OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion is intended to convey the managements perspective on our financial condition and results of operations for Fiscals 2023, 2022 and 2021. We have included in this section a discussion of our financial statements on a restated consolidated basis as well as on a proforma basis.
Some of the information in the following section, including information with respect to our plans and strategies, contains forward-looking statements that involve risks and uncertainties. Investors should read "ForwardLooking Statements" on page 18 for a discussion of the risks and uncertainties related to those statements and "Risk Factors " on page 26 for a discussion of certain factors that may affect our business, financial condition or results ofoperations. Our actual results may differ materially from those expressed in or implied by these forwardlooking statements. Our fiscal year ends on March 31 of each year, and references to a particular Fiscal are to the 12 months ended March 31 of that year. Unless otherwise indicated, or if the context requires otherwise, the financial information included herein is based on our Restated Consolidated Financial Information for Fiscals 2023, 2022 and 2021 included in this Draft Red Herring Prospectus. For further information, see "Financial Information " on page 243. We have also included various operational and financial performance metrics in this Draft Red Herring Prospectus, some of which have not been derived from the Restated Consolidated Financial Information. The manner of calculation and presentation of some of the operational and financial performance metrics, and the assumptions and estimates used in such calculations, may vary from that used by other companies in India and other jurisdictions.
Unless otherwise indicated, or if the context otherwise requires, in this section, references to "the Company" or "our Company" are to Juniper Hotels Limited on a standalone basis, and references to "the Group", "we", "us", "our", are to Juniper Hotels Limited and its Subsidiaries, on a consolidated basis. However, for the purpose of operational information for the three months ended June 30, 2023 and Fiscals 2023, 2022 and 2021, andfinancial information derivedfrom the Restated Consolidated Financial Information for each of the Fiscals 2023, 2022 and 2021, subsidiaries would mean only Mahima Holding Private Limited and references to "the Group", "we", "us", "our" should be construed accordingly. We acquired 100% of the equity capital of Chartered Hotels Private Limited on September 20, 2023 and thus as on the date of this Draft Red Herring Prospectus, Chartered Hotels Private Limited is our wholly-owned subsidiary. Thus, we have also included in this Draft Red Herring Prospectus, the Proforma Financial Information as of and for the year ended March 31, 2023 to illustrate the impact of our acquisition of Chartered Hotels Private Limited on our restated consolidated summary statement of assets and liabilities as of March 31, 2023 as if the acquisition of CHPL had been consummated on March 31, 2023 and on our restated consolidated summary statement ofprofit and loss for the year ended March 31, 2023 as if the acquisition of CHPL had consummated on April 1, 2022. For further details, see "Financial Information - Proforma Financial Information " and "Risk Factors - Proforma Financial Information included in this Draft Red Herring Prospectus is presented for illustrative purposes only and may not accurately reflect our future financial condition, cash flows and results of operations " on pages 326 and 54, respectively.
Unless otherwise indicated, industry and market data used in this section have been derivedfrom the report titled "Industry Report - Luxury, Upper Upscale and Upscale Hotels" dated September 23, 2023 (the "Horwath Report") prepared and released by Horwath HTL India, which has been exclusively commissioned and paid for by us in connection with the Issue, pursuant to an engagement letter dated June 6, 2023. A copy of the Horwath Report is available on the website of our Company at https://juniperhotels.com/wp- content/uploads/2023/09/Industry-Report-Luxury- Upper- Upscale-and- Upscale-Hotels.pdf. The industry data included herein includes excerpts from the Horwath Report and may have been re-ordered by us for the purposes of presentation. There are no parts, data or information (which may be relevant for the proposed issue), that has been left out or changed in any manner. Unless otherwise indicated, financial, operational, industry and other related information derived from the Horwath Report and included herein with respect to any particular year refers to such information for the relevant calendar year. For more information, see "Risk Factors - Certain sections of this Draft Red Herring Prospectus disclose information from the Horwath Report which has been prepared exclusively for the Issue and commissioned and paid for by us exclusively in connection with the Issue and any reliance on such information for making an investment decision in the Issue is subject to inherent risks " on page 60. References to hotel and serviced apartments segments such as the "luxury segment", "upper upscale segment" and "upscale segment" in this section are references to industry segments and in accordance with the presentation, analysis and categorisation in the Horwath Report. Our segment reporting in our financial statements is based on the criteria set out in Ind AS 108, Operating Segments and we do not present such industry segments as financial segments.
Overview
We are a luxury hotel development and ownership company, and are the largest owner, by number of Keys of "Hyatt" affiliated hotels in India as of June 30, 2023. (source: Horwath Report) We have a portfolio of seven hotels and serviced apartments and operate a total of 1,836 keys as of the date of this Draft Red Herring Prospectus. We benefit from a unique and longstanding partnership of over 40 years between Saraf Hotels (including erstwhile and current affiliates, collectively referred to as the "Saraf Group"), a hotel developer with a strong and well established track record in India, and affiliates of a globally recognized premier hospitality brand, Hyatt Hotels Corporation (NYSE: H) ("HHC") (collectively with its affiliates "Hyatt"). We are the only hotel development company in India with which Hyatt has a strategic investment. We own 20% of Hyatt group affiliated hotel rooms in India as on June 30, 2023 (source: Horwath Report) and have extensive experience in identifying opportunities in hospitality destinations, developing high-end hotels in these locations and nurturing them through active asset management. We are also focused on providing quality guest experience, while operating our assets efficiently.
Our hotels and serviced apartments are present across the luxury, upper upscale and upscale category of hotels and are established landmarks in Mumbai, Delhi, Ahmedabad, Lucknow, Raipur and Hampi. Besides Grand Hyatt Mumbai Hotel and Residences being the largest hotel in India, the Hyatt Regency Lucknow and Hyatt Regency Ahmedabad are the largest upper upscale hotels in their respective markets and Hyatt Raipur is the only upper upscale hotel in Raipur(source: Horwath Report).
Our Company is jointly held by Saraf Hotels and its affiliate, Juniper Investments and Two Seas Holdings (an indirect subsidiary of HHC). The partnership between our key stakeholders has been built over several decades. Saraf Group, led by Arun Kumar Saraf, have over 40 years of industry experience and have developed a number of hotels across South Asia. HHC is a global hospitality company with widely recognized, industry-leading brands and a tradition of innovation developed over 65 years, with a hotel portfolio consisting of 1,297 hotels and 311,171 rooms, across full service hotels and resorts, all-inclusive resorts, select service hotels, lifestyle hotels and other properties, as of June 30, 2023. We benefit from the experience of our key shareholders and are able to leverage their long-standing brand heritage, in-depth market understanding, operational experience, and the World of Hyatt loyalty program with over 40 million members as of June 30, 2023.
We currently own a portfolio of seven hotels and serviced apartments which are located across six strategic cities in India, comprising of established metro cities (Mumbai and Delhi), emerging business destinations (Ahmedabad, Lucknow and Raipur) and upcoming tourist destinations (Hampi), providing guest and geographic diversification. Our hotels and serviced apartments are classified under three distinct segments: (a) luxury - the Grand Hyatt Mumbai Hotel and Residences and Andaz Delhi; (b) upper upscale - the Hyatt Delhi Residences, Hyatt Regency Ahmedabad, Hyatt Regency Lucknow and Hyatt Raipur; and (c) upscale - Hyatt Place Hamp/ (source: Horwath Report). We have the largest aggregate inventory of upper tier branded serviced apartments in Mumbai and New Delhi among hotels owned by major private investors (source: Horwath Report). As of June 30, 2023, (a) the Grand Hyatt Mumbai Hotel and Residences had 665 keys, which represents approximately 13% of the total supply of 5.3k luxury room inventory in Mumbai, and (b) Andaz Delhi had 401 keys, which represents approximately 12% of the total supply of 3.3k luxury room inventory in New Delhi (source: Horwath Report). Our significant presence in New Delhi and Mumbai provides us with a strategic advantage from both international and domestic travel through these cities and the well-established business ecosystems. Ahmedabad is a hub for economic growth in Gujarat and Lucknow stands to benefit from the push for active investments in Uttar Pradesh. As of June 30, 2023, (a) the Hyatt Regency Ahmedabad had 211 keys, which represents approximately 26% of the total supply of 0.8k upper upscale inventory in Ahmedabad; and (b) the Hyatt Regency Lucknow had 206 keys, which represents approximately 52% of the total supply of 0.4k upper upscale inventory in Lucknow (source: Horwath Report). In Raipur, the Hyatt Raipur was established to benefit from the industrial growth in the capital city of Chhattisgarh, the resource rich state. The Hyatt Place Hampi was established to cater to tourists visiting the Hampi UNESCO World Heritage Site, as well as to business travelers visiting the nearby steel manufacturing facilities.
We identify and acquire sites to develop our hotels and serviced apartments, accounting for factors such as strategic location, economic potential of the location, target customers and branding. The Grand Hyatt Mumbai Hotel and Residences is located between the BKC (which is the business center of the city) and the Chhatrapati Shivaji Maharaj International Airport, situated in Mumbai. Similarly, Andaz Delhi and Hyatt Delhi Residences are strategically located at the Indira Gandhi International Airport hospitality district (Delhi Aerocity), between Gurgaon and New Delhi. Once we identify and acquire sites, our expertise in development allows us to move swiftly from a capital deployment phase to a revenue generation phase by making our assets operational.
Our Company is the flagship entity for the Saraf Group, through ownership of a unique portfolio of luxury, upper upscale and upscale hospitality assets, located in highly desirable locations across key strategic locations. Our continued strategy is to expand on our current ownership of marquee assets across India, bringing in more luxury and upscale hotels and serviced apartments into the portfolio, by consolidating the interests of Saraf Hotels and its affiliates in entities incorporated in India operating in the hospitality sector or through new opportunities, enhancing the Company as the flagship entity for the Saraf Group.
Significant Factors Affecting our Financial Condition and Results of Operations
Our results of operations are affected by a number of factors, the most significant of which are described below. General economic and market conditions
The demand for our hotel rooms is closely linked to the performance of the Indian economy and the tourism industry in India. Economic growth drives business travel as well as conferences, banquets and events whereas increase in tourism, both domestic and international, drives leisure travel and social events. Revenues from our F&B venues and MICE services are also dependent upon the number of customers (including foreign customers) visiting our F&B outlets, utilization of banquet space and rates for such services. Our business operations are generally sensitive to business and personal discretionary spending levels. In addition, the hospitality industry and the demand for hotel rooms is also affected by factors such as location, facilities and supporting infrastructure, service and price, travel advisories, fuel prices, worldwide health concerns, geo-political developments, natural disasters in the region and inflation. Increase in competition and local oversupply of hotel rooms, accommodation and venues for meetings and special events are also important factors.
In Fiscal 2021, the hospitality sector was impacted by the COVID-19 pandemic due to reduced traveller traffic and government-mandated restrictions on movement. Set out below is a graphical representation of the all-India quarterly performance for calendar years 2020 and 2021 reflecting the impact of COVID-19 on the hotel industry and the recovery momentum.
Consistent with the rest of the hotel sector, during the COVID-19 pandemic, we also witnessed a decline in our Average Occupancy across our portfolio of hotels and serviced apartments, with average occupancy at 34.23% and ARR at Rs5,656.77 in Fiscal 2021. However, the COVID-19 pandemic also brought to bear different features such as strong leisure demand that benefitted Hyatt Place Hampi (due to the increase in domestic travel); and strong revenues from our serviced apartments at the Grand Hyatt Mumbai Hotel and Residences (Source: Horwath Report). After the peak of the COVID-19 pandemic, our average occupancy increased to 53.76% in Fiscal 2022 and further to 75.74% in Fiscal 2023 and our ARRs increased to Rs6,221.98 in Fiscal 2022 and further to Rs9,875.12 in Fiscal 2023. Therefore, while we were impacted by the COVID-19 pandemic in Fiscal 2021, our Average Occupancy and ARRs have recovered in Fiscals 2022 and 2023.
