(m) Provisions, Contingent Liabilities and Contingent Assets:
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, or constructive because the
Company created valid expectations on the part of 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. The amount recognised
as a provision and the indicated time range of the outflow of economic benefits are the best estimate
(most probable outcome) of the expenditure required to settle the present obligation at the balance sheet
date, taking into account the risks and uncertainties surrounding the obligation. Non-current provisions
are discounted if the impact is material.
Contingent liabilities are disclosed only when there is a possible obligation arising from past events, due
to 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. Obligations are assessed on an
ongoing basis and only those having a largely probable outflow of resources are provided for.
Contingent assets are disclosed in the Financial Statements by way of notes to accounts when an inflow of
economic benefits is probable.
Provisions, contingent assets and contingent liabilities are reviewed at each balance sheet date.
(n) Borrowing Costs:
General and specific borrowing costs directly attributable to the acquisition or construction of qualifying
assets that necessarily takes a substantial period of time to get ready for their intended use or sale, are
added to the cost of those assets, until such time as the assets are substantially ready for their intended use
or sale. Borrowing costs consist of interest and other costs that the company incurs in connection with the
borrowing of funds.
Interest income earned on temporary investment of specific borrowings pending their expenditure on
qualifying assets is deducted from the borrowing costs eligible for capitalization. Borrowing costs that are
not directly attributable to a qualifying asset are recognised in the Statement of Profit or Loss using the
effective interest method.
(o) 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.
(p) Exceptional items:
Exceptional items are disclosed separately in the financial statements where it is necessary to do so to
provide further understanding of the financial performance of the Company. These are material items of
income or expense that have to be shown separately due to their nature or incidence.
(q) Financial Instruments:
(I) Financial assets
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, plus, in the case of
financial assets not at fair value through profit or loss directly attributable transaction costs.
Transaction costs of financial assets carried at fair value through profit or loss are expensed in the
Statement of Profit and Loss. However, trade receivables that do not contain a significant financing
component are measured at transaction price.
Classification
• Cash and Cash Equivalents - Cash comprises cash 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 investments that are readily convertible into known amounts
of cash and which are subject to insignificant risk of changes in value.
• Debt Instruments - The Company classifies its debt instruments as subsequently measured at
amortised cost, 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.
• Equity Instruments - The Company subsequently measures all equity investments (other than the
investment in subsidiaries, joint ventures and associates which are measured at cost) at fair value.
Where the Company has elected to present fair value gains and losses on equity investments in
Other Comprehensive Income (“FVOCI”), there is no subsequent reclassification of fair value
gains and losses to profit or loss. 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.
The Company has made an irrevocable election to present in Other Comprehensive Income
subsequent changes in the fair value of equity investments that are not held for trading.
When the equity investment is derecognised, the cumulative gain or loss previously recognised in
Other Comprehensive Income is reclassified from Other Comprehensive Income to the Retained
Earnings directly.
' Interest
Interest income is accrued on a time proportion basis using the effective interest rate method.
Dividend
Dividend income is recognised when the Company's right to receive the amount 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 continuing involvement in the financial asset.
(II) 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, plus, in the case of financial liabilities not at
fair value, through profit or loss directly attributable transaction costs.
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.
Equity instruments
An equity instrument is any contract that evidences a residual interest in the assets of an entity after
deducting all of its liabilities. Equity instruments issued by the Company are recognised at the
proceeds received, net of direct issue costs.
(III) Impairment of financial assets
The Company assesses, at each reporting date, whether a financial asset or a group of financial assets
is impaired. Ind AS 109 on Financial Instruments, requires expected credit losses to be measured
through a loss allowance. For trade receivables only, the Company recognises expected lifetime losses
using the simplified approach permitted by Ind AS 109, from initial recognition of the receivables.
For other financial assets (not being equity instruments or debt instruments measured subsequently at
FVTPL) the expected credit losses are measured at the 12 month expected credit losses or an amount
equal to the lifetime expected credit losses if there has been a significant increase in credit risk since
initial recognition.
