1.1 Company overview

Asian Hotels (East) Limited is a Public Limited Company listed with Bombay Stock Exchange and National Stock Exchange and is primarily engaged in the Hotel business through “Hyatt Regency Kolkata" a five-star Hotel situated in the city of Kolkata.

1.2. Basis of preparation of financial statement

These financial statements are prepared in accordance with Indian Accounting Standards (Ind AS) under the historical cost convetion on the accrual basis except for certain financial instruments which are measured at fair values, and the provisions of the Companies Act , 2013 ('Act') (to the extent notified). The Ind AS are prescribed under Section 133 of the Act read with Rule 3 of the Companies (Indian Accounting Standards) Rules, 2015 and Companies (Indian Accounting Standards) Amendment Rules, 2016.

Accounting policies have been consistently applied except where a newly issued accounting standard is initially adopted or a revision to an existing accounting standard requires a change in the accounting policy hitherto in use.

The financial statements are approved for issue by the Company's Board of Directors on May 09 , 2018

1.3 Functional & Presentation Currency

These Financial statements are presented in Indian Rupees (INR) which is also the company's functional currency.

1.4 Use of estimates

The preparation of the financial statements in conformity with Ind AS requires management to make estimates, judgments and assumptions. These estimates, judgments and assumptions affect the application of accounting policies and the reported amounts of assets and liabilities, the disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of revenues and expenses during the period. Although these estimates are based on the management's best knowledge of current events and actions, uncertainty about these assumptions and estimates could result in the outcomes requiring a material adjustment to the carrying amounts of assets or liabilities in future periods. Changes in estimates are reflected in the financial statements in the period in which changes are made and, if material, their effects are disclosed in the notes to the financial statements.

* The Company maintains an overdraft account and has given revolving letter of credit to West Bengal State Electricity Distribution Company Limited secured against fixed deposits.

**Transfer of unclaimed dividend and shares to the IEPF

Pursuant to the provisions of Section 124 & 125 of the Companies Act, 2013 read with the Investor Education and Protection Fund (IEPF) Authority (Accounting, Audit, Transfer and Refund) Rules, 2016 (the Rules), ? 4,09,623/- and 73,623 shares have been transferred to the IEPF for the dividend declared in the financial year ended 2009-10 and the respective shares whose dividend remained unpaid or unclaimed for seven consecutive years. Further, 11 2,390/- and its respective 4,130 shares being restrained shares could not be transferred to the IEPF pursuant to Rule 6(3)(b) of the Rules, the due date of transfer of which was November 4, 2017.

Terms/rights attached to Equity Shares

The Company has only one class of equity shares having a par value of Rs. 10/- per share. Each holder of equity shares is entitled to one vote per share.

In the event of liquidation of the Company, the holders of equity shares will be entitled to receive remaining assets of the Company, after distribution of all preferential amounts. The distribution will be in proportion to the number of equity shares held by the shareholders.

Fair value hierarchy

This section explains the estimates and judgements made in determining the fair values of Financial Instruments that are measured at fair value and amortised cost and for which fair values are disclosed in financial statements. To provide an indication about reliability of the inputs used in determining the fair values, the company has classified its financial instruments into the three levels prescribed under accounting standards. An explanation of each level follows underneath the table:

Level 1 : Includes financial Instrument measured using quoted prices (unadjusted) in active markets for identical assets and liabilities that the entity can access at the measurement date.

Level 2 : Includes financial Instruments which are not traded in active market but for which all significant inputs required to fair value the instrument are observable. The fair value is calculated using the valuation technique which maximises the use of observable market data.

Level 3: Includes those instruments for which one or more significant input are not based on observable market data.

The carrying amount of cash and cash equivalents, trade receivables, loans, other financial assets, trade payables and other financial liabilities are considered to be the same as their fair value due to their short term nature and are close approximation of fair value. The Company's investment in the equity shares of its subsidiaries is recognised at cost. The company has elected to apply previous GAAP carrying amount of its equity investment in subsidiaries as deemed cost as on the date of transition to Ind AS

2. FINANCIAL RISK MANAGEMENT

Financial risk factors

The Company's activities expose it to a variety of financial risks : market risk, liquidity risk and credit risk.