In Fiscal 2022, India was the fifth largest global economy with a GDP at current prices of USD 3.18 trillion (Source: World Bank). Indias economy grew by 9% in Fiscal 2022, against a decline of 5.8% caused by the COVID-19 pandemic in Fiscal 2021 (Source: Central Statistics Office, GOI). The GDP growth for Fiscal 2023 is estimated at 7.2% (source: National Statistics Office, Ministry of Statistics & Programme Implementation, Govt of India), with the latest IMF estimates placing this at 6.8%. IMFs World Economic Outlook report (April 2023) forecasts Indias (a) GDP growth at 5.9% for Fiscal 2024, 6.3% for Fiscal 2025 and 6.2%, 6.1% and 6% for the following three years; and (b) per capita GDP to grow at 7.8% CAGR between Fiscal 2023 and Fiscal 2028. India is considered among the lead growth engines for the coming decade, in terms of GDP growth rate. (Source: Horwath Report) According to the Horwath Report, the hotel industry would likely benefit from increased individual incomes, which can often lead to additional discretionary spending, and we are poised to benefit from this.
Hotel Management Agreements
All of our hotels are managed by Hyatt India Consultancy Private Limited ("HICPL" or "Hotel Operator"). We enter into hotel operations service agreements with Hotel Operator in relation to each of our hotels, pursuant to which it provides day-to-day operations management assistance required to operate and manage our hotels. Hotel Operator has discretion in matters relating to operations of the hotels, including, charges for rooms, recruiting and hiring employees, establishing purchase policies for supplies, negotiating supply contracts, establishing employment policies, receipt, holding, and disbursement of funds, maintenance of bank accounts, procurement of inventories, supplies and services, and such other activities as are specifically provided for or otherwise reasonably necessary for the proper and efficient operations of the hotels. We also enter into trademarks license agreements with HIC in relation to each of our hotels. Pursuant to the terms of these agreements, HIC has agreed to license (on a non-exclusive, non-transferable, revocable limited license basis) certain trademarks to us, for use solely in relation to the operation of the relevant hotels for a stipulated license fee. The term of these hotel operations service agreements (as amended) range from 34 to 46 years. Upon expiry of the initial term, these agreements are also typically renewable for an additional 10 years, subject to mutual agreement of terms and conditions between us and Hyatt.
Under these arrangements, we are required to provide Hotel Operator with service fees which are a fixed percentage of the revenue of the relevant hotel and an incentive strategic fee linked to the gross operating profit of the relevant hotel, and HIC with a license fee which is typically a fixed percentage of the monthly revenue of the relevant hotel. In Fiscals 2023, 2022 and 2021, we incurred hotel operator management and other fees and charges of Rs292.70 million, Rs92.57 million and Rs33.28 million which were payable to the H otel Operator and HIC.
Diversified sources of revenue
We have focused on enhancing revenue contribution at our hotels from multiple revenue streams such as serviced apartments, F&B outlets, MICE facilities and renting out of commercial spaces.
Set out below are details of our revenue from each of our key offerings:
| Particulars | Fiscal | |||||
| 2023 | 2022 | 2021 | ||||
| (in r million) | % of total revenue from contracts with customers | (in r million | % of total revenue from contracts with customers | (in r million | % of total revenue from contracts with customers | |
| Hotel room revenue | 2,982.74 | 44.88% | 1,151.94 | 38.26% | 563.54 | 33.87% |
| Serviced apartments revenue | 820.14 | 12.34% | 547.91 | 18.20% | 419.51 | 25.22% |
| F&B Revenue* | 2,023.61 | 30.45% | 895.02 | 29.73% | 408.15 | 24.54% |
| Lease rentals | 338.61 | 5.09% | 240.51 | 7.99% | 200.54 | 12.06% |
| Other hospitality services | 481.03 | 7.24% | 175.17 | 5.82% | 71.77 | 4.31% |
| Total Revenue from contracts with customers | 6,646.13 | 100.00 | 3,010.55 | 100.00 | 1,663.51 | 100.00 |
* F&B Revenue is calculated as the sum of revenue from food and soft beverages and wines and liquor. F&B Revenue also includes revenue from F&B from banquet and MICE.
The strength of our diverse and complementary revenue sources was witnessed during the COVID-19 pandemic. While Average Occupancy had decreased due to travel and other restrictions, for instance, the average occupancy at our hotel, the Grand Hyatt Mumbai Hotel and Residences decreased by 64.70% in Fiscal 2021 from the previous year, Average Occupancy at our serviced apartments at the Grand Hyatt Mumbai Hotel and Residences and Hyatt Delhi Residences, remained strong, with a decrease in Average Occupancy (serviced apartments) by 26.06% and 9.42% in Fiscal 2021 from the previous year. Further, our F&B offerings are designed to provide a dining experience that caters to a broad demographic, and we believe that our F&B venues have developed a strong brand image and customer loyalty. We intend to include additional F&B venues and refurbish existing venues at our hotels, with a view to increasing our competitiveness and augmenting our F&B offerings for our guests. In addition to existing area, we intend to construct a dedicated commercial development adjacent to our existing hotel, which
we will rent to third parties, on a long-term basis. We believe that the development of our commercial real estate projects in proximity to our hotels will benefit MICE and assist in driving room occupancy. For further details, see "Our Business - Strategies - Development of new opportunities at our existing assets" on page 142.
According to the Horwath Report, the domestic sector has become a key demand generator, even prior to the pandemic, with leisure, recreation, weddings and MICE demand driving weekend and off-season occupancies and enabling hotels and resorts to achieve significantly higher occupancies. We are focused on ensuring that our hotels have sufficient space and facilities to capture this demand. For instance, we are in the process of adding a new ballroom at the Grand Hyatt Mumbai Hotel and Residences which we intend to use high-end social occasions (such as wedding receptions).
We believe that such diversification provides us with consistent revenue growth. This also assists us in our efforts to ensure consistent growth, despite high overhead costs experienced in the hospitality business.
Competition
The hospitality industry in India is intensely competitive and our hotels compete with large multinational and Indian companies, in the regions in which we operate. The success of our hotels will largely depend on our ability to compete in areas such as quality of accommodation and service, price, brand recognition, facilities and supporting infrastructure, location, ambience and the type and quality of F&B facilities and other amenities. Our competitors include other internationally branded hotels in the segments in which we operate. The level of competition in the hotel business is affected by various factors, including changes in local, regional and global economic conditions, changes in demography, the supply and demand for hospitality properties and changes in customer behavior and preferences. We may also need to evolve our offerings in order to compete with popular new hospitality services, operation formats, concepts or trends that emerge from time to time. Further, we are and intend to undertake upgradation / refurbishment of rooms, public areas and F&B outlets across multiple hotels in our portfolio including Grand Hyatt Mumbai Hotel and Residences, Andaz Delhi, Hyatt Regency Ahmedabad, Hyatt Raipur and Hyatt Place Hampi. For further details, see "Our Business - Strategies - Enhancement of facilities at our existing assets"" on page 141.
We may also have to compete with new hotel properties that commence operations in the areas in which we operate. Any new supply of hotels in a particular location may also affect our ability to increase rates charged to customers at our hotels. Our ability to capture the expected growth in tourism and the hospitality industry in the areas where our hotels are located, and ability to respond to competition in the hospitality industry will be critical to our results of operations in future.
Government Regulations and Policies
We are subject to significant governmental regulation in relation to the ownership and development of our hotels. We are also subject to a variety of national, state and local laws and regulations relating to environmental laws in connection with our hotels. Laws which are applicable during the development of our hotels, include standards relating to land acquisition, the ratio of built-up area to land area, land usage, water supply, sewage disposal systems, electricity supply and environmental suitability. Further, approval of development plans is conditioned on, among other things, completion of the acquisition of the site and compliance with relevant conditions.
Further, under the Hazardous and Other Wastes (Management and Transboundary Movement), Rules, 2016, the occupier or operator of the property may be held liable for damages caused to the environment or third party due to improper handling and management of the hazardous and other waste. The costs of investigating or remediating contamination, at our properties or at properties where we sent substances or wastes for disposal, may be substantial.
In addition, government regulations and policies of India, can also impact the demand for, expenses related to and availability of our hotel services and rooms. We are also subject to laws, which are periodically amended, including relating to the sale and service of food, alcoholic and non-alcoholic beverages and hosting of events and weddings at our hotels. These laws and policies can be extensive and any amendments thereto would require adequate time for implementation, result in increased costs and other burdens. The extensive regulatory structure within which we operate may constrain our flexibility to respond to market conditions, competition or changes in our cost structure, which could have an adverse effect on our business and prospects.
Description of key metrics of operating performance
We use various financial and operational parameters to monitor the financial condition and operating performance of our hotels. Certain statistical and comparative data that is commonly used within the hospitality industry to evaluate a hotels financial and operating performance, and which we use to measure the performance of our hotels include:
• Average Room Rate ("ARR"): ARR represents the room and serviced apartments revenues during a given period/year divided by total number of room and serviced apartments nights sold in that period/year. ARR measures the average room price attained by a hotel and ARR trends provide meaningful information relating to pricing policies and the nature of the guest base of a hotel. Any changes in ARR may have an impact on overall revenues and profitability.
• Average Occupancy: Average Occupancy (hotels and serviced apartments) is calculated as total room and serviced apartment nights sold during a relevant period/year divided by the total available room and serviced apartment nights during the same period/year and is a measure of our revenue generation capabilities over a period of time. Occupancy measures the utilization of our hotels available capacity. We use occupancy to gauge demand at our hotels in a given period. Occupancy levels also help us determine achievable ARR levels as demand for hotel rooms increase or decrease.
• Revenue Per Available Room ("RevPAR"): RevPAR represents the room and serviced apartments revenues during a given period/year divided by the total number of rooms and serviced apartments nights available in that period/year. RevPAR does not include other ancillary, non-room revenues, such as telecommunication and internet services, laundry services, business center services, spa services, limousine services and service charge on rooms and services. RevPAR is a meaningful indicator of our performance as it provides a metric correlated to two primary and key drivers of operations at a hotel, i.e., Average Occupancy and ARR.
RevPAR changes that are driven predominately by occupancy have different implications for overall revenue levels and hotel operating profit, compared with changes driven primarily by ARR. For instance, an increase in occupancy at a hotel would lead to increases in room revenues, as well as incremental operating costs (including, but not limited to, housekeeping services, utilities and room amenity costs). An increase in RevPAR due to higher ARR, however, would generally not result in additional operating costs (with the exception of those charged or incurred as a percentage of revenue, such as distribution costs or credit card fees). As a result, changes in RevPAR driven by increases or decreases in ARR generally have a greater effect on operating profitability than changes in RevPAR driven by occupancy levels.
Set out below are details of these key metrics of operating performance for the years indicated.
| Particulars | Fiscal | ||
| 2023 | 2022 | 2021 | |
| ARR (in Rs) | 9,875.12 | 6,221.98 | 5,656.77 |
| Average Occupancy (%) | 75.74% | 53.76% | 34.23% |
| RevPAR (in Rs) | 7,479.43 | 3,344.84 | 1,936.22 |
Presentation of Financial Information
The Restated Consolidated Financial Information comprises the restated consolidated summary statement of assets and liabilities as at March 31, 2023, 2022 and 2021, the restated consolidated summary statements of profit and loss (including other comprehensive income), the restated consolidated summary statements of changes in equity and the restated consolidated summary statement of cash flows for the years ended March 31, 2021, 2022 and 2023, and the summary of significant accounting policies, and explanatory information (collectively, the "Restated Consolidated Financial Information").
Significant Accounting Policies
Summary of Significant Accounting Policies
Set out below is a summary of the summary of significant accounting policies for the Restated Consolidated Financial Statements.
A. Revenue
Revenue from contracts with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services.