Note 3: Recent accounting pronouncements
( i) New and amended standards adopted by the Company:
The Company has applied the following amendments for the first time for their annual reporting period
commencing April 1, 2025:
Ind AS 21 - The Effects of Changes in Foreign Exchange Rates
In May 2025, the Ministry of Corporate Affairs (MCA) notified amendments to Ind AS 21 - The Effects
of Changes in Foreign Exchange Rates, applicable for annual periods beginning on or after April 1, 2025.
The amendment introduces a new framework for assessing whether a currency is exchangeable into
another currency and provides guidance when exchangeability is lacking.
The Company has reviewed the amendment and based on its evaluation has determined that it does not
have any significant impact in its financial statements.
In August 2025, the MCA notified the following amendments:
• Ind AS 1 - Presentation of Financial Statements (applicable w.e.f. April 1, 2025)
The amendment relates to classification of liabilities as current or non-current and non-current
liabilities with covenants. In the context of classifying a liability as current, it removes the requirement
of existence of a right to defer settlement for at least 12 months after the reporting date and instead
requires that the said right should exist on the reporting date and have substance. The amendment
also introduces guidance on classification of liabilities with covenants.
Based on the Company's assessment, the Company has no impact of these amendments in its
classification criteria of current and non-current liabilities.
• Ind AS 7 - Statement of Cash Flows and Ind AS 107 - Financial Instruments: Disclosures
(applicable w.e.f. April 1, 2025)
The amendment in Ind AS 7 requires to inform users of financial statements of the existence of
supplier finance arrangements and explain the nature of the arrangements, the carrying amount of
liabilities and the range of payment due dates. Ind AS 107 has been amended to add supplier finance
arrangements as a factor that may cause concentration of liquidity risk.
The Company has reviewed the amendment and based on its evaluation has determined that it does
not have any significant impact in its financial statements.
• Ind AS 12 - International Tax Reform - Pillar Two Model Rules (applicable immediately)
The amendments provide a temporary mandatory relief from deferred tax accounting for top-up tax
and disclose that they have applied the relief. This relief is immediate and applies retrospectively.
(ii) New Standards/Amendments notified but not yet effective:
Ministry of Corporate Affairs (“MCA”) notifies new standards or amendments to the existing standards
under Companies (Indian Accounting Standards) Rules as issued from time to time. During the year
ended March 31, 2026, MCA has not notified any other new standards or amendments to the existing
standards applicable to the Company.
On November 21, 2025, the Government of India notified the four Labour Codes - the Code on Wages, 2019, the
Industrial Relations Code, 2020, the Code on Social Security, 2020, and the Occupational Safety, Health and
Working Conditions Code, 2020 - consolidating 29 existing labour laws. The Ministry of Labour & Employment
published draft Central Rules and FAQs to enable assessment of the financial impact due to changes in regulations.
The Company has assessed and accounted the incremental impact of these changes, consistent with the Labour
Codes, draft rules, FAQs and on the basis of the best information available. Considering the regulatory-driven and
non-recurring nature, the impact amounting to INR 13.34 lakhs has been disclosed under Exceptional Items in the
financial results for the year ended March 31, 2026. The Company continues to monitor the finalisation of Central /
State Rules and clarifications from the Government on other aspects of the Labour Code and would provide
appropriate accounting effect on the basis of such developments as needed.
Note 31: Contingencies and Commitments
Contingent Liabilities (To the extent not provided for):
a) On account of other disputes in respect of:
i. Sales tax: ' 36.27 Lakhs (previous year: ' 36.27 Lakhs)
b) Others claims/ litigation against the Company not acknowledged as Debt
Management is generally unable to reasonably estimate a range of possible loss for proceedings or disputes
other than those included in the estimate above, including where:
(i) plaintiffs / parties have not claimed an amount of money damages, unless management can otherwise
determine an appropriate amount;
(ii) the proceedings are in early stages;
(iii) there is uncertainty as to the outcome of pending appeals or motions or negotiations;
(iv) there are significant factual issues to be resolved; and/or there are novel legal issues presented.
