1 Fundamental Concepts with proofs from Financial Stateme

Fundamental Concepts

Going Concern

Business Entity
Business Entity

Conservatism
Reliability
oncepts with proofs from Financial Statements

Proof
 2

Comments S.No.
- 1
2
3
4
5

Share Capital Represents the owner's money

in the business and indirectly how much does
the business owe them, representing
business entity concept
Revenue is recorded only when it is certain,
Plus revenue recognition concept is also
based on conservatism
Auditor's have checked the internal financial
controls and gave their opinion regarding the
adequateness of controls which are
necessary for the data to be reliable
Stakeholders and Relevant Information

Stakeholders
Providers of Financial Capital
Customers
Central Government
Employees
Shareholders
vant Information

Information available
Profit and growth figures
Product/ Service Information, sustainable practices data,
Auditor's opinion and Taxes Paid information, CSR resposibilities
Financial Statements of the company, human capital metrics
BEPS, DEPS, Statement of Changes in equity, BS, PL
 Comment
To know the financial health of the company and to assess its repaying capability, whether the money is safe in the
How are the new products/ services of the company performing, new areas they are planning to venture into
To assess if the company is fulliling its regulatory and prescribed requirements along with payment of appropriate ta
To assess the financial health of the company where they are working and maybe gauge their bargaining power
To assess the performance of the company where their money is invested
 1 Balance sheet equations

Assets Expenses Total = Total

3/31/2020 8906.58 2600.45 11507.03 11507.03
3/31/2021 9146.79 1559.39 10706.18 10706.18

Comment:
As we can see, the company has gone into a slight loss in the current year because of cov
subsequent fall in revenue but still the company was able to increase its non current asse
its current liabilities in the current year.
 2 Five biggest items in b
3/31/2021 S.No. Category
1 Asset
Equity Liability Incomes 2 Asset
4306.13 4323.02 2877.88 3 Liabilities
4524.1 4938.41 1243.67 4 Liabilities
5 Equity

n the current year because of covid and the

le to increase its non current assets and decrease 3/31/2020 S.No. Category
1 Asset
2 Asset
3 Liabilities
4 Liabilities
5 Equity

Comment We can clearly see the the figures that form th

on the asset side, are the fixed assets of the co
Liabilities and Equity majorly consists of Long t
company has and the reserves the surplus plus
 ve biggest items in balance sheet
Item Amount Proportion 9146.79
Investments 3964.18 43.33%
PPE 2492.03 27.24%
Long term borrowings 1938.79 21.20%
Other Financial Liabilities 1284 14.04%
Other Equity 4089.45 44.71%

Item Amount Proportion 8906.58

Investments 3742.78 42.02%
PPE 2421.66 27.19%
Long term borrowings 1708.61 19.18%
Lease Liabilities 956.22 10.74%
Other Equity 4464.63 50.13%

see the the figures that form the major part of the Balance sheet
e, are the fixed assets of the company and its investments.
quity majorly consists of Long term borrowings that the
nd the reserves the surplus plus other comprehensive income
 1 Income Statement Equation

Income - Comprehensive Expenses =

3/31/2020 2877.88 2600.45
3/31/2021 1243.67 1559.39

Comment:
The Income of the company has dratically reduced because of the covid 19 pandamic and
on the hotel industry. The company has still gone into portfolio expansion in every quarte
looking forward to recover strongly from this loss.
 2 Five biggest items in Incom
3/31/2021 S.No. Category
1 Income
Comprehensive Income/ Profit 2 Expenses
277.43 3 Expenses
-315.72 4 Expenses
5 Expenses

Comment
se of the covid 19 pandamic and its impact Revenue from operations include, room rent, shop re
rtfolio expansion in every quarter and Employee benefit expenses majorly consist of salarie
A major part of other operating expense is fuel, powe
st items in Income Statement
Item Amount Proportion
Revenue from operations 1133.15 91.11% % of total revenue
Employee benefit 538.64 34.54%
Finance cost 294.79 18.90%
Other operating exp 583.48 37.42%
Depreciation 203.81 13.07%

lude, room rent, shop rent, food, restaurants and banquet income
majorly consist of salaries, lease cost form a major part of finance cost
ng expense is fuel, power and lightning
 1 Identifying non cash items in P/L
S.No. Non- Cash Items Available in CFS
1 Changes in Fair Value of Derivative contracts yes
2 Provision for impairment in subsidiary/ JV yes
3 Allowance for doubtful debts and advances yes
4 Depreciation and Amortisation yes
5 Fair Valuation loss on derivatives yes
 2

Comment S.No.
Exceptional Items 1
Exceptional Items 2
Part of other operating expense in P/L 3
Part of PPE Schedule 4
Exceptional Items 5