Income from Rooms, Food and Beverage: Revenue is recognized at the transaction price that is allocated to the performance obligation. Revenue includes room revenue, food and beverage sale which is recognized once the rooms are occupied, food and beverages are sold as per the contract with the customer.
Lease Rentals: Lease Rentals comprise rental revenue earned from letting of spaces for retails and offices located within the properties and also include income from banquets and events. Lease rentals from operating leases where the Group is a lessor is recognised on a straight-line basis over the noncancellable period of the lease contract.
Other hospitality services: In relation to laundry income, communication income, health club income, airport transfers income and other allied services, the revenue has been recognized by reference to the time of service rendered.
Dividend and Interest income: Dividend income is recognised when the right to receive payment is established. Interest income is recognised using the effective interest method.
B. Contract Balances
Contract assets
A contract asset is the right to consideration in exchange for goods or services transferred to the customer. If the Group performs by transferring goods or services to a customer before the customer pays consideration or before payment is due, a contract asset is recognised for the earned consideration that is conditional.
The amount recognised as contract assets is reclassified to trade receivables once the amounts are billed to the customer as per the terms of the contract.
Trade receivables
A receivable represents the Groups right to an amount of consideration that is unconditional (i.e., only the passage of time is required before payment of the consideration is due). Refer to accounting policies of financial assets in section financial instruments initial recognition and subsequent measurement.
Contract liabilities
A contract liability is the obligation to transfer goods or services to a customer for which the Group has received consideration (or an amount of consideration is due) from the customer. If a customer pays consideration before the Group transfers goods or services to the customer, a contract liability is recognised when the payment is made, or the payment is due (whichever is earlier). Contract liabilities are recognised as revenue when the Group performs under the contract.
C. Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either:
(i) In the principal market for the asset or liability, or
(ii) In the absence of a principal market, in the most advantageous market for the asset or liability
The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participants ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs.
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1 Quoted (unadjusted) market prices in active markets for identical assets or liabilities.
Level 2 Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable.
Level 3 Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable.
For assets and liabilities that are recognised in the financial statements on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categorisation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period.
D. Employee Benefits
Post-employment benefits costs and termination benefits
(i) Defined Contribution Plans
The Groups contribution to provident fund, employees state insurance scheme and labor welfare fund are considered as Defined Contribution Plan and are charged as expense based on the amount of contribution required to be made as and when services are rendered by the employees.
(ii) Defined Benefit Plans
The Groups liabilities towards gratuity are determined using the projected unit credit method, with actuarial valuation being carried out at the end of each annual reporting period. Remeasurement, comprising actuarial gains and losses and the return on plan assets (excluding net interest), is reflected immediately in the Balance Sheet with a charge or credit recognised in other comprehensive income in the period in which they occur. Re-measurement recognised in other comprehensive income is reflected immediately in retained earnings and will not be reclassified to the statement of profit and loss. Past service cost is recognised in the statement of profit and loss in the period of a plan amendment. Net interest is calculated by applying the discount rate at the beginning of the period to the net defined benefit liability or asset. Defined benefit costs are categorised as follows: •
• Service cost (including current service cost, past service cost, as well as gains and losses on curtailments and settlements);
• Net interest expense or income; and
• Remeasurement
The Group presents the first two components of defined benefit costs in the statement of profit and loss in the line "employee benefits expenses". Curtailment gains and losses are accounted for as past service costs.
The defined benefit obligation recognised in the Balance Sheet represents the actual deficit or surplus in the Groups defined benefit plans.
Short term and other long term employee benefits
Benefits accruing to employees in respect of wages, salaries and compensated absences and which are expected to be availed within twelve months immediately following the year end are reported as expenses during the year in which the employee performs the service that the benefit covers and the liabilities are reported at the undiscounted amount of the benefit expected to be paid in exchange of related service. Where the availment or encashment is otherwise not expected to wholly occur within the next twelve months, the liability on account of the benefit is actuarially determined using the projected unit credit method at the present value of the estimated future cash flow expected to be made by the Group in respect of services provided by employees up to the reporting date.
E. Property, Plant and Equipment
Property, plant and equipment are stated at cost less accumulated depreciation and impairment losses, if any. All property, plant and equipment are initially recorded at cost. Cost includes the acquisition cost or the cost of construction, including duties and non-refundable taxes, expenses directly related to bringing the asset to the location and condition necessary for making them operational for their intended use and, in the case of qualifying asset, the attributable borrowing costs.
Projects under which the property, plant and equipment is not yet ready for their intended use are carried as capital work in progress at cost determined as aforesaid. Subsequent expenditure relating to property, plant and equipment is capitalized only when it is probable that future economic benefits associated with these will flow to the Group and the cost of the item can be measured reliably.
Depreciable amount for assets is the cost of an asset, less its estimated residual value. Depreciation is recognised so as to write off the depreciable amount of assets (other than freehold land and assets under construction) over the useful lives using the straight-line method. The estimated useful lives are as follows:
| Assets | Useful life |
| Building | 61 years |
| Roads | 5 years |
| Plant and Equipment - Electrical Installations | 9 years |
| Plant and Equipment - Hotel Equipments | 5 years |
| Plant and Equipment - Others | 10 years |
| Office Equipment | 3-5 years |
| Furniture and fixtures | 5 years |
| Vehicles | 3 years |
The Group, based on technical assessment made by technical expert and management estimate, depreciates items of property, plant and equipment over estimated useful lives which are different from the useful life prescribed in Schedule II to the Companies Act, 2013. Useful lives as estimated by the management reflect fair approximation of the period over which the assets are likely to be used.
An item of property, plant and equipment and any significant part initially recognised is derecognised upon disposal or when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in the statement of profit and loss when the asset is derecognised.
The residual values, useful lives and methods of depreciation of property, plant and equipment are reviewed at each financial year end and adjusted prospectively, if appropriate.
F. Intangible Assets
Intangible assets acquired separately are measured on initial recognition at cost. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment loss, if any. Amortisation is recognised on a straight-line basis over their estimated useful lives. The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.
Estimated useful life of intangible assets are as follows:
- Computer Software: Three years
Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the statement of profit and loss when the asset is derecognised.
G. Foreign Currency
The Groups financial statements are presented in INR, which is also the Groups functional currency. Income and expenses in foreign currencies are recorded at exchange rates prevailing on the date of the transaction. Foreign currency denominated monetary assets and liabilities are translated at the exchange rate prevailing on the Balance Sheet date and exchange gains and losses arising on settlement and restatement are recognised in the Statement of Profit and Loss. Non-monetary items denominated in a foreign currency are measured at historical cost and translated at exchange rate prevalent at the date of transaction.
H. Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. i.e., if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and leases of low-value assets. The Group recognises lease liabilities to make lease payments and right-of-use assets representing the right to use the underlying assets.
• Right-of-use assets
The Group recognises right-of-use assets at the commencement date of the lease (i.e., the date the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred, and lease payments made at or before the commencement date less any lease incentives received. Right-of use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful lives of the assets, as follows:
Leasehold building 57 years and 1 months
The right-of-use assets are also subject to impairment.
• Lease liabilities
At the commencement date of the lease, the Group recognises lease liabilities measured at the present value of lease payments to be made over the lease term. The lease payments include fixed payments (including in substance fixed payments) less any lease incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid under residual value guarantees. The lease payments also include the exercise price of a purchase option reasonably certain to be exercised by the Group and payments of penalties for terminating the lease, if the lease term reflects the Group exercising the option to terminate. Variable lease payments that do not depend on an index or a rate are recognised as expenses (unless they are incurred to produce inventories) in the period in which the event or condition that triggers the payment occurs.
In calculating the present value of lease payments, the Group uses its incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities is remeasured if there is a modification, a change in the lease term, a change in the lease payments (e.g., changes to future payments resulting from a change in an index or rate used to determine such lease payments) or a change in the assessment of an option to purchase the underlying asset. The Groups lease liabilities are included in interest-bearing borrowings.
• Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of office premises and storage locations (i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are recognised as expense on a straight-line basis over the lease term.
Company as a lessor
Leases in which the Group does not transfer substantially all the risks and rewards of ownership of an asset are classified as operating leases. Rental income arising is accounted for a straight-line basis over the lease terms. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned.
I. Inventories
Inventories are valued at cost or net realisable value, whichever is lower, cost being determined on weighted average basis. Cost includes all charges for bringing the goods to their present location and condition. Net realizable value represents the estimated selling price for inventories less all estimated costs of completion and costs necessary to make the sale.
J. Taxes on income
Current Income Tax
Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities in accordance with Income T ax Act, 1961. The tax rates and tax laws used to compute the tax are those that are enacted at the reporting date. Current income tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Current tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Minimum alternate tax (MAT) paid in a year is charged to the statement of profit and loss as current tax for the year. The deferred tax asset is recognised for MAT credit available only to the extent that it is probable that the concerned company will pay normal income tax during the specified period, i.e., the period for which MAT credit is allowed to be carried forward. In the year in which the Group recognizes MAT credit as an asset, it is created by way of credit to the statement of profit and loss and shown as part of deferred tax asset. The Group reviews the "MAT credit entitlement" asset at each reporting date and writes down the asset to the extent that it is no longer probable that it will pay normal tax during the specified period.
Deferred tax
Deferred Tax is provided using the balance sheet approach on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised. The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss (either in other comprehensive income or in equity). Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against current tax liabilities.
K. Provisions and Contingencies
Provisions
Provisions are recognised when there is a present obligation (legal or constructive) as a result of past event, where it is probable that there will be outflow of resources to settle the obligation and when a reliable estimate of the amount of the obligation can be made. The amount recognised as a provision is the best estimate of the consideration required to settle the present obligation at the end of the reporting period, taking into account the risks and uncertainties surrounding the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.
Contingencies
Contingent liabilities exist 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 Group, or a present obligation that arises from past events where it is either not probable that an outflow of resources will be required or the amount cannot be reliably estimated. Contingent liabilities are appropriately disclosed unless the possibility of an outflow of resources embodying economic benefits is remote.
L. Financial Instruments
A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity.
Financial Assets
• Initial recognition and measurement
All financial assets are recognised initially at fair value plus, in the case of financial assets not recorded at fair value through profit or loss, transaction costs that are attributable to the acquisition of the financial asset.
• Subsequent measurement
All recognised financial assets are subsequently measured in their entirety at either amortised cost or fair value, depending on the classification of the financial assets.
• Financial assets at amortised cost
Financial assets are subsequently measured at amortised cost if these financial assets are held within a business model whose objective is to hold assets for collecting contractual cash flows and contractual terms of the asset give rise on specified dates to cash flows that are Solely Payments of Principal and Interest (SPPI) on the principal amount outstanding. After initial measurement, such financial assets are subsequently measured at amortised cost using the Effective Interest Rate (EIR) method. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included in other income in the statement of profit and loss. The losses arising from impairment are recognised in the statement of profit and loss. This category generally applies to trade receivables, loans and other financial assets.
• Financial assets at fair value through other comprehensive income (FVTOCI)
Financial assets are subsequently measured at fair value through other comprehensive income if these financial assets are held within a business model whose objective is achieved both by collecting contractual cash flows and selling the financial assets and the assets contractual cash flow represents SPPI.
Financial instruments included within the FVTOCI category are measured initially as well as at each reporting date at fair value. Fair value movements are recognized in the other comprehensive income (OCI). However, the Group recognizes interest income, dividend income, impairment losses and reversals and foreign exchange gain or loss in the statement of profit and loss. On derecognition of the asset, cumulative gain or loss previously recognised in OCI is reclassified from the equity to statement of profit and loss.
• Financial assets at fair value through profit or loss (FVTPL)
FVTPL is a residual category for financial assets. Any financial assets, which does not meet the criteria for categorization as at amortized cost or as FVTOCI, is classified as at FVTPL. Financial assets included within the FVTPL category are measured at fair value with all changes recognized in the statement of profit and loss.
