off, the Company continues to engage in enforcement activity
to attempt to recover the receivables due. Where recoveries are made, these are recognised as income in the statement of profit and
loss.
The Company measures the expected credit loss of trade receivables and advances based on historical trend, industry practices and
the business environment in which the entity operates. Based on the historical data the provision for loss on receivables is made.
C Liquidity Risk :
The Company's principal sources of liquidity are cash and cash equivalents and the cash flow that is generated from operations.
Competitive intensity has adversely impacted revenue and consequent cash accruals during the year. The Company closely monitors
its liquidity position to ensure that the operations of the Company are not affected adversely due to liquidity and is attempting to
enhance its sources of funding by increasing cash flow generated from its operations and realisations from other proposed measures.
D Capital Risk Management:
The Company aim to manages its capital efficiently so as to safeguard its ability to continue as a going concern and to optimise returns
to our shareholders and to service debt obligations, whilst maintaining maximum operational flexibility. Consistent with others in the
industry, the Company monitors capital on the basis of the gearing ratio. This ratio is calculated as net debt divided by Equity. Net debt
is calculated as total borrowings less cash and cash equivalents and current investments.
In terms of our report attached
For N. S. Shetty & Co. For and on behalf of the Board of Directors
Chartered Accountants Vivek nair Chairman and Managing Director
Registration No : 110101W DIN: 00005870
dinesh nair Co-Chairman and Managing Director
Rohit Shetty DIN: 00006609
Partner
Membership No. 135463 Savitri Yadav umesh dombe Chief Financial Officer
Mumbai, 22nd May 2025 Company Secretary
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