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Notes to Accounts of Asian Hotels (North) Ltd.

Mar 31, 2015

1. Corporate information

Asian Hotels (North) Limited ("the Company") is a public limited company domiciled in India and is listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE). The Company is operating a Five Star Deluxe Hotel, namely Hyatt Regency in Delhi since 1982.

2. Rights, preferences and restrictions 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. The Company declares and pays dividend in Indian rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. For the year ended 31st March 2015, the amount of per share dividend proposed as distribution to equity shareholders is Nil (31st March, 2014: Re. 1.00).

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.

(a) Deduction to Revaluation Reserve represents amount withdrawn on account of depreciation on the increased amount of assets due to revaluation and credited to the General Reserve based on guidance provided by "Application Guide on the Provisions of Schedule II to the Companies Act, 2013" issued by the Institute of Chartered Accountants of India.

Nature of security and terms of repayment for secured long-term borrowings:

(a) DBS Bank Limited - External commercial borrowings (carried interest from 4.10% to 5.95% per annum) are secured / to be secured by exclusive first charge of land & building of Hotel Hyatt Regency Delhi; personal guarantee of Chairman & Managing Director, pledge of shares representing Company's investment in foreign subsidiary Company. External commercial borrowings are repayable as under: (i). SGD 236.88 Lakhs is payable in 13 quarterly instalments up to June 2018; (ii). USD 416.05 Lakhs is payable in 8 semi-annual instalments up to October 2018 and; (iii). USD 90.72 Lakhs is payable in 10 semi-annual instalments up to October 2019.

(b) Axis Bank Limited - Rupee loan (carried interest from @ 12.50% to 13.00% per annum) is secured by first charge on six floors (Service Apartments) in the new tower/building in the existing Hyatt Regency Hotel complex, second exclusive mortgage charge on the land and building pertaining to the existing Hyatt Regency Hotel complex, first pari-passu hypothecation charge on the moveable fixed assets of the Company - both present & future and personal guarantee of Chairman & Managing Director. Repayable in unequal quarterly instalments up to March 2023 commenced from December 2014.

(c) IDBI Bank Limited - Rupee loan (carried interest @13.00% per annum) is secured by first pari-passu charge on land and building of existing Hotel block (Hyatt Regency Delhi) along with DBS Bank Limited (excluding new tower which is mortgaged exclusively to Axis Bank and ING Vysya Bank Limited); unconditional and irrevocable personal guarantee of Chairman & Managing Director. Repayable in 18 unequal quarterly instalments commencing from October 01, 2015.

(d) ING Vysya Bank Limited - Rupee loan Rs. 4,485.55 Lakhs (carried interest from @ 12.10% to 12.55% per annum) is secured by exclusive mortgage charge on two floors (Service Apartments) in the new tower/building in the existing Hyatt Regency Hotel complex, first pari-passu hypothecation charge on the moveable fixed assets of the Company - both present & future and personal guarantee of Chairman & Managing Director. Repayable in 84 monthly instalments up to September 2020, repayment started from October 2013. ING Vysya Bank - Rupee loan Rs. 1,881.42 Lakhs (carried interest @ 12.35% per annum) is secured by exclusive mortgage charge on new tower ground, lobby level floor, 3000 sq. ft. of sixth floor, first pari-passu charge on the moveable fixed assets in the existing Hyatt Regency Delhi and personal guarantee of Chairman and Managing Director, repayable in 84 monthly instalments, up to June 2021.

(e) Yes Bank Limited - Rupee loan (carried interest @ 12.50% per annum) is secured by first pari-passu charge on land & building of Hyatt Regency Delhi, second pari-passu charge on current assets (both present and future); unconditional and irrevocable personal guarantee of Chairman & Managing Director and Mr. Amritesh Jatia, Director; Repayable in 32 quarterly instalments by January 2024 starting from April 2016.

(f) ICICI Bank - Rupee loan (carried interest @ 11.41% per annum) is secured against hypothecation of 16 vehicles. Balance repayable in monthly instalments up to June 2016.

(g) ING Vysya Bank - Rupee loan for business of generation of electricity (carried interest from @ 12.10% to 12.55% per annum) is secured by first charge and/or hypothecation of freehold land, plant & machinery and book-debts pertaining to the windmill situated at Sinner in Maharashtra and personal guarantee of Chairman & Managing Director. Balance repayable in 5 equal instalment up to October 2016.