• Equity Instruments
All equity investments in scope of Ind AS 109 are measured at fair value. Equity instruments which are held for trading and contingent consideration recognised by an acquirer in a business combination to which Ind AS103 applies are classified as at FVTPL. For all other equity instruments, other than investment in Subsidiary, the Group makes an irrevocable election to present in other comprehensive income subsequent changes in the fair value. The Group makes such election on an instrument-by instrument basis. The classification is made on initial recognition and is irrevocable. If the Group decides to classify an equity instrument as at FVTOCI, then all fair value changes on the instrument, excluding dividends, are recognized in the OCI. There is no recycling of the amounts from OCI to statement of profit and loss, even on sale of investment. However, the Group may transfer the cumulative gain or loss within equity. Equity instruments included within the FVTPL category are measured at fair value with all changes recognised in the statement of profit and loss.
• Investments in subsidiaries
Investment in subsidiaries, are carried at cost in the financial statements.
• Derecognition
The Group derecognises a financial asset when the rights to receive cash flows from the asset have expired or it transfers the right to receive the contractual cash flow on the financial assets in a transaction in which substantially all the risk and rewards of ownership of the financial asset are transferred.
• Offsetting of financial instruments
Financial assets and financial liabilities are offset and the net amount is reported in the Balance Sheet if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.
M. Impairment
• Financial assets
The Group assessed the expected credit losses associated with its assets carried at amortised cost and fair value through other comprehensive income based on the Groups past history of recovery, credit worthiness of the counterparty and existing and future market conditions.
For all financial assets other than trade receivables, expected credit losses are measured at an amount equal to the 12-month expected credit loss (ECL) unless there has been a significant increase in credit risk from initial recognition in which case those are measured at lifetime ECL. For trade receivables, the
Group has applied the simplified approach for recognition of impairment allowance as provided in Ind AS 109 which requires the expected lifetime losses from initial recognition of the receivables.
• Non-financial assets
The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the assets recoverable amount. An assets recoverable amount is the higher of an assets or cashgenerating units (CGU) fair value less costs of disposal and its value in use. Recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount.
In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. In determining fair value less costs of disposal, recent market transactions are taken into account. If no such transactions can be identified, an appropriate valuation model is used.
Impairment losses including impairment on inventories are recognised in the statement of profit and loss.
For assets, an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the assets or CGUs recoverable amount. A previously recognized impairment loss is reversed only if there has been a change in the assumptions used to determine the assets recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit and loss. For contract assets, the Group has applied the simplified approach for recognition of impairment allowance as provided in Ind AS 109 which requires the expected lifetime losses from initial recognition of the contract assets.
N. Cash and Cash Equivalents
Cash and cash equivalent in the balance sheet comprise cash at banks and on hand and short-term deposits with an original maturity of three months or less, which are subject to an insignificant risk of changes in value.
O. Earnings per Share
Basic EPS is calculated by dividing the profit or loss attributable to equity shareholders of the Group by the weighted average number of equity shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to equity shareholders and the weighted average number of equity shares outstanding for the effects of all dilutive potential equity shares.
Our Restated Consolidated Financial Information included in this Draft Red Herring Prospectus relate to periods prior to the CHPL Acquisition and therefore only includes the consolidated financial information of our Company and MHPL. See "History and Certain Corporate Matters - Acquisition of Chartered Hotels Private Limited " on page 207 for more details on the CHPL Acquisition.
Changes in Accounting Policies
There have been no changes in the accounting policies of our Company during the last three financial years.
Principal Components of our Statement of Profit and Loss
The following descriptions set forth information with respect to the key components of our profit and loss statement.
Income
Revenue from Operations: Revenue from operations primarily comprises revenue from contracts with customers which includes:
• revenue from rooms - income received from occupied rooms at our hotels and serviced apartments;
• food and soft beverages -
o income from the sale of food and soft beverage at our hotels and serviced apartments, including through the F&B venues, banquet and MICE facilities at our hotels; and
o income from the sale of wines and liquor at our hotels and serviced apartmentsand through the F&B venues, banquet and MICE facilities at our hotels.
• lease rentals - income from the commercial and retail spaces which we have leased out to third parties.
• other hospitality services - income from ancillary services, such as laundry, spa and wellness centers, transportation hire and hall rental revenue from MICE services.
In addition to revenue from contracts with customers, we also have other operating revenues, which primarily comprises export incentives income (which was a one-time benefit availed by our Company).
Other income: Other income primarily includes gain on disposal of property, plant and equipment (net), government grants income, unclaimed credit balance written back and interest income earned on deposits with banks, financial instruments measured at amortized cost and income tax refund.
Expenses
Food and beverages consumed: Food and beverages consumed primarily include expenses in relation to food and soft beverages and wines and liquor. This includes costs in relation to the consumption of alcoholic and nonalcoholic beverages, room service, F&B and groceries at our hotels and serviced apartments.
Employee benefits expenses: Employee benefits expense primarily consists of salaries, wages and bonus, contribution to provident and other funds, gratuity expense and staff welfare expenses.
Finance costs: Finance costs primarily consist of interest expense on borrowings from banks, external commercial borrowings and lease liabilities, guarantee and advisory fees and exchange difference regarded as an adjustment to borrowing cost.
Depreciation and amortization expense: Depreciation and amortization expense primarily relates to depreciation on tangible assets, depreciation of right-of-use assets and amortization of intangible assets (such as goodwill, software and trademarks).
Other expenses: Other expenses primarily comprise power and fuel, management fees (which are payable to HICPL), other direct operating cost, operating supplies consumed, repairs and maintenance of buildings, plant and machinery and repairs and maintenance of others which include waterproofing expenses, commission and brokerage (which are payable to online travel aggregators and credit card service providers), business promotion expenses (which include sales and marketing expenses) as well as rates and taxes, among others.
Results of Operations
The following table sets forth selected financial data from our restated consolidated summary statement of profit and loss for Fiscals 2023, 2022 and 2021, the components of which are expressed as a percentage of total income for such years.
| Fiscal | ||||||
| 2023 | 2022 | 2021 | ||||
| (in Rs million) | % of total income | (in Rs million) | % of total income | (in Rs million) | % of total income | |
| Income | ||||||
| Revenue from Operations | 6,668.54 | 92.97% | 3,086.89 | 89.80% | 1,663.51 | 86.26% |
| Other income | 504.34 | 7.03% | 350.66 | 10.20% | 265.01 | 13.74% |
| Total income | 7,172.88 | 100.00% | 3,437.55 | 100.00% | 1,928.52 | 100.00% |
| Expenses | ||||||
| Food and beverages consumed | 503.60 | 7.02% | 270.61 | 7.87% | 143.28 | 7.43% |
| Employee benefits expense | 989.49 | 13.79% | 756.43 | 22.00% | 580.79 | 30.12% |
| Finance costs | 2,663.60 | 37.13% | 2,156.29 | 62.73% | 1,862.14 | 96.56% |
| Depreciation and amortization expense | 815.21 | 11.37% | 999.39 | 29.07% | 1,053.96 | 54.65% |
| Other expenses | 2,456.17 | 34.24% | 1,395.83 | 40.61% | 982.40 | 50.94% |
| Total expenses | 7,428.07 | 103.56% | 5,578.55 | 162.28% | 4,622.57 | 239.70% |
| Restated profit/ (loss) before tax | (255.19) | (3.56)% | (2,141.00) | (62.28)% | (2,694.05) | (139.70) % |
| Tax expense | ||||||
| Current Tax | - | - | - | - | - | - |
| Adjustment of tax relating to earlier periods | - | - | - | - | (49.15) | (2.55)% |
| Deferred tax credit | (240.22) | (3.35)% | (260.69) | (7.58)% | (650.04) | (33.71)% |
| Total tax expense | (240.22) | (3.35)% | (260.69) | (7.58)% | (699.19) | (36.26)% |
| Restated profit/ (loss) for the year | (14.97) | (0.21)% | (1,880.31) | (54.70)% | (1,994.86) | (103.44) % |
| Other comprehensive income/(loss) | ||||||
| Items that are not to be reclassified to profit or loss in subsequent periods | ||||||
| (a) Remeasurement gain/(loss) on the defined benefit plans | (5.58) | (0.08)% | 7.70 | 0.22% | 1.49 | 0.08% |
| (b) Income tax effect on (a) above | 1.95 | 0.03% | (2.69) | (0.08)% | (0.52) | (0.03)% |
| Restated Other Comprehensive Income for the year, net of tax | (3.63) | (0.05)% | 5.01 | 0.15% | 0.97 | 0.05% |
| Restated Total Comprehensive Income for the year, net of tax | (18.60) | (0.26)% | (1,875.30) | (54.55)% | (1,993.89) | (103.39) % |
Fiscal 2023 compared to Fiscal 2022
Key Developments. Fiscal 2023 was a year of strong business recovery and performances for companies in the hospitality and hotel industry, coming out of the depths of the COVID-19 pandemic (source: Horwath Report). The after-effect of the COVID-19 pandemic led to an increased demand in business and leisure travel, weddings, staycations and MICE, which benefitted our business and operations.
Total Income. Our total income significantly increased by 108.66% from Rs3,437.55 million in Fiscal 2022 to Rs7,172.88 million in Fiscal 2023 primarily due to the reasons discussed below.
Revenue from operations. Our revenue from operations increased by 116.03% to Rs6,668.54 million in Fiscal 2023 from Rs3,086.89 million in Fiscal 2022, primarily driven by an increase in our revenues from rooms by 123.72% to Rs3,802.88 million in Fiscal 2023 from Rs1,699.85 million in Fiscal 2022 and an increase in our revenue from food and soft beverages by 123.61% to Rs1,744.24 million in Fiscal 2023 from Rs780.02 million in Fiscal 2022. This increase was on account of the recovery in the Average Occupancy and ARRs for our hotels after the COVID- 19 pandemic, which resulted in an increase in our revenue from rooms, food and soft beverages as well as revenues related to other hospitality services. Our Average Occupancy increased to 75.74% in Fiscal 2023 from 53.76% in Fiscal 2022 and our ARR increased by 58.71% to Rs9,875.12 in Fiscal 2023 from Rs6,221.98 in Fiscal 2022 across our hotels and serviced apartments.
The following table sets forth the components of our revenue from operations, for the years indicated:
| Fiscal | |||||
| 2023 | 2022 | ||||
| Particulars | (in t million) | % of revenue from operations | (in t million) | % of revenue from operations | Year-on-Year growth (%)(1) |
| Room revenue (A) | 3,802.88 | 57.03% | 1,699.85 | 55.07% | 123.72% |
| Food and soft beverages (B) | 1,744.24 | 26.16% | 780.02 | 25.27% | 123.61% |
| Wines and liquor (C) | 279.37 | 4.19% | 115.00 | 3.73% | 142.93% |
| Lease rentals (D) | 338.61 | 5.08% | 240.51 | 7.79% | 40.79% |
| Fiscal | |||||
| 2023 | 2022 | ||||
| Particulars | (in Rs million) | % of revenue from operations | (in Rs million) | % of revenue from operations | Year-on-Year growth (%)(1) |
| Other hospitality services (E) | 481.03 | 7.21% | 175.17 | 5.67% | 174.61% |
| Export Incentives Income (F) | 22.41 | 0.34% | 76.34 | 2.47% | (70.64)% |
| Revenue from Operations (A+B+C+D+E+F) | 6,668.54 | 100.00% | 3,086.89 | 100.00% | 116.03% |
Note: (1) Year-on-year growth (%) — (Amount pertaining to the current financial year less corresponding amounts in the immediately preceding financial year) divided by corresponding amounts in the immediately preceding financial year.
In addition, other operating revenues which comprises of export incentive income of Rs22.41 million in Fiscal 2023 compared to Rs76.34 million in Fiscal 2022.