Market risk

The primary market risk to the Company is foreign exchange risk. The Company is exposed to foreign exchange risk through its purchases from overseas suppliers and payment for services availed in various foreign currencies. The Company pays off its foreign exchange exposure within a short period of time, thereby mitigates the risk of material changes in exchange rate on foreign currency exposure.

Liquidity risk

Liquidity risk is the risk that the Company will encounter difficulty in meeting its obligations associated with its financial liabilities. The Company's principle source of liquidity are cash and cash equivalent, cash flows from operations and investment in mutual funds. The Company has no outstanding bank borrowings as on 31st March 2018. The Company believes that working capital is sufficient to meet its current requirements. Accordingly, no liquidity risk is perceived.

Credit risk on cash and cash equivalent is limited as the Company generally invest in deposits with nationalised banks. Investments primarily include investments in liquid mutual fund units, quoted bonds and investment in subsidiaries. Loans are provided to subsidiary and are in the nature of short term as the same is repayable on demand.

3. CAPITAL MANANGEMENT

For the purpose of managing capital, Capital I ncludes issued equity share capital and reserves attributable to the equity holders. The objective of the company's capital management are to:

- Safeguard their ability to continue as going concern so that they can continue to provide benefits to their shareholders.

- Maximising the wealth of the shareholder.

- Maintain optimum capital structure to reduce the cost of the capital.

The Company manages its capital structure and makes adjustments in light of changes in economic conditions and requirement of financial covenants. In order to maintain or adjust the capital structure, the Company may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares . The company monitors capital using a gearing ratio, which is net debt divided by total capital plus net debt. The Company includes within net debt, loans and borrowings , less cash and cash equivalents.

In order to achieve this overall objective, the Company's capital management, amongst other things, aims to ensure that it meets financial covenants attached to the loans and borrowings that define capital structure requirements. There have been no breaches in the financial covenants of any loans and borrowing in the current period.

No changes were made in the objectives, policies or processes for managing capital during the years ended 31 March 2018 and 31 March 2017.

4. As the Company is engaged in only one segment of Hotel Business, the disclosure requirements of Accounting Standard (Ind AS-108) on “Operating Segment" are not applicable. Further the Company operates only in India; hence additional information under geographical segments is also not applicable.

The Joint Managing Director of the Company has been identified as the Chief Operating Decision Maker ( CODM).

The Chief Operating Decision Maker also monitors the operating results as one single segment for the purpose of making decisions about resource allocation and performance assessment and hence, there are no additional disclosures to be provided other than those already provided in the financial statements.

5. In the opinion of the Board, all the assets of the Company have a value on realization in ordinary course of business at least equal to the amount at which they are stated. Therefore, the Company has not recognised any loss on impairment in respect of any of the assets of the Company. In respect of subsidiaries, such decision is based on the audited accounts of the subsidiaries.

b) Defined benefit plans

i. Contribution to Gratuity fund

ii. Compensated absences Earned leave

In accordance with Indian Accounting Standard 19, Employee Benefits, actuarial valuation was done in respect of the aforesaid defined plans based on the following assumptions: -

Economic Assumptions

The discount rate and salary increases assumed are key financial assumptions and should be considered together; it is the difference or ‘gap' between these rates which is more important than the individual rates in isolation.

Discount Rate

The discounting rate is based on the gross redemption yield on medium to long-term risk free investments. For the current valuation a discount rate of 7.80 % p.a. compound, has been used.

Salary Escalation Rate

The salary escalation rate usually consists of at least three components, viz. Regular increments, price inflation and promotional increases. In addition to this any commitments by the management regarding future salary increases and the Company's philosophy towards employee remuneration are also to be taken into account. Again a long- term view as to the trend in salary increase rates has to be taken rather than be guided by the escalation rates experienced in the immediate past, if they have been influenced by unusual factors.

Notes:

1. The discount rate is based on the prevailing market yields of Indian Government securities as at the balance sheet date for the estimated term of obligations.

2. The estimates of rate of escalation in salary considered in actuarial valuation, take into account inflation, seniority, promotion and other relevant factors including supply and demand in the employment market.

3. The gratuity plan and earned leave is unfunded.

Demographic assumptions:

a. Retirement age : 58 years

b. Mortality rate : Published rates under Indian Assured Lives Mortality (IALM) Ultimate table

6. The disclosures relating to Micro, Small & Medium Enterprises Development Act, 2006 are as under :-

i. The amount due to Micro and Small Enterprises as defined in “The Micro, Small and Medium Enterprises Development Act, 2006" has been determined to the extent such parties have been identified on the basis of information collected by the management. This has been relied upon by the Auditors.