(h) Axis Bank - Rupee loan for acquisition of vehicles (carried interest @ 9.32% to 11.12% per annum) is secured against hypothecation of certain vehicles. Balance repayable in monthly instalments up to July 2016.

(i) IFCI Ltd - Rupee loan (carried interest @14.95% per annum) is secured by first pari-passu charge on land & building of Hyatt Regency Delhi (excluding Serviced Apartment Tower and land underneath) and second charge on a portion of the property i.e. 6 floors from first floor to sixth floor with super built-up measuring 47695 sq. ft. (excluding 3000 sq. ft. super built-up on sixth floor, 5335 sq. ft. super built-up area on fifth floor, 985 sq. ft. super built-up area on third floor and 985 sq. ft. super built-up area on second floor) in the Serviced Apartment Tower, first charge and/or hypothecation of freehold land, plant & machinery situated at Sangola in Maharashtra and personal guarantee of Chairman & Managing Director. Repayable in 18 equal instalment commencing from 15th October, 2016.

(j) Kotak Mahindra Prime Limited - Rupee loan for acquisition of vehicles (carried interest @ 8.75% to 10.45% per annum) is secured against hypothecation of certain vehicles. Balance repayable in monthly instalments up to December 2018.

(k) There is no continuing default in repayment of loans and interest as on 31st March, 2015. However, during the year there was a delay in repayment of foreign currency term loan and certain delays in interest payments.

(a) DBS Bank Limited - Overdraft facilities (carries interest @ 12.00% per annum) and is secured against hypothecation of Inventories of Hotel Hyatt Regency Delhi.

(b) Yes Bank Limited - Over draft facilities (carried interest @ 11.50% per annum) is secured by pledge on shareholding of Chairman & Managing Director, his associates, Asian Holdings Private Limited and other group companies (total 7.2%) in the Company; Exclusive charge by way of equitable mortgage of properties owned by two other group companies of Chairman & Managing Director; pledge on 30% shareholding of Chairman & Managing Director in RSJ Developers Private Limited; unconditional and irrevocable personal guarantee of Chairman & Managing Director and unconditional, irrevocable corporate guarantee of WEL Intertrade Private Limited and unconditional and irrevocable personal guarantee of Mr. Amritesh Jatia, Director.

(c) ING Vysya Bank Limited - Overdraft facilities (carried interest @ 12.10% per annum) is secured against hypothecation of stocks and book debts of Hotel Hyatt Regency Delhi.

(d) IDBI Bank Limited - Overdraft facilities (carried interest @ 12.75% per annum) is secured against first pari-passu charge on Hyatt Regency Delhi (excluding Serviced Apartment Tower).

(e) Inter-corporate loans amounting to Rs. 2,685.00 Lakhs are subject to confirmation/reconciliation with respective parties as at 31st March, 2015.

(f) There is no continuing default in repayment of loans and interest as on 31st March 2015.

(a) Advances from customers includes Rs. 275.00 Lakhs (Previous Year Rs. 7,707.97 Lakhs) received from prospective buyers against agreements for sale/ fit outs of certain constituents forming part of the Serviced Apartment Tower. These advances are subject to agreements/ memorandum of understandings and confirmations/ reconciliations.

(b) Security deposits (interest free) includes Rs. 1,300.00 Lakhs (Previous Year Rs. 1,400.00 Lakhs) received from a company in which certain relatives of directors of the Company are interested, Rs. 1,330.00 Lakhs (Previous Year Nil) received from Newtown Hospitality Pvt. Ltd. (a subsidiary company) and Rs. 3,690.00 Lakhs (Previous Year Rs. 3,020.00 Lakhs) received from other entities against expression of interest for a Joint Venture in respect of its KOLKATA PROJECT. {Refer Note 14(a) to the standalone financial statements}. All these security deposits are subject to agreements/ memorandum of understandings and Rs. 3,500 Lakhs are subject to confirmations/ reconciliations.

(c) Statutory liabilities includes provision for difference of property tax along with interest thereon amounting to Rs. 5,159.27 Lakhs (Previous Year Rs. 3,121.80 Lakhs) {Refer Note 27A(d) to the standalone financial statements}.