Other income. Other income increased by 43.83% to Rs504.34 million in Fiscal 2023 from Rs350.66 million in Fiscal 2022, primarily driven by a gain on disposal of property, plant and equipment of Rs281.99 million, of which net gain on transfer of transferable development rights ("TDR")), was Rs278.30 million in Fiscal 2023 (this was a one-time gain) and an increase in unclaimed credit balance written back to Rs66.91 million in Fiscal 2023 from Rs15.26 million in Fiscal 2022. Further there was a decrease in governments grants income of Rs112.18 million in Fiscal 2023 from Rs315.52 million in Fiscal 2022.
Expenses. Total expenses increased by 33.15% to Rs7,428.07 million in Fiscal 2023 from Rs5,578.55 million in Fiscal 2022. This increase was commensurate with the growth in our business.
Food and beverages consumed. Food and beverages consumed increased by 86.10% to Rs503.60 million in Fiscal 2023 from Rs270.61 million in Fiscal 2022. This increase is consistent with an increase in our revenues from sale of food and soft beverages and wines and liquor. Our cost of food and beverages consumed, as a percentage of our revenues from food and soft beverage and wines and liquor, was 24.89% and 30.24% during Fiscals 2023 and 2022, respectively.
Employee benefits expense. Employee benefits expense increased by 30.81% to Rs989.49 million in Fiscal 2023 from Rs756.43 million in Fiscal 2022 primarily on account of annual increments and increase in headcount, which was needed to support the increased business. Salaries, wages and bonus increased by 27.38% to Rs843.15 million in Fiscal 2023 from Rs661.90 million in Fiscal 2022. Contribution to provident and other funds increased by 27.34% to Rs49.14 million in Fiscal 2023 from Rs38.59 million in Fiscal 2022 and staff welfare expenses increased to Rs74.67 million in Fiscal 2023 from Rs33.83 million in Fiscal 2022.
Finance costs. Finance costs increased by 23.53% to Rs2,663.60 million in Fiscal 2023 from Rs2,156.29 million in Fiscal 2022 primarily on account of increase in interest expense on borrowings from banks by 18.94% to Rs1,550.20 million in Fiscal 2023 from Rs1,303.36 million in Fiscal 2022. Our external commercial borrowing cost also increased to Rs128.35 million in Fiscal 2023 from Rs43.42 million in Fiscal 2022 primarily due to an increase in the cost of borrowings.
Depreciation and amortization expense. Depreciation and amortization expense decreased by 18.43% to Rs815.21 million in Fiscal 2023 from Rs999.39 million in Fiscal 2022 primarily due to a decrease in depreciation on tangible assets to Rs713.46 million in Fiscal 2023 from Rs897.14 million in Fiscal 2022.
Other expenses. Other expenses increased by 75.97% to Rs2,456.17 million in Fiscal 2023 from Rs1,395.83 million in Fiscal 2022 primarily due to the following reasons:
• increase by 50.45% in power and fuel costs to Rs421.36 million in Fiscal 2023 from Rs280.07 million in Fiscal 2022 which were mainly driven by the increase in occupancy across hotels.
• increase by 27.88% in repairs and maintenance - others to Rs215.28 million in Fiscal 2023 from Rs168.34 million in Fiscal 2022 primarily due to the deferral of repairs and maintenance from 2021 and 2022, due to the various regulations which restricted our ability to conduct such repair and maintenance work during the COVID-19 pandemic. •
• increase by 79.58% in operating supplies consumed to Rs211.98 million in Fiscal 2023 from Rs118.04 million in Fiscal 2022 which were mainly driven by overall growth of business.
• increase by 193.24% in business promotion expenses to Rs138.38 million in Fiscal 2023 from Rs47.19 million in Fiscal 2022 which were mainly driven by overall growth of business.
• increase by 132.39% in commission and brokerage to Rs155.75 million in Fiscal 2023 from Rs67.02 million in Fiscal 2022 which were mainly driven by increased bookings through online travel aggregators, consistent with the increase in occupancy across our hotels.
• increase by 79.26% in other direct operating costs to Rs381.27 million in Fiscal 2023 from Rs212.69 million in Fiscal 2022 which were mainly driven by overall growth of business.
• increase by 182.15% in our management, other fees and charges to Rs380.53 million in Fiscal 2023 from Rs134.87 million in Fiscal 2022, due to the increase in occupancy across our hotels.
Restated profit/(loss) before tax. For the reasons discussed above, our restated loss before tax decreased by 88.08% to Rs255.19 million in Fiscal 2023 from Rs2,141.00 million in Fiscal 2022.
Tax expenses. Total tax expenses which represent deferred tax credit decreased by 7.85% to Rs240.22 million in Fiscal 2023 from Rs260.69 million in Fiscal 2022, due to decrease in restated loss before tax.
Restated profit/(loss) for the year. For the reasons stated above, the restated loss for the year decreased by 99.20% from Rs1,880.31 million in Fiscal 2022 to Rs14.97 million in Fiscal 2023.
Fiscal 2022 compared to Fiscal 2021
Key Developments. The COVID-19 pandemic was a major disruption with severe travel and operating restrictions and material drop of occupancies and average daily revenue - corporate, MICE, inbound, and crew travel reduced materially (Source: Horwath Report). Accordingly, in Fiscal 2021, our hotels experienced our lowest Average Occupancy at 34.23% at our Company. While recovery slowly started in late Fiscal 2021, the second wave and the Omicron variant of the COVID-19 pandemic reduced our growth to a certain extent in Fiscal 2022.
Total Income. Our total income significantly increased by 78.25% to Rs3,437.55 million in Fiscal 2022 from Rs1,928.52 million in Fiscal 2021 primarily due to the reasons discussed below.
Revenue from operations. Our revenue from operations increased by 85.56% to Rs3,086.89 million in Fiscal 2022 from Rs1,663.51 million in Fiscal 2021, primarily driven by an increase in our revenues from rooms by 72.92% to Rs1,699.85 million in Fiscal 2022 from Rs983.05 million in Fiscal 2021 and an increase in our revenue from food and soft beverages by 115.72% to Rs780.02 million in Fiscal 2022 from Rs361.59 million in Fiscal 2021. This increase was consistent with the gradual recovery in the Average Occupancy and ARRs for our hotels after the restrictions related to travel due to the COVID-19 pandemic were lifted. Our Average Occupancy increased by 19.53% to 53.76% in Fiscal 2022 from 34.23% in Fiscal 2021 and our ARR increased by 9.99% to Rs6,221.98 in Fiscal 2022 from Rs5,656.77 in Fiscal 2021.
The following table sets forth the components of our revenue from operations, for the years indicated:
| Particulars | Fiscal | ||||
| 2022 | 2021 | ||||
| (in Rs million) | % of revenue from operations | (in Rs million) | % of revenue from operations | Year-on-Year growth (%)(1) | |
| Room revenue (A) | 1,699.85 | 55.07% | 983.05 | 59.09% | 72.92% |
| Food and soft beverages (B) | 780.02 | 25.27% | 361.59 | 21.74% | 115.72% |
| Wines and liquor (C) | 115.00 | 3.73% | 46.56 | 2.80% | 146.99% |
| Lease rentals (D) | 240.51 | 7.79% | 200.54 | 12.06% | 19.93% |
| Other hospitality services (E) | 175.17 | 5.67% | 71.77 | 4.31% | 144.07% |
| Export Incentives Income (F) | 76.34 | 2.47% | - | - | - |
| Revenue from Operations (A+B+C+D+E+F) | 3,086.89 | 100.00% | 1,663.51 | 100.00% | 85.56% |
Note: (1) Year-on-year growth (%) — (Amount pertaining to the current financial year less corresponding amounts in the immediately preceding financial year) divided by corresponding amounts in the immediately preceding financial year.
Other income. Other income increased by 32.32% to Rs350.66 million in Fiscal 2022 from Rs265.01 million in Fiscal 2021, primarily by an increase in governments grants income of (Rs315.52 million in Fiscal 2022 from Rs104.26 million in Fiscal 2021, due to fulfilment of substantial export obligations in Fiscal 2022. Further there
was a partial decrease in unclaimed credit balance written back to Rs15.26 million in Fiscal 2022 from Rs68.64 million in Fiscal 2021. In addition, there was no foreign exchange fluctuation gain in Fiscal 2022 compared with an exchange differences (net) of Rs46.96 million in Fiscal 2021.
Expenses. Total expenses increased by 20.68% to Rs5,578.55 million in Fiscal 2022 from Rs4,622.57 million in Fiscal 2021. This increase was commensurate with the growth in our business.
Food and beverages consumed. Food and beverages consumed increased by 88.87% to Rs270.61 million in Fiscal 2022 from Rs143.28 million in Fiscal 2021. This increase is consistent with an increase in our revenues from sale of food and soft beverages, wines and liquor. Our cost of food and beverages consumed, as a percentage of our revenues from food and soft beverage and wines and liquor, was 30.24% and 35.10% during Fiscals 2022 and 2021, respectively.
Employee benefits expense. Employee benefits expense increased by 30.24% to Rs756.43 million in Fiscal 2022 from Rs580.79 million in Fiscal 2021 primarily on account of annual increments and an increase in headcount. Salaries, wages and bonus increased by 28.70% to Rs661.90 million in Fiscal 2022 from Rs514.28 million in Fiscal 2021. Contribution to provident and other funds increased by 34.18% to Rs38.59 million in Fiscal 2022 from Rs28.76 million in Fiscal 2021 and staff welfare expenses also increased by 115.20% to Rs33.83 million in Fiscal 2022 from Rs15.72 million in Fiscal 2021.
Finance costs. Finance costs increased by 15.80% to Rs2,156.29 million in Fiscal 2022 from Rs1,862.14 million in Fiscal 2021 primarily due to an increase in overall borrowings of our Company to manage the working capital requirement during the COVID-19 period. This led to an increase in guarantee and advisory fees on borrowings from Rs188.03 million in Fiscal 2021 to Rs410.88 million in Fiscal 2022.
Depreciation and amortization expense. Depreciation and amortization expense decreased by 5.18% to Rs999.39 million in Fiscal 2022 from Rs1,053.96 million in Fiscal 2021 primarily due to a decrease in depreciation on tangible assets to Rs897.14 million in Fiscal 2022 from Rs953.68 million in Fiscal 2021.
Other expenses. Other expenses increased by 42.08% to Rs1,395.83 million in Fiscal 2022 from Rs982.40 million in Fiscal 2021 primarily due to the following reasons:
• increase by 32.38% in power and fuel costs to Rs280.07 million in Fiscal 2022 from (Rs211.56 million in Fiscal 2021 which were mainly driven by the increase in occupancy across our hotels.
• increase by 94.77% in repairs and maintenance - others to Rs168.34 million in Fiscal 2022 from Rs86.43 million in Fiscal 2021 which were mainly driven by the deferral of repairs and maintenance from 2021, due to the various regulations which restricted our ability to conduct such repair and maintenance work during the COVID-19 pandemic.
• increase by 65.54% in other direct operating costs to Rs212.69 million in Fiscal 2022 from Rs128.48 million in Fiscal 2021 which were mainly driven by the increase in occupancy across our hotels.
• increase by 92.31% in commission and brokerage to Rs67.02 million in Fiscal 2022 from Rs34.85 million in Fiscal 2021 which were mainly driven by increased bookings through online travel aggregators, consistent with increase in occupancy across our hotels.
• increase by 83.20% in our management, other fees and charges to Rs134.87 million in Fiscal 2022 from Rs73.62 million in Fiscal 2021, due to the increase in occupancy across our hotels.
Restated profit/(loss) before tax. For the reasons discussed above, our restated profit/(loss) before tax decreased by 20.53% to Rs2,141.00 million in Fiscal 2022 from Rs2,694.05 million in Fiscal 2021.