The Company’s management does not believe, based on currently available information, that the outcomes
of the above matters will have a material adverse effect on the Company’s financial statements, though the
outcomes could be material to the Company’s operating results for any particular period, depending, in part,
upon the operating results for such period. It is not practicable for the Company to estimate the timings of
cash flows, if any, in respect of the above.
Capital Commitments
Estimated amount of contracts remaining to be executed on capital account net of capital advances and not
provided for is ' 130.19 Lakhs (Previous year - ' 3,186.07 Lakhs).
Note 32: Segment Reporting
The Company’s only business being hoteliering, disclosure of segment-wise information is not applicable under
Ind AS108 - ‘Operating Segments’ (Ind AS-108). There is no geographical segment to be reported since all the
operations are undertaken in India. Refer Note No. 41 for Company's Disaggregated Revenue by the type of
revenue stream.
Exposure to Risks:
These plans typically expose the Company to actuarial risks such as: interest rate risk, longevity risk and salary risk.
Investment Risk: The present value of the defined benefit plan liability is calculated using a discount rate which is
determined by reference to government security yields prevailing as at the Balance Sheet date. If the return on plan
asset is below this rate, it will create a plan deficit. The current plan has made investments in special deposit schemes of
banks & FDRs. Due to the long-term nature of the plan liabilities, the Trustees of the Fund consider it appropriate to
invest funds in the bank FDRs.
Interest risk: A decrease in the Government Securities (G-Sec Bonds) interest rate will increase the plan liability.
Longevity risk: The present value of the defined benefit plan liability is calculated by reference to the best estimate of
the mortality of plan participants during their employment. An increase in the life expectancy of the plan participants
will increase the plan's liability.
Salary risk: The present value of the defined benefit plan liability is calculated by reference to the future salaries of
plan participants. As such, an increase in the salary of the plan participants will increase the plan's liability.
(a) Financial Risk Management
The Company's Board of Directors has 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 Company's activities. The
Company's Audit Committee oversees 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. The Audit Committee is assisted in its
oversight role by internal audit team. Internal audit team undertakes both regular and ad hoc reviews
of risk management controls and procedures, the results of which are reported to the audit committee.
The Company has exposure to the following risks arising from financial instruments:
(b) Market risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate
because of changes in market prices. Such changes in the values of financial instruments may result from
changes in the foreign currency exchange rates, interest rates, credit, liquidity and other market changes.
The predominant currency of the company revenue and operating cash flows is the Indian Rupees. A few
of the Company's reported trade payables have exposure to payables held in US dollars. Movements in
foreign exchange rates can affect the Company's reported profits and net assets, however, the said impact
is not material. The company does not have any investments, hence, price risk is not applicable.
(c) Credit risk
Credit risk arises from the possibility that customers or counterparty to financial instruments may not be
able to meet their obligations. To manage this, the Company periodically assesses the financial reliability
of customers, taking into account the financial condition, current economic trends, analysis of historical
bad debts and ageing of accounts receivable. Credit risks arises from cash and cash equivalents, deposits
with banks, financial institutions and others, as well as credit exposures to customers, including
outstanding receivables.
The Company's policy is to place cash and cash equivalents and short term deposits with reputable banks
and financial institutions.
The Company has established a credit policy under which each new customer is analysed individually for
creditworthiness before entering into contract. Credit limits are established for each customer, reviewed
regularly and any sales exceeding those limits require approval from the appropriate authority. There are
no significant concentrations of credit risk within the Company. The carrying amount of trade receivable
(net of impairment) was ' 555.86 Lakhs and ' 403.91 Lakhs as at March 31, 2026 and 2025
respectively.