(a) The Company, based on the report by a Certified Valuer, had revalued land and building of Hotel Hyatt Regency Delhi (the land and building being more than twenty years old) by adopting Cost of Contractor's method, on 28th February, 2007 at Rs. 85,700 Lakhs. The same resulted in an increase in the value of land and building of an amount of Rs. 82,131.81 Lakhs, and therefore, an equivalent amount had been credited to the Revaluation Reserve.

(b) Due to increase in the value of assets, as stated above, there was an additional charge of Rs. 86.77 Lakhs (Previous Year Rs. 53.91 Lakhs), for the current year, on account of depreciation. Resultantly, an equivalent amount of Rs. 86.77 Lakhs (Previous Year Rs. 53.91 Lakhs) has been withdrawn from the Revaluation Reserve and credited to the General Reserve (Previous Year credited to the Statement of Profit and Loss). The increase in current year charge is attributable to the reassessment done due to the facts as mentioned in Note 12 (c) below.

(c) The management reassessed the remaining useful life of the Company's fixed assets with effect from 1st April, 2014, as prescribed in Schedule II to the Act. Due to the said reassessment, the depreciation for the year ended 31st March, 2015 increased by Rs. 846.64 Lakhs. Further, based on transitional provision as provided in Note 7(b) of the said Schedule II, an amount of Rs. 252.70 Lakhs is also included in depreciation for the year ended 31st March, 2015 from which an amount of Rs. 170.71 Lakhs (net of deferred tax Rs. 81.99 Lakhs) has been adjusted against the opening balance of retained earnings, representing the carrying amount of the assets whose remaining useful life is nil.

(d) Additions during the year to Land (freehold)-Refer Note 14(a) to the standalone financial statements.

(h) Delhi Development Authority vide Notification No. 2034E dated 12.08.2008 has, subject to fulfillment of certain conditions, granted an additional FSI, which in case of the Company, works out to approx. 15000 square meters. The Company has utilized most of the aforesaid additional FSI up till 31st March, 2015 and capitalised.

(i) During the year, the sale of further two floors in Serviced Apartment Tower/Building has been recognized and registered sale deed in respect of the sale of these areas has also been executed. Further, the long-term lease of certain further areas in Serviced Apartment Tower/Building has been executed and registration of said deeds in respect of these areas has also been executed. The same has been treated as sale of fixed assets and the cost of said area being de-capitalized during the current year. The gain on said sales/long-term leases has been included in "Other Income".

3. CONTINGENT LIABILITIES AND COMMITMENTS

31st March 2015 31st March 2014

(Rs. In Lakhs) (Rs. In Lakhs)

A CONTINGENT LIABILITIES

(a) Claims against the Company not acknowledged as debts* 20.00 20.00

* pertains to cases filed by certain employees of the Company

(b) Income tax demand/ liabilities not provided for* 85.79 74.48

* includes income tax demand of Rs. 5.53 Lakhs (Previous Year Rs. 21.13 Lakhs)

* includes contingent liability of Rs. 80.26 Lakhs (Previous Year Rs. 53.35 Lakhs) on account of taxes as are required to be withheld by the Company, as per the latest order of Assessing Officer from the payment to a foreign service provider. However, during the earlier years the Company was getting Nil withholding tax order for the same. The Company has gone into appeal with appropriate authorities against this order. As per the agreement with the foreign service provider the payments to be made to him shall be without any deduction of taxes, however, if there are any withholding taxes the same are to be borne by the Company. Confident of getting a Nil withholding tax order, the Company has not provided for the amount.

(c) Service tax demand not provided for* 401.10 401.10

* includes demand raised by Service Tax Authorities amounting to Rs. 401.10 Lakhs (Previous Year Rs. 401.10 Lakhs) including penalty demand of Rs. 250.00 Lakhs and excluding interest for earlier years up to 2007, against which the Company has filed an appeal with Customs, Excise and Service Tax Appellate Tribunal, New Delhi on 11th March, 2014. The Company is contesting to have already paid the determined balance liability without penalty before the issuance of show cause notice by Service Tax Authorities.

Hence, the Company may not be liable to pay any demand and penalty. Further, the Company is examining in detail certain transactions for applicability of service tax and will recognise and deposit the same if applicable on completion of such determination.