7. Estimated amount of Capital Contracts pending to be executed (Net of Advances – Rs.11,85,900 (Previous Year – Rs. Nil/-)

8. As on date, the Company holds 91,652 Equity shares of Rs 10 each of its subsidiaries, Regency Convention Centre and Hotels Limited (RCC), representing 58.99% of the paid up capital of RCC. Apart from the above, the Company had also made an advance of Rs.33,448,275 for acquiring further shares of RCC from their existing shareholders and paid advanes to RCC amounting to Rs.1,44,00,474 up to the Balance Sheet date which has been disclosed as current loans and advances.

Principal assets of Regency Convention Centre and Hotels Limited (RCC) comprise of an interest in a piece of land near CSI Airport at Mumbai. The RCC has filed Suit No. 6846 of 1999 in the High Court of Judicature at Bombay against the Airports Authority of India (AAI) & Ors. for specific performance of the agreement to lease 31,000 sq.mtrs. of land at village-Sahar, Andheri (East), Mumbai in its favour for construction of a five star hotel cum convention centre. The recording of evidence of the RCC's witness and the Defendants Nos. 2 to 16 have already been concluded and closed. The suit is pending of recoding of evidence of Defendant No. 1 i.e., AAI and for final arguments. Parties have asked the Court to expedite the matter.

Further, the RCC continues to engage in the dialogues with the parties concerned to amicably settle the disputes and exploring all available options. Considering the nature of dispute & involvement of all parties concerned, the settlement is a complex & difficult one, however, the RCC is hopeful of a positive outcome of its efforts.

9. The timing difference relating mainly to depreciation and unabsorbed losses result in net deferred credit as per IND AS 12 “Income Taxes". As a prudent measure the net Deferred Tax Assets' relating to the above has not been recognized in the financial statements.

10. The resolution for approval of the Scheme of Arrangement under Sections 230-232 of the Companies Act, 2013 between GJS Hotels Limited (GJSHL), the Company, Robust Hotels Private Limited ( RHPL ) and their respective Shareholders (the Scheme) was approved at the respective meetings of Equity Shareholders and Unsecured Creditors of the Company on Wednesday, 21st February, 2018 in terms of an Order dated 21st December, 2017 as modified by an Order dated 4th January, 2018 of the Hon'ble National Company Law Tribunal, Kolkata Bench. On 28th March 2018, the Scheme was filed with NCLT, Kolkata Bench for its sanction w.e.f 31 st March 2016 being the Appointed Date of the Scheme.

On the Scheme becoming sanctioned & effective in a future date, 43,00,000 12% Cumulative Redeemable Preference Shares of Rs.100/- issued by RHPL shall stand appropriated towards 3,20,35000 Equity Shares of Rs.10/- each credited as fully paid up in the Company at a premium of Rs.10/- per share & 1,55,00,000 0.1% Unsecured Cumulative Non-Convertible Debentures of Rs.100/- each issued by RHPL shall stand appropriated towards 3,79,75,000 Equity Shares of Rs.10/-each, credited as fully paid up, at a premium of Rs.10/- per share in GJSHL with effect from the Appointed Date & subsequently the Demerged Undertaking of the Company's wholly owned subsidiary GJSHL shall stand demerged to the Company and accordingly RHPL shall become wholly owned subsidiary of the Company.

11. Pursuant to the effectiveness of an Order of Calcutta High Court dated 23rd August, 2016 on the Scheme of Amalgamation involving the Company and Forex Finance Private Limited, the Company has become a shareholder of Asian Hotels (West) Limited (AHWL) & holding 4.58% of its paid-up equity share capital.

However, the above shares has become restrained due to an ex-parte Delhi High Court Order dated 19th August, 2015 wherein the court has asked the parties including the Company to maintain status quo on the shares and the Company is injuncted from exercising voting rights arising from the said shares. The Company has challenged the Order and has taken necessary legal actions to protect its rights. The matter is pending before Delhi High Court and the Company is hopeful of a positive outcome.

12. Previous Year figures have been regrouped / reclassified, wherever necessary to confirm to current year's classification.