Tax expenses. Total tax expenses which primarily represent deferred tax credit, decreased by 62.72% to Rs260.69 million in Fiscal 2022 as compared to Rs699.19 million in Fiscal 2021, in which deferred tax asset was created mainly on the unabsorbed depreciation incurred due to COVID-19 pandemic.
Restated profit/(loss) for the year. For the reasons stated above, our restated loss for the year decreased by 5.74% to Rs1,880.31 million in Fiscal 2022 from Rs1,994.86 million in Fiscal 2021.
Liquidity and Capital Resources
Our primary liquidity requirements have been for financing our capital expenditure, working capital, repayment of debt needs and business cashflow requirements, from time to time. In recent periods, we have met these requirements through cash flows from operations, as well as term loans and unsecured loans from financial institutions and our Promoters. As of March 31, 2023, we had Rs98.01 million in cash and cash equivalents. We believe that we will have sufficient liquidity for our present requirements and anticipated requirements for capital expenditure, working capital, interest obligations and other operating needs under our current business plans for the next 12 months. We continue to assess our liquidity requirements depending on business growth and market developments and take appropriate actions to manage the liquidity through various sources, internal and external.
Cash Flows
The following table sets forth our cash flows for the years indicated:
| Fiscal | |||
| 2023 | 2022 | 2021 | |
| (in Rs million) | |||
| Net cash generated from/ (used in) operating activities | 2,864.44 | (364.49) | 535.76 |
| Net cash generated from/ (used in) investing activities | 277.00 | (630.82) | (78.04) |
| Net cash (used in)/generated from financing activities | (3,107.99) | 902.48 | (414.85) |
| Net increase/(decrease) in cash and cash equivalents | 33.45 | (92.83) | 42.87 |
| Cash and cash equivalents at the end of the year | 98.01 | 64.56 | 157.39 |
Operating Activities
Net cash generated from operating activities was Rs2,864.44 million in Fiscal 2023. Our restated profit/(loss) before tax was Rs255.19 million in Fiscal 2023, which was primarily adjusted for depreciation and amortization expense of Rs815.21 million, finance costs of Rs2,663.60 million and allowance for doubtful debts/advances of Rs20.92 million. Our operating cash flows before working capital changes was Rs2,855.38 million in Fiscal 2023 and adjustments for changes in operating assets and liabilities primarily comprised an increase in trade payable of Rs175.67 million, decrease in other non-financial assets of Rs76.36 million, decrease in other financial assets of Rs74.46 million which was partially offset by an increase in trade receivables of Rs172.62 million and a decrease in other non-financial liabilities of Rs90.03 million. Cash generated from operations amounted to Rs2,958.47 million and income tax taxes paid (net of refunds) was Rs(94.03) million.
Net cash (used in) operating activities was Rs364.49 million in Fiscal 2022. Our restated profit/(loss) before tax was Rs2,141.00 million in Fiscal 2022, which was primarily adjusted for depreciation and amortization expense of Rs999.39 million and finance costs of Rs2,156.29 million. Our operating cash flows before working capital changes was Rs982.92 million in Fiscal 2022 and adjustments for changes in operating assets and liabilities primarily comprised a decrease in trade payables of Rs677.69 million, a decrease in other non-financial liabilities of Rs363.85 million, an increase in other non-financial assets of (Rs113.28 million and an increase in other financial assets of Rs76.59 million. Cash used in operations amounted to Rs293.40 million and income tax taxes paid (net of refunds) was Rs(71.09) million.
Net cash generated from operating activities was Rs535.76 million in Fiscal 2021. Our restated loss before tax was Rs2,694.05 million in Fiscal 2021, which was primarily adjusted for depreciation and amortization expense of Rs1,053.96 million and finance costs of Rs1,862.14 million. Our operating cash flows before working capital changes was Rs86.55 million in Fiscal 2022 and adjustments for changes in operating assets and liabilities primarily comprised an increase in trade payable of Rs316.05 million and a decrease in trade receivables of Rs71.35 million which was partially offset by decrease in other financial liabilities of Rs89.33 million and a decrease in other nonfinancial liabilities of Rs189.50 million. Cash generated from operations amounted to Rs257.70 million and income tax taxes paid (net of refunds) was Rs278.06 million.
Investing Activities
Net cash generated from investing activities was Rs277.00 million in Fiscal 2023 primarily on account of proceeds from disposal of property, plant and equipment of Rs473.59 million. This was offset by purchase of property, plant and equipment (including capital advances and capital work-in-progress) of Rs296.79 million.
Net cash (used in) investing activities was Rs630.82 million in Fiscal 2022 primarily on account of purchase of property, plant and equipment (including capital advances and capital work-in-progress) of Rs560.60 million and investments in fixed deposits of Rs88.03 million. This was partially offset by interest received of Rs15.26 million.
Net cash used in investing activities was Rs78.04 million in Fiscal 2021 primarily on account of purchase of property, plant and equipment (including capital advances and capital work-in-progress) of Rs84.86 million (less disposal of Rs0.03 million of property plant and equipment). This was partially offset by interest received of Rs7.31 million.
Financing Activities
Net cash (used in) financing activities was Rs3,107.99 million in Fiscal 2023, on account of repayment of long term borrowings of Rs1,092.94 million, repayment of short term borrowings of Rs404.51 million, payment of principal and interest on lease liabilities Rs147.80 million and finance cost paid of Rs1,922.74 million. This was partially offset by proceeds from long term borrowings of Rs460.00 million.
Net cash generated from financing activities was Rs902.48 million in Fiscal 2022, on account of proceeds from long term borrowings of Rs7,388.10 million. This was partially offset by repayment of long term borrowings of Rs4,376.90 million, finance cost paid of Rs1,866.68 million and payment of principal portion and interest on lease liabilities of Rs244.92 million.
Net cash used in financing activities was Rs414.85 million in Fiscal 2021, on account of finance cost paid of Rs1,579.79 million, repayment of short term borrowings Rs 59.99, payment of principal and interest on lease liabilities Rs28.60 million and repayment of long term borrowings of Rs119.23 million. This was partially offset by proceeds from long term borrowings of Rs1,372.76 million.
Capital Expenditures
Capital expenditures consist of primarily fixed assets of property, plant and equipment and furniture and fixtures. We intend to continue enhancing the facilities at our hotels and developing new opportunities at our hotels, which may lead us to incur further capital expenditure. The following table sets forth details of our capital expenditure for the years indicated:
| For the year ended March 31, | |||
| Particulars | 2023 | 2022 | 2021 |
| (in Rs million) | |||
| Non-current Assets | |||
| Property, plant and equipment | 99.55 | 246.73 | 73.48 |
| Capital work-in progress | 45.80 | 442.28 | - |
Further, the table below sets forth the details of our property, plant and equipment, capital work-in progress and intangible assets, as of the dates indicated:
| As of March 31, | |||
| Particulars | 2023 | 2022 | 2021 |
| (in Rs million) | |||
| Non-current Assets | |||
| Property, plant and equipment | 23,226.30 | 24,031.82 | 24,682.23 |
| Capital work-in progress | 488.08 | 442.28 | - |
| Intangible assets | 5.63 | 9.94 | 13.00 |
Indebtedness
Set out below is a brief summary of our financial indebtedness for the date indicated:
| Category of Borrowing | Outstanding amount as on March 31, 2023 (in Rs million)? |
| A. Secured | |
| Term loans | 2,844.02 |
| Working capital facilities? | 0.70 |
| Bank guarantees? | 21.62 |
| Term loan under ECLGS | 1,460.00 |
| Category of Borrowing | Outstanding amount as on March 31, 2023 (in Rs million)? |
| Vehicle Loans | 4.62 |
| Total (A) | 4,330.96 |
| B. Unsecured | |
| Non-convertible debentures | 4,160.00 |
| Term loans | 9,614.96 |
| Inter-corporate loans(4) | 2,464.60(5) |
| Total (B) | 16,239.56 |
| Total (A+B) | 20,570.52 |
As certified by ASCBSR and Company LLP, Chartered Accountants, by way of their certificate dated September 28, 2023.
(1 Details provided as on March 31, 2023, is prior to the acquisition of CHPL (including its subsidiary, CHHPL) by our Company and only pertains to our Company andMHPL on a consolidated basis as per the Restated Consolidated Financial Information.
(2) Includes overdraft, working capital demand loans and cash credit facilities.
(3) Includes letters of credits of the Company.
(4 Comprises (i) external commercial borrowings availed by the Company from Saraf Hotels and Two Seas Holdings; and (ii) external commercial borrowings availed by CHPL from Saraf Hotels.
(5 The rate of conversion of USD into INR considered for the amount outstanding as at March 31, 2023for the external commercial borrowings was L 82.22 per 1 USD (i.e., the exchange rate as of March 31, 2023). Source for exchange rate: RBI reference rate and FBIL.
(6) Our net borrowings to total equity ratio was 5.74 as of March 31, 2023. For further information on our indebtedness, see "Financial Indebtedness" on page 407. For reconciliation of Non-GAAP Measures, see "Non- GAAP Measures" on page 433 and "Risk Factors -We have in this Draft Red Herring Prospectus included certain non-GAAP financial measures and certain other industry measures related to our operations and financial performance that may vary from any standard methodology that is applicable across the industry we operate"" on page 57.
Contractual Obligations, Contingent Liabilities and Commitments
Contractual Obligations
The following table sets forth the remaining contractual undiscounted maturity for our financial liabilities as of March 31, 2023:
| As of March 31, 2023 | ||||
| Less than one year | 1-5 years | After 5th year | Total | |
| (in Rs million) | ||||
| Borrowings* | 2,045.70 | 18,624.49 | 3,470.16 | 24,140.35 |
| Lease liabilities | 156.18 | 715.42 | 24,673.68 | 25,545.28 |
| Trade payables | 784.22 | - | - | 784.22 |
| Other financial liabilities | 287.68 | 669.32 | - | 957.00 |
| Total | 3,273.78 | 20,009.23 | 28,143.84 | 51,426.85 |
* Maturity amount of borrowings includes the interest that will be paid on these borrowings
Contingent Liabilities
The following sets forth the principal components of our contingent liabilities, as per Ind AS 37, as of March 31, 2023:
| As of March 31, 2023 | |
| (in Rs million) | |
| Income tax | 6.11 |
| Property tax | 86.13 |
| Value added tax | 16.14 |
| Luxury tax | 8.90 |
Commitments
The following table sets forth our commitments as of March 31, 2023:
| As of March 31, 2023 | |
| (in Rs million) | |
| Estimated amount of contracts remaining to be executed on capital account (net of capital advances) and not provided | 92.91 |
| Export obligation under EPCG (Represents six times of duty amount saved) | 47.12 |
| Total commitments | 140.03 |
Non-GAAP Measures
EBITDA, EBITDA Margin, and other non-GAAP measures, (together, "Non-GAAP Measures"), presented in this Draft Red Herring Prospectus is a supplemental measure of our performance and liquidity that is not required by, or presented in accordance with, Ind AS, Indian GAAP, IFRS or US GAAP. Further, these Non-GAAP Measures are not a measurement of our financial performance or liquidity under Ind AS, Indian GAAP, IFRS or US GAAP and should not be considered in isolation or construed as an alternative to cash flows, profit/ (loss) for the years or any other measure of financial performance or as an metrics of our operating performance, liquidity, profitability or cash flows generated by operating, investing or financing activities derived in accordance with Ind AS, Indian GAAP, IFRS or US GAAP. In addition, such Non-GAAP Measures are not standardized terms, hence a direct comparison of these Non-GAAP Measures between companies may not be possible. Other companies may calculate these Non-GAAP Measures differently from us, limiting its usefulness as a comparative measure. Although such Non-GAAP Measures are not a measure of performance calculated in accordance with applicable accounting standards, our Companys management believes that they are useful to an investor in evaluating us as they are widely used measures to evaluate a companys operating performance. Also see "Risk Factors - We have in this Draft Red Herring Prospectus included certain non-GAAP financial measures and certain other industry measures related to our operations and financial performance that may vary from any standard methodology that is applicable across the industry we operate" on page 57.