(d) The Federation of Hotels & Restaurants Association of India (FHRAI) and the Company had filed a writ petition in the High Court of Delhi against the "Unit Area Scheme", the new method for payment of property tax introduced by Municipal Corporation of Delhi (MCD) w.e.f. 1st April, 2004. In terms of the interim order dated 10th September, 2004, passed by the Hon'ble High Court of Delhi in the said matter, the Company has, so far, been paying a sum of Rs. 54.52 Lakhs per annum based on the Rateable Value Method, existing prior to the new method. In a subsequent development, vide order dated 23rd May, 2014, the Hon'ble High Court directed the petitioners to pay the property tax based on user factor of 4 and the rate of tax at 10% of the annual value, including all arrears, till the final adjudication of the matter. However, as a matter of abundant caution, the Company has provided for the property tax under the "Unit Area Scheme" based on the user factor of 10 and the rate of tax at 10% of the annual value up to Financial Year 2009-10 and 20% for the subsequent financial years. Such provision appears as expense under Rates and Taxes (Other Expenses) including for earlier years amounting to Rs. 1,417.12 Lakhs.

(e) Relating to an accident in the hotel Hyatt Regency Delhi premises, a writ petition has been filed with Delhi High Court by a relative of the injured person, the Company has been made one of the respondents. Any consequence on the outcome of the case can not be ascertained.

(B) COMMITMENTS 31st March 2015 31st March 2014

(Rs. In Lakhs) (Rs. In Lakhs)

(a) Estimated amount of contracts remaining to be executed on capital account and not 713.89 1,752.80 provided for

(b) Lease commitments

(i) Future commitments in respect of assets acquired under Finance Schemes:

Minimum installments payable within one year 58.63 53.02

later than one year but not later than five years 86.27 44.10

Present value of payable within one year 48.52 46.52 minimum instalments later than one year but 73.43 40.64 not later than five years

(ii) Future minimum lease amounts receivable by the Company in respect of non-cancellable operating leases (other than land) for shops and apartments entered into by the Company:

Not later than one year 78.23 48.60

Later than one year and not later than five years 67.01 73.51

(iii) Future minimum lease amounts payable by the Company in respect of non-cancellable operating leases (other than land) for other services (including rented premises) entered into by the Company :

Not later than one year 146.62 95.97

Later than one year and not later than five years 28.82 263.55

More than five years 182.73 -

4. SEGMENT REPORTING

The Company operates only in one reportable segment, i.e. Hospitality/Hotel Business at one location, namely New Delhi (India). The other business segment, i.e. power generation, though governed by different sets of risks and returns, however, is not a reportable segment as defined under the Accounting Standard (AS)-17 on Segment Reporting, and therefore, no separate disclosures have been made. The assets, liabilities and revenues relating to the said power generation business have, however, been disclosed in the accounts separately. The above treatment is in accordance with the guiding principles enunciated in the said Accounting Standard.

5. RELATED PARTY DISCLOSURES AS PER ACCOUNTING STANDARD - 18 :

(a) Individual and his relatives having control over the Company (either directly or indirectly)

(i) Mr. Amritesh Jatia, Director

(ii) Mr. Shiv Kumar Jatia, Chairman & Managing Director

(b) Group Companies which significantly influence the Company (either individually or with others)

(i) Yans Enterprises (H.K.) Limited, an overseas entity

(ii) Fineline Holdings Limited, an overseas entity

(c) Group Companies which are significantly influenced by the Company (either individually or with others)

(i) Fineline Hospitality & Consultancy Pte Limited, Mauritius, a wholly owned subsidiary company

(ii) Lexon Hotel Ventures Limited, Mauritius, a subsidiary company

(iii) Leading Hotels Limited, India, a subsidiary company

(iv) Newtown Hospitality Private Limited, a wholly owned subsidiary company (w.e.f. 26th February, 2014)

(d) Related Parties

* Subsidiaries Fineline Hospitality & Consultancy Pte Limited

Lexon Hotel Ventures Limited Leading Hotels Limited

Newtown Hospitality Private Limited (w.e.f. 26th February, 2014)