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer
contract, leading to a financial loss. The Company is exposed to credit risk from its operating activities (primarily trade
receivables) and deposits with banks, financial institutions and others. The company’s policy is to place cash and cash
equivalents and short term deposits with reputable banks and financial institutions. During the year, following
provisions for doubtful debts has been made (reversed):
Trade receivables
Customer credit risk is managed as per the Company’s established policy, procedures and control relating to customer
credit risk management. Credit quality of a customer is assessed based on a credit rating scorecard and individual credit
limits are defined in accordance with this assessment. Outstanding customer receivables are regularly monitored.
The company follows 'simplified approach' for recognition of impairment loss allowance on trade receivables
which do not contain a significant financing component. The application of simplified appr oach does not require
the company to track changes in credit risk, rather it recognises impairment loss allowance based on life time
expected credit loss at each balance sheet date, since its initial recognition.
An impairment analysis is performed at each reporting date on an individual basis for major clients. The
Company does not hold collateral as security. The company evaluates the concentration of risk with respect to
trade receivables as low.
(d) Financial instruments and cash deposits
Credit risk from balances with banks and financial institutions is managed by the Company’s finance
department in accordance with the Company’s policy. Investments of surplus funds are made only with
approved counterparties and within credit limits assigned to each counterparty. Counterparty credit limits
are reviewed by the Company’s management on an annual basis, and may be updated throughout the year.
The limits are set to minimise the concentration of risks and therefore mitigate financial loss through
counterparty’s potential failure to make payments.
(e) Liquidity risk
Liquidity risk refers to the risk that the Company cannot meet its financial obligations. The objective of
liquidity risk management is to maintain sufficient liquidity and ensure that funds are available for use as per
requirements. Also, the company has an WCDL/ overdraft facility from a bank of which details are mentioned
below. The balance of borrowings at year end is Nil.
Note 40: Guarantees given and FDRs under Lien
The company has given Bank Guarantees of ? 3.00 lakhs (PY - ? 3.00 lakhs) to various government authorities &
other parties for registrations and business purposes. These guarantees were secured against Fixed Deposits of
? 6.54 lakhs (PY - ? 6.51 lakhs) with the bank, with a lien created on the same. The amount of fixed deposits is
reported without accrued interest as of the reporting period.
The company has given Fixed Deposits of ? 7.69 lakhs, the lien created is INR 6.25 lakhs, (PY - FDR - ? 7.69
lakhs, lien of INR 6.25 lakhs) to various government authorities & other parties for registrations and business
purposes. The amount of fixed deposits is reported without accrued interest as of the reporting period.
Note 45: Other Statutory Information:
i. Details of Benami Property held
No proceedings have been initiated on or are pending against the company for holding benami property
under the Benami Transactions (Prohibition) Act, 1988 (45 of 1988) and Rules made thereunder.
ii. Wilful Defaulter
The company has not been declared Wilful defaulter by any bank or financial institution or government or
any government authority.
iii. Compliance with number of layers of companies
The company has complied with the number of layers prescribed under the Companies Act, 2013.
iv. Compliance with approved scheme(s) of arrangements
The company has not entered into any scheme of arrangement which has an accounting impact on current
or previous financial year.
v. Loans to promoters, directors, KMPs and other Related Parties
During the year, the Company has not granted any loans or advances in the nature of loans to promoters,
directors, KMPs, and the related parties (as defined under the Companies Act, 2013), either severally or
jointly with any other person that are either:
(a) repayable on demand or
(b) without specifying any terms or period of repayment.
vi. Loans and Advances
A. The company has not advanced or loaned or invested funds to any other person(s) or entity(ies),
including foreign entities (Intermediaries) with the understanding that the Intermediary shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the company (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like to or on behalf of the ultimate beneficiaries.