Reconciliation for the following non-GAAP financial measures included in this Draft Red Herring Prospectus are set out below for the periods indicated:
Reconciliation of Restated Profit/(loss) for the year to EBITDA and EBITDA Margin
| Fiscal | |||
| Particulars | 2023 | 2022 | 2021 |
| (in Rs million, unless otherwise stated) | |||
| Restated profit/ (loss) for the year (A) | (14.97) | (1,880.31) | (1,994.86) |
| Tax expense (B) | (240.22) | (260.69) | (699.19) |
| Finance costs (C) | 2,663.60 | 2,156.29 | 1,862.14 |
| Depreciation and amortization expense (D) | 815.21 | 999.39 | 1053.96 |
| EBITDA (F=A+B+C+D) | 3,223.62 | 1,014.68 | 222.05 |
| Total Income (G) | 7,172.88 | 3,437.55 | 1,928.52 |
| EBITDA Margin (F/G) | 44.94% | 29.52% | 11.51% |
Reconciliation of Return on Net Worth
| Particulars | Fiscal | ||
| 2023 | 2022 | 2021 | |
| (in Rs million, unless otherwise stated) | |||
| Equity share capital (A) | 1,437.00 | 1,437.00 | 1,437.00 |
| Other equity (B) | 2,108.07 | 2,126.67 | 4001.97 |
| Net worth (C= A+B) | 3,545.07 | 3,563.67 | 5438.97 |
| Restated profit/(loss) for the year(D) | (14.97) | (1,880.31) | (1,994.86) |
| Return on net worth (%) (E=D/C) | (0.42)% | (52.76)% | (36.68)% |
Reconciliation of Net Asset Value per equity share
| Particulars | Fiscal | ||
| 2023 | 2022 | 2021 | |
| (in Rs million, unless otherwise stated) | |||
| Equity share capital (A) | 1,437.00 | 1,437.00 | 1,437.00 |
| Other equity (B) | 2,108.07 | 2,126.67 | 4,001.97 |
| Net worth (C=A+B) | 3,545.07 | 3,563.67 | 5,438.97 |
| Weighted average number of equity shares outstanding during the year ((Rs in Million) (D) | 143.7 | 143.7 | 143.7 |
| Particulars | Fiscal | ||
| 2023 | 2022 | 2021 | |
| (in Rs million, unless otherwise stated) | |||
| Net asset value per Equity Share (Rs) (E=C/D) | 24.67 | 24.80 | 37.85 |
| Reconciliation of EBITDA/Finance Cost | |||
| Particulars | Fiscal | ||
| 2023 | 2022 | 2021 | |
| (in Rs million, unless stated otherwise) | |||
| EBITDA (A) | 3,223.62 | 1,014.68 | 222.05 |
| Finance Cost (B) | 2,663.60 | 2,156.29 | 1,862.14 |
| EBITDA/Finance Cost (in times) (A/B) | 1.21 | 0.47 | 0.12 |
Reconciliation for Net Borrowings to Total Equity Ratio
| Particulars | Fiscal | ||
| 2023 | 2022 | 2021 | |
| (in Rs million, unless otherwise stated) | |||
| Non-current borrowings (A) | 20,090.29 | 20,569.93 | 17,686.39 |
| Current borrowings (B) | 365.79 | 648.16 | 618.38 |
| Total Borrowings (C = (A+B)) | 20,456.08 | 21,218.09 | 18,304.77 |
| Cash and cash equivalents (D) | 98.01 | 64.56 | 157.39 |
| Other balances with Banks (E) | 0.41 | 84.40 | 64.98 |
| Net Borrowings (F = C - (D+E)) | 20,357.66 | 21,069.13 | 18,082.40 |
| Total Equity (E) | 3,545.07 | 3,563.67 | 5,438.97 |
| Net Borrowings to Total Equity Ratio (D/E) (in times) | 5.74 | 5.91 | 3.32 |
Reconciliation of trade receivables turn Over Ratio
| Particulars | Fiscal | ||
| 2023 | 2022 | 2021 | |
| (in Rs million, unless stated otherwise) | |||
| Revenue from operations (A) | 6,668.54 | 3,086.89 | 1,663.51 |
| Average trade receivables (B) | 371.76 | 267.59 | 283.16 |
| Trade receivables Turn Over Ratio (A/B) (in times) | 17.94 | 11.54 | 5.87 |
Reconciliation of Average Trade Receivables
| Particulars | Fiscal | ||
| 2023 | 2022 | 2021 | |
| (in Rs million, unless stated otherwise) | |||
| Opening Trade Receivables (A) | 295.91 | 239.27 | 327.04 |
| Closing Trade Receivables (B) | 447.61 | 295.91 | 239.27 |
| Average Trade Receivables (A+B)/2 (in times) | 371.76 | 267.59 | 283.16 |
Reconciliation of Debt Service Coverage Ratio
| Particulars | Fiscal | ||
| 2023 | 2022 | 2021 | |
| (in Rs million, unless stated otherwise) | |||
| Restated profit/(loss) before tax (A) | (255.19) | (2,141.00) | (2,694.05) |
| Depreciation and Amortization (B) | 815.21 | 999.39 | 1,053.96 |
| Finance Cost (C) | 2,663.60 | 2,156.29 | 1,862.14 |
| Debt Service (D) | 2,906.54 | 2,372.33 | 2,028.00 |
| Debt Service Coverage Ratio (A+B+C)/(D) (in times) | 1.11 | 0.43 | 0.11 |
Reconciliation of Debt Service
| Particulars | Fiscal | ||
| 2023 | 2022 | 2021 | |
| (in Rs million, unless stated otherwise) | |||
| Finance Cost (A) | 2,663.60 | 2,156.29 | 1,862.14 |
| Principal repayments of long term borrowings (B) | 242.94 | 216.04 | 165.86 |
| Debt Service (A+B) | 2,906.54 | 2,372.33 | 2,028.00 |
Off-Balance Sheet Arrangements
We do not have any off-balance sheet arrangements that we believe have or are reasonably likely to have a current or future material effect on our financial condition, change in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Related Party Transactions
We enter into various transactions with related parties in the ordinary course of business. These transactions typically relate to, among others, borrowings from certain Promoters, management fees which are payable to Hyatt entities, and certain other transactions. For further information relating to our related party transactions, see "Related Party Transactions" on page 241.
Quantitative and Qualitative Disclosures about Market Risk
Our business activities expose us to a variety of financial risks, namely, market risk, credit risk and liquidity risk. Our Board of Directors manages our financial risks through internal risk reports which analyze exposure by the magnitude of risk.
Market Risk
Market risk is the risk that the fair value of future cash flows of a financial instrument will fluctuate because of changes in market price. Market risk comprises two types of risk: currency risk and interest rate risk. Financial instruments affected by market risks include borrowings, lease liabilities, trade payables and other payables, loans, trade receivables and other receivables.
Foreign currency risk
Foreign currency risk is the risk that the fair value or future cash flows of an exposure will fluctuate because of changes in foreign exchange rates. Our exposure to the risk of changes in foreign exchange relate to our operating and financial activities.
Interest rate risk
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Our exposure to the risk of changes in the market interest rates relate primarily to our long-term debt obligations with floating interest rates. We manage our interest rate risk by having a portfolio of fixed and variable rate borrowings.
Liquidity Risk
Liquidity risk refers to the risk that we cannot meet our financial obligations. The objective of liquidity risk management is to maintain sufficient liquidity and ensure that the funds are available for use as per requirements. We manage liquidity risk by maintaining adequate reserves, banking facilities and reserve borrowing facilities, by continuously monitoring forecast and actual cash flows, and by matching the maturity profiles of financial assets and liabilities. We consistently generate sufficient cash flows from operations to meet our financial obligations as and when they fall due.
Credit Risk
Credit risk is the risk that a customer or counter-party will not meet its obligations under a financial instrument, leading to financial loss. We are exposed to credit risk from investments, trade receivables, cash and cash equivalents, other bank balance, loans and other financial assets. Our credit risk is minimized as our financial assets are carefully allocated to counter parties reflecting the credit worthiness. Credit risk on trade receivables is
subject to our established policy, procedures and control relating to customer credit risk management. The credit quality of a customer is assessed, and individual credit limits are defined in accordance with this assessment. Further, our trade receivables are spread over a number of customers with no significant concentration of credit risk. No single customer accounted for 10% or more of the trade receivables in Fiscals 2023, 2022 and 2021.
Unusual or Infrequent Events or Transactions
Except as disclosed in this Draft Red Herring Prospectus, there have been no other events or transactions that, to our knowledge, may be described as "unusual" or "infrequent" that led to a material adverse effect on our business and operations.
Known Trends or Uncertainties
Our business has been subject, and we expect it to continue to be subject, to significant economic changes. To our knowledge, except as discussed in this Draft Red Herring Prospectus, there are no known trends or uncertainties that have or had or are expected to have a material adverse impact on income from our continuing operations. For further information regarding trends and uncertainties, please see "- Significant Factors Affecting Our Financial Condition and Results of Operations" on page 413 and "Risk Factors" on page 26.
Future Relationship between Cost and Income
Except as disclosed in this Draft Red Herring Prospectus, there are no known factors that will have a material adverse impact on our operations and finances. For further information, see "Risk Factors", "Our Business" and "Managements Discussion and Analysis of Financial Condition and Results of Operations" on pages 26, 130 and 411, respectively.
Seasonality of Business
The hotel and hospitality industry in India is subject to seasonal variations. According to the Horwath Report, the winter months are clearly preferred for travel into India, particularly for discretionary travel. This seasonality can result in to cause quarterly fluctuations in revenue, profit margins and earnings. Further, the hospitality industry is also subject to weekly variations, and business travel is higher during the weekdays.
For further information, see "Risk Factors - Our business is subject to seasonal and cyclical variations that could result in fluctuations in our results of operations and cashflows" on page 58.
Significant Dependence on a Single or Few Customers or Suppliers
We have a wide customer base and our business is not dependent on any single or few suppliers.
Significant Economic Changes
Our business has been subject, and we expect it to continue to be subject, to significant economic changes that materially affect or are likely to affect income from continuing operations. See "Risk Factors" and "— Significant Factors Affecting Our Financial Condition and Results of Operations" on pages 26 and 413, respectively.
New Products or Business Segment
Apart from the disclosures in "Our Business" on page 130, we currently have no plans to develop new hotels or establish new business segments that are expected to have a material impact on our business, results of operations or financial condition.
Competitive Conditions
We operate in a competitive environment. For information on our competitive conditions and our competitors, see "Risk Factors"" and "Our Business " on pages 26 and 130, respectively.
Significant Developments subsequent to March 31, 2023
On September 13, 2023, our Company entered into a share purchase and sale agreement to acquire 100% of the equity share capital of Chartered Hotels Private Limited and has agreed to as consideration for such acquisition to issue of 28,802,384 equity shares of our Company of face value of Rs10 each at a premium of Rs 174.51 each to
the erstwhile shareholders of CHPL. Subsequently, on September 20, 2020, our Company has completed the acquisition of CHPL (and consequently its subsidiary, CHHPL) and allotted the equity shares to the erstwhile shareholders of CHPL. Also see "History and Certain Corporate Matters - Acquisition of Chartered Hotels Private Limited and "Capital Structure" on pages 207 and 87, respectively.
Except as disclosed above and elsewhere in this Draft Red Herring Prospectus, no circumstances have arisen since the date of the last financial statements as disclosed in this Draft Red Herring Prospectus which materially or adversely affect or are likely to affect, our operations or profitability, or the value of our assets or our ability to pay our material liabilities within the next 12 months.