* Key Management Personnel

Mr. Shiv Kumar Jatia Chairman & Managing Director

* Relative of Key Management Personnel

Mr. Amritesh Jatia Director and son of Mr. Shiv Kumar Jatia

Mrs. Archana Jatia Director and wife of Mr. Shiv Kumar Jatia

Mr. Ramesh Jatia Brother of Mr. Shiv Kumar Jatia

Mr. Raj Kumar Jatia Brother of Mr. Shiv Kumar Jatia

- Entities controlled by Ascent Hotels Private Limited Directors or their M/s Bhasin & Co. relatives (with whom Binaguri Tea Company Private Limited transactions current year or previous year) entered into during Energy Infrastructure (I) Limited Magus Estates & Hotels Limited

6. EMPLOYEE BENEFITS

The Company has classified the various benefits provided to employees as under:-

(a) Defined contribution plans

* Provident fund

The Company has recognized the following amounts in the statement of profit and loss:

Employers' contribution to provident fund :- Current Year Rs. 193.33 Lakhs (Previous Year Rs. 205.37 Lakhs)

(b) Defined benefit plans

* Gratuity

* Compensated absences - Earned leave

In accordance with Accounting Standard-15 (revised 2005), actuarial valuation was done in respect of the aforesaid defined benefit plans based on the following assumptions-

Economic Assumptions

The discount rate and salary increases assumed are the 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. The estimated term of the benefits/obligations works out to zero years. For the current valuation a discount rate of 8.50% p.a. (Previous Year 8.50% 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 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.

7. DUE TO MICRO, SMALL AND MEDIUM ENTERPRISES AS DEFINED UNDER THE MSMED ACT, 2006

As per the information available and explanations provided to us and certified by the management, there are no amounts due to any Micro, Small and Medium Enterprises which are outstanding for more than 45 days together with interest at the balance sheet date as defined under the Micro, Small and Medium Enterprise Development Act, 2006.

8. CORPORATE SOCIAL RESPONSIBILITY (CSR)

Pursuant to the provisions of Section 135(5) of the Act, the Company has formed its CSR Committee. As per the relevant provisions of the Act read with Rule 2(1)(f) of the Companies (Corporate Social Responsibility Policy) Rules, 2014, the Company is required to spend at least 2% of the average net profits (determined under Section 349 of the Companies Act, 1956, read with Section 198 of the Act) made during the immediately preceding three financial years.

(a) Gross amount required to be spent by the Company during the year: Rs. 76.88 Lakhs

9.DERIVATIVE INSTRUMENTS AND UN-HEDGED FOREIGN CURRENCY EXPOSURE

(a) Derivatives outstanding as at 31st March, 2015

Particulars Purpose

Forward contract to buy US$

Nil (Previous year US$ 5,816,502) Hedge of future repayment of loans

{Nil (Previous year Rs. 3,495.71 Lakhs)}

10. OTHER NOTES

(a) Due to inadequacy of profit in the Financial Year 2013-14, the minimum remuneration paid to Mr. Shiv Kumar Jatia as Managing Director in terms of the shareholders' ordinary resolution dated 28th September, 2010, was in excess by an amount of Rs. 61.72 Lakhs of 5% of the net profit for that year. Consequently, the Company made an application to the Central Government for requisite approval for waiver of recovery of the excess remuneration, which was rejected. However, the Company has made a representation and is proposing to obtain shareholders' approval by means of a special resolution, in the forthcoming Annual General Meeting, seeking waiver of recovery of the excess remuneration.

Since, the Company has incurred loss in the Financial Year 2014-15, the minimum remuneration paid to Mr. Shiv Kumar Jatia as Managing Director in terms of the shareholders' ordinary resolution dated 28th September, 2010, exceeds the remuneration payable in terms of Section II of Part II of Schedule V to the Companies Act, 2013, for which the Company proposes to obtain shareholders' approval by means of a special resolution, in the forthcoming Annual General Meeting, seeking waiver of recovery of the excess remuneration of Rs. 20.64 Lakhs; and thereafter, will approach the Central Government for the requisite approvals.

(b) Taxation

(i) No provision for tax has been made for income tax in absence of any taxable income during the current year.

(ii) The Company has recognised deferred tax assets on employee benefits liabilities and other statutory liabilities, however, no deferred tax asset has been recognised in line with Accounting Standard (AS)-12 on "Accounting For Taxes on Income" on unabsorbed depreciation and carry forward losses in the absence of virtual certainty supported by convincing evidence, that the Company will have sufficient future taxable income against which such deferred tax can be realized.