B. The company has not received any fund from any person(s) or entity(ies), including foreign entities
(Funding Party) with the understanding (whether recorded in writing or otherwise) that the company
shall:
a. directly or indirectly lend or invest in other persons or entities identified in any manner whatsoever
by or on behalf of the Funding Party (Ultimate Beneficiaries) or
b. provide any guarantee, security or the like on behalf of the ultimate beneficiaries.
vii. Undisclosed income
The company does not have any such transaction which is not recorded in the books of accounts that has
been surrendered or disclosed as income during the year in the tax assessments under the Income Tax Act,
1961 (such as, search or survey or any other relevant provision of the Income Tax Act, 1961).
viii. Details of Crypto currency or Virtual currency
The company has not traded or invested in crypto currency or virtual currency during the current or
previous year.
ix. Valuation of PP&E, intangible asset and investment property
The company has not revalued its property, plant and equipment (including right of use assets) or intangible
assets or both during the current or previous year.
x. Registration of charges or satisfaction with Registrar of Companies:
The Company is not required to register any charge and also not required to file any satisfaction of charges
during the year with the Registrar of Companies. Hence, this is not applicable.
Note 45: Other Statutory Information (Contd.)
xi. Title deeds
The title deeds of all the immovable properties (other than properties where the company is the lessee and
the lease agreements are duly executed in favour of the lessee) disclosed in the financial statements are held
in the name of the company.
xii. Fair Valuation of Investment Properties
The Company does not hold any investment property and hence the disclosure on fair valuation of
investment property is not applicable to the Company.
xiii. Returns to Banks
During the year, the Company has obtained sanction of an Overdraft/ Working Capital Demand Facility
from banks on the basis of the security of current assets. As per the sanction terms, submission of quarterly
certified statements of current assets is required only in case of utilisation of the sanctioned limits. Since the
Company has not utilised the overdraft facility during the year, no such statements were required to be
submitted. Hence, this is not applicable.
xiv. Transactions with Struck off Companies
There are no transactions with companies struck off under section 248 of the Companies Act, 2013 or
section 560 of Companies Act, 1956.
Note 46:
There are no financial liabilities and assets that are set off as at 31st March 2026 and 31st March 2025.
Note 47: Dividends
The dividends paid during the fiscal year 2026 represent an amount of ' 325 lakhs @ ' 25 per equity share
towards dividend for fiscal 2026.
The dividends declared by Benares Hotels Limited are in Indian Rupees and are based on the profits available for
distribution as reported in the statutory financial statements of Benares Hotels Limited. Subsequent to March
31, 2026, the Board of Directors of Benares Hotels Limited have proposed a dividend of ' 25 per share in
respect of fiscal 2026. The proposal is subject to the approval of shareholders at the Annual General Meeting,
and if approved, would result in a cash outflow of approximately ' 325 lakhs.
Note 48: Capital Management
The Company manages its capital to ensure that it will be able to continue as a going concern through a
judicious mix for short term and long term sources. The structure is managed to maintain an investment grade
credit rating, to provide ongoing returns to 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 (including ‘current and non-current term loans’ as shown in the balance sheet) less cash and cash
equivalents and Current Investment.
The Company has borrowings of ? Nil lakhs (previous year: ? Nil lakhs) and Net Debts of ? Nil lakhs (previous
year: ? Nil lakhs) as at the end of the reporting period. Accordingly, the Company has Nil gearing ratio (Net
Debt/ Total Equity) as at 31- Mar -2026 and 31- Mar -2025.
Note 49: Others
The Company has completed a greenfield implementation of SAP S/4HANA RISE effective April 1, 2025 and
migrated from its legacy accounting system. During the hypercare period, post go live, certain privileged users
were granted access to transactional data to support and stabilise the application, including monitoring system
integrations and accounting transactions. Such access was granted and used under Company’s supervision and
was progressively withdrawn by June 26, 2025 once system stability was achieved.
The feature of recording audit trail (edit log) facility has been activated in SAP S/4HANA RISE and has
operated effectively throughout the year for all relevant transactions recorded in the software.
Additionally, the audit trail has been preserved by the Company as per the statutory requirements for record
retention.
Note 50: Events Occurring After The Balance Sheet Date
There are no adjusting events occurring after the balance sheet date for the financial year 2025-26.
Note 51:
The disclosure required to be made in terms of Schedule V of SEBI (Listing Obligation And Disclosure
Requirement) 2015 is not applicable to the company.
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