Proforma Financial Information
Set out below is a snapshot of our corporate structure (after reflecting the CHPL Acquisition) as at the date of this Draft Red Herring Prospectus:
Also see "Risk Factors - Proforma Financial Information included in this Draft Red Herring Prospectus is presented for illustrative purposes only and may not accurately reflect our future financial condition, cash flows and results of operations." on page 54.
Basis of Preparation of the Proforma Consolidated Financial Information
Set out below is a summary of the basis of preparation of the proforma consolidated financial information.
Subsequent to the year ended March 31, 2023, our Company has undertaken following acquisition in respect of which the unaudited proforma consolidated financial information has been prepared:
On September 20, 2023, our Company acquired 100% equity in Chartered Hotels Private Limited ("CHPL") along with its subsidiary Chartered Hampi Hotels Private Limited ("Chartered Group") which has with effect from that date become a subsidiary of our Company. The Chartered Group has three operating hotels namely 1) Hyatt Place Hampi, 2) Hyatt Raipur and 3) Hyatt Regency Lucknow.
The financial information gives effect to the acquisition of the Chartered Group for consideration amounting to Rs5,314.5 million. The consideration is paid by way of issue of 1 equity share of our Company for 8.94 shares of CHPL.
Basis of Preparation
The unaudited proforma consolidated financial information has been prepared by the Management of our Company in accordance with the requirements of the SEBI ICDR Regulations to illustrate the impact of a significant acquisition as mentioned above, made after the date of the latest period for which financial information is disclosed in this Draft Red Herring Prospectus but before the filling of DRHP as if the acquisition had taken place:
(i) on March 31, 2023 for the purpose of unaudited proforma consolidated balance sheet and
(ii) on April 01, 2022 for the purpose of unaudited proforma consolidated statement of profit and loss.
The unaudited proforma consolidated financial information are derived from restated consolidated summary statements of the Group, audited consolidated Ind AS financial statements of Chartered Group as of March 31, 2023, adjusted for intercompany eliminations and acquisition adjustments for subsequent acquisition mentioned above, as if the transaction related to such acquisition to obtain control over Chartered Group had occurred on March 31, 2023 for the purpose of unaudited proforma consolidated balance sheet.
Further, the unaudited proforma consolidated statement of profit and loss for the year ended March 31, 2023 has been illustrated to reflect the acquisition of Chartered Group as if the transaction related to acquisition of aforesaid to obtain control over Chartered Group occurred on and from April 01, 2022
The unaudited proforma consolidated financial information are presented in Indian Rupees (Rs) which is also the Groups functional currency.
The assumptions and estimates underlying the adjustments to the unaudited proforma consolidated financial information are described hereinafter which should be read together with the unaudited proforma consolidated statement of profit and loss and unaudited proforma consolidated balance sheet.
The unaudited proforma consolidated financial information are prepared using uniform accounting policies for the like transactions and other events in similar circumstances. The financial statements of all entities used for the purpose of unaudited proforma consolidated financial information are drawn up to the same reporting date as that of our Company, i.e., year ended on March 31, 2023.
The unaudited proforma consolidated financial information should be read together with the Groups s restated consolidated summary statements and the audited consolidated financial statements of Chartered Group.
The business combination has been accounted for under the acquisition method in accordance with Ind AS 103 Business Combinations. Accordingly, Group has provisionally allocated the purchase consideration to the estimated fair value of assets acquired and liabilities assumed and recognised the difference between purchase consideration and net assets as goodwill in the unaudited proforma consolidated combined balance sheet as of March 31, 2023.
The proforma consolidated financial information were approved by the Board of Directors of our Company on September 22, 2023.
Because of their nature, the unaudited proforma consolidated financial information addresses a hypothetical situation and therefore, do not represent Groups factual financial position or results. Accordingly, the unaudited proforma consolidated financial information does not necessarily reflect what the Groups financial condition or results of operations would have been had the acquisitions occurred on the dates indicated and is also not intended to be indicative of expected financial position or results of operations in future periods. The actual balance sheet and statement of profit and loss may differ significantly from the proforma amounts reflected herein due to variety of factors.
The proforma adjustments are based upon available information and assumptions that the management of our Company believes to be reasonable. Further, such unaudited proforma consolidated financial information has not been prepared in accordance with standards and practices acceptable in any other jurisdiction and accordingly, should not be relied upon as if it had been carried out in accordance with standards and practices in any other jurisdiction. Accordingly, the degree of reliance placed by anyone on such unaudited proforma consolidated financial information should be limited. In addition, the rules and regulations related to the preparation of unaudited proforma consolidated financial information in other jurisdictions may also vary significantly from the basis of preparation as set out in paragraphs above to prepare these unaudited proforma consolidated financial information.
The restated consolidated financial statements have been adjusted in the unaudited proforma consolidated financial information to give effect to the proforma event that are (1) directly attributable to such acquisition and
(2) factually supportable.
The proforma consolidated financial information has been prepared taking into consideration:
(1) the restated consolidated summary statement of assets and liabilities as of March 31, 2023 and restated consolidated summary statement of profit and loss accounts of the Group for the year ended March 31, 2023;
(2) the audited Consolidated Ind AS Financial Statements of Chartered Group as of and for the year ended March 31, 2023;
(3) intra group elimination between the Group and Chartered Group, if any, as of March 31, 2023 and for the year ended March 31, 2023;
(4) adjustments to the unaudited proforma consolidated financial information arising from balances between the Group and the acquired entity during the year ended March 31, 2023 for the purpose of unaudited consolidated proforma Balance sheet;
(5) adjustments to the unaudited proforma consolidated financial information arising from transactions between the Group and the acquired entity during the year ended March 31, 2023 for the purpose of unaudited consolidated proforma Statement of Profit and Loss,
(6) adjustments to recognise the impact of allocation of purchase consideration paid/payable by our Company.
Results of Operations based on our Proforma Consolidated Financial Information
The following table sets forth select financial information from our Proforma Consolidated Financial Information for Fiscal 2023:
| Fiscal 2023 | ||||||
| Particulars | Our Company (Restated Consolidated) | Acquisitions CHPL | Pro-forma Adjustment s | Adjustments Intra company elimination | Total Adjustments | Proforma Consolidated Financial Information |
| (A) | (B) | (C) | (D) | (E) | F=(A+B+ E) | |
| (Rs million) | ||||||
| Revenue from operations | 6,668.54 | 1,043.74 | - | - | - | 7,712.28 |
| Other income | 504.34 | 61.00 | - | - | - | 565.34 |
| Total income | 7,172.88 | 1,104.74 | - | - | - | 8,277.62 |
| Expenses | ||||||
| Food and beverages consumed | 503.60 | 108.46 | - | - | - | 612.06 |
| Employee benefits expense | 989.49 | 182.43 | - | - | - | 1,171.92 |
| Finance costs | 2,663.60 | 266.43 | - |
- |
- |
2,930.03 |
| Depreciation and amortization expense | 815.21 | 85.40 | 19.97 | - | 19.97 | 920.58 |
| Other expenses | 2,456.17 | 457.59 | 8.40 | - | 8.40 | 2,922.16 |
| Total expenses | 7,428.07 | 1,100.31 | 28.37 | - | 28.37 | 8,556.75 |
| Profit/ (loss) before tax | (255.19) | 4.43 | (28.37) | - | (28.37) | (279.13) |
| Tax expense | ||||||
| Current tax | - | 10.91 | - | - | - | 10.91 |
| Deferred tax | (240.22) | (29.85) | ( 6.98) | - | (6.98) | (277.05) |
| Total tax expenses | (240.22) | (18.94) | ( 6.98) | - | (6.98) | (266.14) |
| Fiscal 2023 | ||||||
| Particulars | Our Company (Restated Consolidated) | Acquisitions CHPL | Pro-forma Adjustment s | Adjustments Intra company elimination | Total Adjustments | Proforma Consolidated Financial Information |
| (A) | (B) | (C) | (D) | (E) | F=(A+B+ E) | |
| (Rs million) | ||||||
| Profit/ (loss) for the year | (14.97) | 23.37 | (21.39) | - | (21.39) | (12.99) |
| Other Comprehensive Income for the year | ||||||
| Items that are not to be reclassified to profit or loss in subsequent periods | ||||||
| - Remeasurements of net defined benefit plans | (5.58) | 1.93 | (3.65) | |||
| - Income tax relating to above | 1.95 | (0.50) | - | 1.45 | ||
| - Equity Instruments through Other Comprehensive Income | (0.05) | (0.05) | ||||
| - Income tax relating to above | (0.15) | - | (0.15) | |||
| Total Other comprehensive income/ (loss) for the year, net of tax | (3.63) | 1.23 | (2.40) | |||
| Total Comprehensive Income for the year, net of tax | (18.60) | 24.60 | ( 21.39) | (21.39) | (15.39) |
Total Income. Our proforma total income was Rs8,277.62 million in Fiscal 2023 comprising total income of: (a) JHL of Rs7,172.88 million and (b) CHPL of Rs1,104.74 million.
Revenue from operations. Proforma revenue from operations was Rs7,712.28 million in Fiscal 2023, comprising revenue from operations of (a) JHL of Rs6,668.54 million and (b) CHPL of Rs1,043.74 million.
Other income. Proforma other income was Rs565.34 million in Fiscal 2023, comprising other income of: (a) JHL of Rs504.34 million; and (b) CHPL of Rs61.00 million.
Expenses. Proforma total expenses was Rs8,556.75 million in Fiscal 2023, comprising total expenses of (a) JHL of Rs7428.07; and (b) CHPL of Rs1,100.31 million.
Food and beverages consumed. Proforma food and beverages consumed was Rs612.06 million in Fiscal 2023, comprising food and beverages consumed of (a) JHL of Rs503.60 million; and (b) CHPL of Rs108.46 million.
Employee benefits expense. Proforma employee benefits expenses was Rs1,171.92 million in Fiscal 2023, comprising employee benefits expense of (a) JHL of Rs989.49 million; and (b) CHPL of Rs182.43 million.
Finance costs. Proforma finance costs was Rs2,930.03 million in Fiscal 2023, comprising finance costs of (a) JHL of Rs2,663.60 million; and (b) CHPL of Rs266.43 million.
Depreciation and amortization expense. Proforma depreciation and amortization expense was Rs920.58 million in Fiscal 2023, comprising depreciation and amortization expense of (a) JHL of Rs815.21 million; (b) CHPL of Rs85.40 million; and (c) proforma adjustment of Rs 19.97 million to depreciation, on account of increase in fair value of plant, property and equipment.
Other expenses. Proforma other expenses was Rs2,922.16 million in Fiscal 2023, comprising other expenses of (a) JHL of Rs2,456.17 million; (b) CHPL of Rs457.59 million; and (c) proforma adjustments of Rs8.40 million, in relation to acquisition costs which were incurred in Fiscal 2023 by the Company in connection with the CHPL Acquisition.
Proformaprofit/(loss) before tax. Proforma loss before tax was Rs279.13 million in Fiscal 2023, comprising (a) loss before tax of JHL of Rs255.19 million; (b) profit after tax of CHPL of Rs4.43 million; and (c) proforma loss adjustments of Rs28.37 million as stated above.
Tax expenses. Proforma total tax expenses was a tax reversal of Rs266.14 million in Fiscal 2023, comprising (a) deferred tax reversal of JHL of Rs240.22 million; (b) current tax of CHPL of Rs10.91 million and a reversal of deferred tax of CHPL of Rs29.85 million; and (c) proforma adjustments in relation to reversal of deferred tax liability of Rs6.98 million due to additional depreciation charge has been considered in the unaudited proforma consolidated statement of profit and loss for Fiscal 2023.
Proforma profit/(loss) for the year. Proforma loss for Fiscal 2023 was Rs12.99 million, comprising (a) JHLs loss for the year of Rs14.97 million; (b) CHPLs profit for the year of Rs23.37 million; and (c) proforma loss adjustments of Rs21.39 million, as stated above.
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