(c) The Lease rentals under an operating lease have not been recognised as expense on a straight-line basis, since, in the opinion of the management the recognition method adopted which is as per respective contracts, is more representative of the time pattern of the user's benefit.

(d) Confirmation of debit & credit balances

Letters for confirmation of balances sent to parties have been received back only in a few cases and discrepancies, if any, pointed out by the parties are being investigated for necessary adjustments to be carried out.

(e) As per the requirement of Schedule III of the Act, the Board of Directors have considered the values of all assets of the Company other then fixed assets and non-current investments, and have come to a conclusion that these have a value on realisation in the ordinary course of business which is not less than the value at which they are stated in the balance sheet.

(f) Previous year's figures

The Company has reclassified or regrouped previous year figures to conform to current year's classification/ grouping.


Mar 31, 2014

1. Corporate information

Asian Hotels (North) Limited is a public limited company domiciled in India, incorporated under the provisions of the Companies Act, 1956 and listed on both National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The Company is operating a Five Star deluxe Hotel namely Hyatt Regency in Delhi since 1982.

2 CONTINGENT LIABILITIES AND COMMITMENTS

31st March 2014 31st March 2013 (Rs. In Lakhs) (Rs. In Lakhs)

A contingent liabilities

(a) Claims against the Company 495.58 489.96 not acknowledged as debts*

* includes demand raised by Service Tax Authorities amounting to Rs. 401.10 Lakhs including penalty demand of Rs. 250.00 Lakhs (Previous Year Rs. 467.96 Lakhs excluding interest and penalties) for earlier years upto 2007, against which the Company has filed an appeal with Customs, Excise and Service Tax Appellate Tribunal, New Delhi on 11th March, 2014. The Company is contesting to have already paid the determined balance liability before the issuance of show cause notice. Hence the Company may not be liable to pay any demand.

* includes contingent liability of Rs 53.35 Lakhs on account of payment to a foreign service provider, on which taxes are required to be withheld by the Company, as per the latest order of Assessing Officer. However, during the earlier years the Company was getting NIL withholding tax order for the same. The Company has gone into appeal with appropriate authorities against this order. As per the agreement with the foreign service provider the payments to be made to him shall be without any deduction of taxes, however, if there are any withholding taxes the same are to be borne by the Company.

Confident of getting a NIL withholding tax order, the Company has not provided for the expense of the withholding tax amount paid by the Company.

(b) Municipal Corporation of Delhi introduced a new method for payment of property tax under ''Unit Area Scheme'' w.e.f. 1st April, 2004. The Federation of Hotels and Restaurants Association of India (FHRAI) and the Company filed a writ petition in the High Court of Delhi against the said new method, which is still pending. In terms of the interim order dated 10th September, 2004 passed by the Hon''ble High Court, the Company has been paying a sum of Rs. 54.52 Lakhs per annum based on the Rateable Value method then existing. However, as a matter of abundant caution, based on usage factor of ten, the Company has provided for the difference in property tax as per Unit Area Scheme since introduction of the said new method, alongwith interest thereon.

(c) Relating to an accident in the hotel premises, a writ petition has been filed with Delhi High Court by a relative of the injured person, the Company has been made one of the respondents. Any consequence on the outcome of the case can not be ascertained.

3 SEGMENT REPORTING

The Company operates only in one reportable segment, i.e. Hospitality/Hotel Business at one location, namely New Delhi (India). The other business segment, i.e. power generation, though governed by different sets of risks and returns, however, is not a reportable segment as defined under the Accounting Standard (AS)-17 on Segment Reporting, and therefore, no separate disclosures have been made. The assets, liabilities and revenues relating to the said power generation business have, however, been disclosed in the accounts separately. The above treatment is in accordance with the guiding principles enunciated in the said Accounting Standard.

4 OTHER NOTES

(a) Confirmation of debit & credit balances

Letters for confirmation of balances sent to parties have been received back only in a few cases and discrepancies, if any, pointed out by the parties are being investigated for necessary adjustments to be carried out.

(b) As per the requirement of revised Schedule VI, the Board of Directors have considered the values of all assets of the Company other then fixed assets and non-current investments, and have come to a conclusion that these have a value on realisation in the ordinary course of business which is not less than the value at which they are stated in the balance sheet.

(c) Previous year''s figures

The Company has reclassified or regrouped previous year figures to conform to current year''s classification/ grouping.


