2.6 Provisions, contingent liabilities and contingent assets
Provisions are recognised when the Company has a present obligation (legal or constructive) as a result of a past
event and it is probable that an outflow of resources, that can be reliably estimated, will be required to settle such
an obligation.
If the effect of the time value of money is material, provisions are determined by discounting the expected future
cash flows to net present value using an appropriate pre-tax discount rate that reflects current market
assessments of the time value of money and, where appropriate, the risks specific to the liability. Unwinding of
the discount is recognised in the Statement of Profit and Loss as a finance cost. Provisions are reviewed at each
reporting date and are adjusted to reflect the current best estimate.
A present obligation that arises from past events where it is either not probable that an outflow of resources will
be required to settle or a reliable estimate of the amount cannot be made, is disclosed as a contingent liability.
Contingent liabilities are also disclosed when there is a possible obligation arising from past events, the existence
of which will be confirmed only by the occurrence or non -occurrence of one or more uncertain future events not
wholly within the control of the Company.
Claims against the Company where the possibility of any outflow of resources in settlement is remote, are not
disclosed as contingent liabilities.
Contingent assets are not recognised in financial statements since this may result in the recognition of income that
may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a
contingent asset and is recognised.
2.7 Earning per share
Basic earning per share is calculated by dividing the net profit or loss for the year attributable to the equity
shareholders (after deducting preference dividends and attributable taxes) by the weighted average number of
equity shares outstanding during the year.
For the purpose of calculating the 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 are adjusted for
the effects of all dilutive potential equity shares. The dilutive potential equity shares are deemed converted as at
beginning of the period, unless they have been issued at a later date.
2.8 Employee Retirement benefits
i) Short term employee benefits
All employee benefits payable/available within twelve months of rendering the service are classified as
short term employee benefits. Benefits such as salaries, wages and bonus etc., are recognised in the statement
of profit and loss in the period in which the employee renders the related service.
ii) Post - employment benefits
Defined contribution plans -
Retirement benefits in the form of provident fund is a defined contribution scheme. The company has no
obligation, other than the contribution payable to the provident fund. Payments to defined contribution
plans are recognised as an expense when employees have rendered service entitling them to the
contributions.
iii) Long - term employee benefits
Leave Encashment
The liability of accumulating compensated absences is determined by actuarial valuation performed by an
independent actuary at each balance sheet date using projected unit credit method.
2.9 Segment Reporting
The company operates in one reportable business segment i.e. “Hospitality".
3.0 Cash and cash equivalents
Cash and cash equivalents in the Balance Sheet comprise cash at bank and in hand and short-term deposits with
banks that are readily convertible into cash which are subject to insignificant risk of changes in value and are held
for the purpose of meeting short-term cash commitments.
26 EXCEPTIONAL ITEMS
(i) On account of default in repayment of term loan by the Company, the Mortgager ("IFCI Ltd." or "IFCI") initiated
recovery proceeding under SARFAESI Act, 2002 against the Company and auctioned the hotel property named as
'Park Hyatt Goa Resort & Spa' ("Hotel") for an amount of '515.44 crores. Vide order dated March 19, 2018, the
Hon'ble Supreme Court directed the Company to handover the possession of the Hotel to the Auction Purchaser,
within a period of six months, which stood complied by the Company on September 19, 2018.
(ii) Out of the entire auction consideration for the sum of '515.44 crores, the IFCI Ltd. immediately appropriated its loan
amounts with interest to the extent of '311.71 crores on 23.02.2015 and transferred the sum of '8.52 crores to the State
Bank of Mysore towards its working capital facility to the company. IFCI also released the sum of '126.78 crores to
SEBI towards their claims of principal amount and interest etc. of PACL NCD A/c.
(iii) The balance sum of '85 crores plus interest has been retained by IFCI, in an FDR and has been claimed by the
Company in its capacity as the owner and beneficiary of the remaining auction proceeds.
(iv) SEBI has also made the claim over the said sum of '85 crores from IFCI Ltd., without any documentary support and
basis and has sought a direction by filing an Interim Application before the Hon'ble Supreme Court, which is being
duly contested by the Company, and the dispute over claim of the sum of '85 crores with interest by the respective
parties is pending adjudication before the Hon'ble Supreme Court.
(v) In the meanwhile, before handing over the possession of the Hotel property to the Auction Purchaser, the Company
has also availed its right to redeem the Hotel property u/s 60 of the Transfer of Property Act, 1882, by giving
appropriate Notice to IFCI Ltd. and the Auction Purchaser, and under the given circumstances, during the reporting
year, the Company has accounted for the sale of the Hotel property in its financial books. A Writ Petition preferred in
this regard by the Company against IFCI Ltd. and the Auction Purchaser seeking redemption of the Hotel property
is pending adjudication before the Hon'ble High Court of Bombay, Goa Bench.
(vi) The outcome of the Writ Petition pending before the Hon'ble High Court of Bombay, Goa Bench and the claim of
'85 crores by the Company pending adjudication before the Hon'ble Supreme Court may have the material impact
on the Company as a going concern, besides impacting the alleged sale of the Hotel property, at Goa.
(vii) As per letter dated 6th February, 2019 received from IFCI, they have appropriated the proceeds of alleged sale
consideration of '515.44 crore against Hotel Property, Park Hyatt Goa as under:
b) In the opinion of directors, all the assets, except stated otherwise, have a value on realization in the ordinary course
of business at least equal to the amount at which they are stated in the books of accounts and the provision for
depreciation and for all known liabilities is adequate and considered reasonable.
c) Balances of trade receivables, trade payables, current/ non-current advances given/ received, amount recoverable
from parties are subject to reconciliation and confirmation from respective parties.
d) Previous year figures have been regrouped and rearranged wherever necessary to suit the present year layout by
making the suitable adjustment in the respective accounting heads.
e) Finance cost represents provision for dividend on cumulative redeemable preference shares.
f) In terms of direction issued by Hon'ble High Court Delhi, the company will remain committed for the refund to
space buyers. (Refer Note No. 15(i) )
g) The Company has not paid the dividend on its Cumulative Redeemable Preference Shares and has also defaulted on
the repayment of the 10% instalment due on these shares. This default has occurred due to the non-availability of
sufficient profits during the financial year. The Company will address these obligations as soon as financial
conditions permit, and the required profits are available.
27. OTHERS SIGNIFICANT DISCLOSURES
a) Due to delay in execution of project by SRHIPL and consequent default by the Company in debt servicing, IFCI
initiated recovery proceeding under SARFAESI Act, 2002, against the company and allegedly sold the Hotel Park
Hyatt, Goa for an amount of '515.44 Crores. On 19.03.2018 Hon'ble Supreme Court of India ordered the Company to
handover the possession of the hotel property to the auction purchaser within a period of six months. In compliance
of Hon'ble Supreme Court order, the company has handed over the possession of the property Park Hyatt Goa
Resort & Spa to the auction purchaser on 19.09.2018. However, the Company availed its Right to Redeem the
property u/s 60 of the Transfer of Property Act, 1882 by giving notice to IFCI on 07.09.2018, before handing over the
property. The Writ Petition for Redemption of the property is pending adjudication at the High Court of Bombay at
Goa. The outcome of the writ petition may have the material impact on the company as a going concern and may
impact the alleged sale of hotel property at Goa.
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