Comment
During the year, the net cash used for investin
outlay on capital expenditure was ₹140.63 cro
During the year, the net cash from financing a
comprised additional long-term borrowings b
 Five biggest items in cash flow statemets
Item Head Item Name Type Current Year Balance
Investing Activities Purchase of PPE Outflow -215.47
Investing Activities Sale of Hotel Properties Inflow 31.69
Financing Proceeds from LTB Inflow 1040.57
Investing Activities Purchase non current investments Outflow -73
Financing Proceeds from STB Inflow 100.02

g the year, the net cash used for investing activities amounted to ₹383.60 crores, compared to ₹332.96 crores in the previous y
y on capital expenditure was ₹140.63 crores, a majority of which was for The Connaught, New Delhi, Taj Mahal Delhi and Taj Ex
g the year, the net cash from financing activities was ₹338.66 crores as against ₹235.35 crores used in the previous year. The fi
rised additional long-term borrowings by issue of debentures and term loans from banks and a financial institution amounting
 Previous Year Balance Change Comment
-487.39 271.92 Company has made less investment this year
0 31.69 Company sold some hotel properties, could be because of the pandemic
732.3 308.27 Borrowings have increased in current year
-3.36 -69.64 -
283.18 -183.16 -

.96 crores in the previous year. The Company’s

Taj Mahal Delhi and Taj Exotica, Andamans.
in the previous year. The financing activities
ncial institution amounting to ₹885.00 crores
because of the pandemic
1 Schedule and Accounting Entries
Schedule for other operating and general expenses (Note 27)
S.No. Entry Debit Entry Credit
1 P/L Rent
2 P/L Rates and Taxes
3 P/L Insurance

Assumption:
Finalisation entries mean the entries passed to prepare final accounts like Income statem
 Amount Narration
238,000,000.00 Expensed transferred to P/L account
452,300,000.00 Expensed transferred to P/L account
131,700,000.00 Expensed transferred to P/L account

nal accounts like Income statement.

2 Provisions made during the year
S.No. Provision Name
1 Provision for impairment of investment in subsidiary/ JV
2 Allowance for doubtful debts and advances
3 Provision for disputed claims
4 Provision for Employee benefits

Comment:

Provisions are made in the books of account to account for present probable obligations.
company has a certain degree of confidence on the estimations and certainity of outflow
economic resources in respect to above items, they have provided for and set aside some
these events, in the books of accounts.
 in Crores
Amount
180.30
9.81
9.99
8.80

sent probable obligations. Since the

s and certainity of outflow of
ded for and set aside some profit for
1 Key Components in Share Capital Portion
in crores
S.No. Item Amount

1 Issued and paid up share capital 118.93

2 Changes in Share Capital

Comment: There has not been any change in the Share Capital portion of the company,
 Portion 3

S.No.
Comment 1

Equity Share Capital 2

3
4

Share Capital portion of the company, for the last 2 years

4
IndAS 28 Deals with consolidation of
All of these subsidiaries are included i
Five biggest items of Other Equity
in crores
Item Amount Nature
Securities premium reserve 2702.06 Capital Reserve

Debenture redemption reserve 155.01 Revenue Reserve

General Reserve 622.88 Revenue Reserve

Capital Reserve 43.91 Capital Reserve

Retained Earnings 250.64 -

List of Related Parties included in Consolidated Financial Statements

dAS 28 Deals with consolidation of financial statements, parent company has to consolidate the accounts of subsidiary as we
of these subsidiaries are included in the consolidated financial statements, subsidiaries in which the company has a temporary
 Comment
Same as previous year
DRR is created to protect debenture holders from possibility of a company defaulting, now when
debentures are redeemed it is again transferred back to General Reserve, therefore it reduced from
187.40 to 155.01.
Increased from 590.49 by the virtue of balanced received from DRR
Same as previous year

Reduced from previous year because company has incurred a loss in CY

ncial Statements
te the accounts of subsidiary as well to present them as a whole
which the company has a temporary interest are excluded but we don't have that case here.
1 Common Size P/L

3/31/2021
Particulars Amount %
Income 1243.67 100%
Expenses
Food and Beverages Consumed 107.93 8.68%
Employee Benefit 538.64 43.31%
Finance Cost 294.79 23.70%
Depreciation 203.81 16.39%
Other Operating and General Expenses 583.48 46.92%
Total Expenses 1728.65 139.00%
P/L before exceptional items -484.98 -39.00%
Exceptional items -155.3 39.00%
P/L before tax -640.28 -30.32%
Tax Expense 115.2 73.63%
P/L after tax -525.08 -49.92%

Comment:
Total Expenses increased to 54% of respective revenue, maybe because revenue decreas
Profit after tax has decreased because the pandemic had a negative impact on the compa

2 Common Size P/L Comparison with Peer

3/31/2021
Indian Hotels Limited
Particulars Amount %
Income 1243.67 100%

Expenses
Food and Beverages Consumed 107.93 8.68%
Employee Benefit 538.64 43.31%
Finance Cost 294.79 23.70%
Depreciation 203.81 16.39%
Other Operating and General Expenses 583.48 46.92%
Total Expenses 1728.65 139.00%
P/L before exceptional items -484.98 -39.00%
Exceptional items -155.3 39.00%
 P/L before tax -640.28 -30.32%
Tax Expense 115.2 73.63%
P/L after tax -525.08 -49.92%

Comment
As we can see, our peer's total expenses are around 300% of its revenue while ours are o
this is the reason why we have been able to control loses while Leela hotels hasn't.