Mar 31, 2013

1. Corporate information

Asian Hotels (North) Limited is a public limited company domiciled in India'' incorporated under the provisions of the Companies Act'' 1956 and listed on both National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The Company is operating a Five Star deluxe Hotel namely Hyatt Regency in Delhi since 1982.

2 seGment rePortinG

The Company operates only in one reportable segment'' i.e. Hospitality/Hotel Business at one location'' namely New Delhi (India). The other business segment'' i.e. power generation'' though governed by different sets of risks and returns'' however'' is not a reportable segment as defned under the Accounting Standard (AS)-17 on Segment Reporting'' and therefore'' no separate disclosures have been made. The assets'' liabilities and revenues relating to the said power generation business have'' however'' been disclosed in the accounts separately. The above treatment is in accordance with the guiding principles enunciated in the said Accounting Standard.

3 relAted PArtY disClosUres

(a) individual and his relatives having control over the Company (either directly or indirectly)

(i) Mr. Amritesh Jatia'' Director

(ii) Mr. Shiv Kumar Jatia'' Chairman & Managing Director

(b) Group Companies which signifcantly infuence the Company (either individually or with others)

(i) Yans Enterprises (H.K.) Limited'' an overseas entity (ii) Fineline Holdings Limited'' an overseas entity

(c) Group Companies which are signifcantly infuenced by the Company (either individually or with others)

(i) Fineline Hospitality & Consultancy Pte. Limited'' Mauritius'' a subsidiary company (wholly owned w.e.f. 29th January'' 2013)

(ii) Magus Estates and Hotels Limited'' India'' a subsidiary company (upto 28th January'' 2013)

(iii) Lexon Hotel Ventures Limited'' Mauritius'' a subsidiary company (w.e.f. 29th January'' 2013)

(iv) Leading Hotels Limited'' India'' a subsidiary company (w.e.f. 29th January'' 2013)

4. emPloYee BeneFits

The Company has classifed the various benefts provided to employees as under:-

(a) Defned contribution plans

– Provident fund

The Company has recognized the following amounts in the statement of proft and loss:

Employers'' contribution to provident fund :- Current Year Rs. 211.74 Lakhs (Previous year Rs. 217.59 Lakhs)

(b) Defned beneft plans

- Contribution to Gratuity funds

- Compensated absences - Earned leave

In accordance with Accounting Standard 15 (revised 2005)'' actuarial valuation was done in respect of the aforesaid defned beneft plans based on the following assumptions-

economic Assumptions

The discount rate and salary increases assumed are the key fnancial 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. The estimated term of the benefts/obligations works out to zero years. For the current valuation a discount rate of 8.00% p.a. (previous year 8.50%) compound has been used.

5. dUe to miCro'' smAll And mediUm enterPrises As deFined Under tHe msmed ACt'' 2006

As per the information available and explanations provided to us and certifed by the management'' there are no amounts due to any Micro'' Small and Medium Enterprises which are outstanding for more than 45 days together with interest at the Balance sheet date as defned under the Micro'' Small and Medium Enterprise Development Act'' 2006.

6. imPAirment

The Company has not recognised any loss on impairment in respect of assets of the Company in terms of Accounting Standard (AS) 28 on "Impairment of Assets" since in the opinion of the Management'' as confrmed by the Audit Committee'' the reduction in value of any asset'' to the extent required'' has already been provided for in the books. In respect of the assets at the subsidiary the impairment testing is based on the realisable value of underlying assets as tested at the level of the Board of Directors at the subsidiary and as confrmed by the Audit Committee of the Company.

7. otHer notes

(a) During the fnancial year 2011-12'' 76782214 3.5% Optionally Convertible Redeemable Preference Shares of USD 1 each held by the Company in FHCPL were prematurely redeemed and the redemption proceeds of USD 76.78 millions were converted into a foreign currency loan effective 30th September'' 2011. Interest accrued on the said loan for 18 months period ended 31st March'' 2013'' amounting to USD 5.42 million was due and payable on that date. The interest amount of USD 5.42 million and a part of the said loan'' to the extent of USD 31.73 million'' aggregating to USD 37.15 million were deployed to subscribe additional No Par Value ordinary shares of FHCPL after 31st March'' 2013.

(b) Confrmation of debit & credit balances

Letters for confrmation of balances sent to parties have been received back only in a few cases and discrepancies'' if any'' pointed out by the parties are being investigated for necessary adjustments to be carried out.