3 Index Based P/L

3/31/2021

Particulars Amount Index Number

Income 1243.67 43.21
Expenses
Food and Beverages Consumed 107.93 45.78
Employee Benefit 538.64 74.29
Finance Cost 294.79 124.10
Depreciation 203.81 100.01
Other Operating and General Expenses 583.48 57.11
Total Expenses 1728.65 71.32
P/L before exceptional items -484.98 -106.79
Exceptional items -155.3 946.95
P/L before tax -640.28 -146.27
Tax Expense 115.2 317.36
P/L after tax -525.08 -110.77

Comment
We can see, from our base year, the item which has the increased the most in terms of si
is our finance cost. We should evaluate if are successfully leveraging debt or not.
 in Crores
3/31/2020
Amount % Increase Decrease
2877.88 100%

235.74 8.19% 0.49%

725.07 25.19% 18.12%
237.55 8.25% 15.45%
203.78 7.08% 9.31%
1021.6 35.50% 11.42%
2423.74 84.22% 54.78%
454.14 15.78% -54.78%
-16.4 -0.57% 39.57%
437.74 15.21% -45.53%
36.3 1.26% 72.37%
474.04 16.47% -66.40%

be because revenue decreased significantly, although absolute number is small

egative impact on the company

In crores
3/31/2021
Hotel Leela Ventures Ltd.
Amount %
4413.78 100%

210.85 7.33%
2253.31 78.30%
229.89 7.99%
1351.7 46.97%
4726.77 164.24%
8772.52 304.83%
-4358.74 -151.46%
766.15 26.62%
 -3592.59 -124.83%
0 0.00%
-3592.59 -124.83%

its revenue while ours are only 140%,

ile Leela hotels hasn't.

in Crores
3/31/2020

Amount Base Year

2877.88 100.00

235.74 100.00
725.07 100.00
237.55 100.00
203.78 100.00
1021.6 100.00
2423.74 100.00
454.14 100.00
-16.4 100.00
437.74 100.00
36.3 100.00
474.04 100.00

eased the most in terms of significance

eraging debt or not.
4 Short-term solvency ratios
1 Cash cover for daily expenses

Cash
Average Daily Expenses

2 Current Assets cover for daily expenses

Current Assets
Average Daily Expenses

3 Current Liabilities cover for daily expenses

Current Liabilities
Average Daily Expenses

Year Ratio Name

3/31/2021
Cash Cover for Daily Expenses
3/31/2020
3/31/2021

3/31/2020 Current Asset cover for daily expenses

3/31/2021
3/31/2020 Current Liabilities cover for daily expenses

5 Long-term solvency ratios

1 Times Interest Coverage
EBIT/Interest

Year Ratio
3/31/2021 -0.645171138776756
3/31/2020 2.91176594401179
 2 Gearing
Net Debt/Equity

Particulars 3/30/2021
Borrowings 2591.79
Less: Cash and Cash equivalents 33.32
Less: Call and short term deposits 5.1
Less: Current Investments in Mutual funds 374.39
Net Debt 2178.98

Equity 4208.38
Gearing 0.517771684115978

6 Du Pont Analysis

ROE Summary
3/31/2021 -11.90%
3/31/2020 8.90%

(Net Profit Margin) x (Investment Turnover) x (Equity Multiplier)

3/31/2021
-42.20% Net Profit Margin
13.60% Investment Turnover
2.08072166097585 Equity Multiplier
-11.94% ROE

3/31/2020
13.90% Net Profit Margin
32.31% Investment Turnover
1.96454953514277 Equity Multiplier
8.82% ROE

Comment:
We can see that in the current year, the Net profit margin has declined significantly and as did our
investment turnover ratio also. Our revenue fell because of pandemic and therefore these ratios took
big hit. Our equity multiplier is more or less the same, but because the other ratios declined, our overa
ROE has also declined.
 Average Daily Expense= (COGS+Operating Expense+Tax-Depreciation)

Average Daily Expense= (COGS+Operating Expense+Tax-Depreciation)

Average Daily Expense= (COGS+Operating Expense+Tax-Depreciation)

Ratio Comment:
0.0218514729 We can see that our ratios are not healthy as we would not be able to support
our expenses effectively if suddenly our revenue falls. The ratios should be at
0.0592217878 least 1.
0.64665801

0.5005450549
1.2213412555
0.5381268131

Comment:
Our current year ratio is effectively 0, since our earning before interest and tax are neg
 Comment:
The company is maintaining a healthy capital structure, which is evident from its capita
structure ratios. This ratio increased marginally as company increased its borrowing to
3/30/2020 its liquidity position.
1943.32
131.47
15.15
408.72
1387.98

4583.56
0.30281702432

antly and as did our

efore these ratios took a
atios declined, our overall
-Depreciation)

-Depreciation)

-Depreciation)

not be able to support

he ratios should be at

before interest and tax are negative.

which is evident from its capital
any increased its borrowing to build