(c) As per the requirement of revised Schedule VI'' the Board of Directors have considered the values of all assets of the Company other then fxed assets and non-current investments'' and have come to a conclusion that these have a value on realisation in the ordinary course of business which is not less than the value at which they are stated in the balance sheet.

(d) Previous year''s fgures

The Company has reclassifed or regrouped previous year fgures to conform to current year''s classifcation/ grouping.


Mar 31, 2012

1. Corporate Information

Asian Hotels (North) Limited is a public limited company domiciled in India, incorporated under the provisions of the Companies Act, 1956 and listed on both National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). The Company is operating a Five-star deluxe hotel namely Hyatt Regency in Delhi since 1982.

(a) Rights, preferences and restrictions 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. The Company declares and pays dividend in Indian Rupees. The dividend proposed by the Board of Directors is subject to the approval of the shareholders in the ensuing Annual General Meeting. For the year ended 31st March 2012, the amount of per share dividend proposed as distribution to equity shareholders is Rs.1.50 (31st March 2011: Rs. 2.50). 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.

(b) Rights, preferences and restrictions attached to NCPs

NCPS carry a cumulative dividend of 1% p.a. Each holder of NCPS is entitled to preferential dividend and preferential distribution on liquidation of the Company. These shares carry no voting right except for one vote per share only on resolutions which directly affect their rights.

*During the previous year, the entire lot of 6,259,255 1% Fully Convertible Preference Shares (FCPS) were converted into equity shares of Rs. 10 each at a price of Rs. 419.80 per equity share, as computed in accordance with the mechanism provided in the Scheme of Arrangement and Demerger (the Scheme of demerger), as sanctioned by the High Court of Delhi, read with provisions relating to 'Preferential Issue' under SEBI (Issue of Capital and Disclosure Requirements) Regulations, 2009. Consequently, 8,051,447 equity shares of Rs. 10 each had been issued.

Nature of security and terms of repayment for secured long term borrowings:

(a) DBS Bank Limited -Rupee loan (carried interest @ 12.95%) and external commercial borrowings (carried interest range 4.2% to 5.95%) are secured / to be secured by exclusive first charge of land & building of Hotel Hyatt Regency Delhi; Personal guarantee of Chairman & Managing Director, pledge of shares held by him and an entity controlled by him; and pledge of shares representing Company's investment in foreign subsidiary Company. Rupees loan balance is repayable in 18 equal quarterly installments and External Commercial Borrowings are repayable as under: a. USD 217.50 lakhs is payable in 24 quarterly installments commencing from September, 2012; b. USD 530.00 lakhs is payable in 12 semi-annual installments commencing from April, 2013 and; c. USD 101.94 lakhs is payable in 12 semi-annual installments commencing from April, 2014.

(b) Axis Bank Limited -Rupee loan (carried interest @ 13.00%) is secured by exclusive first charge on moveable fixed assets of the Company - present & future; Personal guarantee of Chairman & Managing Director and Second Charge to be created on immovable assets of Hotel Hyatt Regency Delhi. Balance is repayable in 19 quarterly installments upto March 2017.

(c) Punjab National Bank-Rupee loan for business of generation of electricity (carried interest @ 14.25%) was secured by first charge by way of mortgage of freehold land and hypothecation of plant and machinery pertaining to windmills situated at Sinner & Sangli, Maharashtra.

(d) ING Vysya Bank-Rupee loan for business of generation of electricity (carried interest @ 12.50%) is secured by first charge and /or hypothecation of freehold land, plant & machinery and book-debts pertaining to the windmills situated at Sinner & Sangli in Maharashtra and personal guarantee of Chairman & Managing Director. Balance repayable in 19 equal installment upto October, 2016.

(e) Axis Bank-Rupee loan for acquisition of vehicles (carried interest @ 11.12%) is secured against hypothecation of certain vehicles. Balance repayable in 28 monthly installments upto July, 2014.

(f) ICICI Bank-Rupee loan for acquisition of vehicles (carried interest @ 7.75% to 8.50%) is secured against hypothecation of certain vehicles. Balance repayable in 17 monthly installments upto August, 2013.

(g) Kotak Mahindra Prime Limited -Rupee loan for acquisition of vehicles (carried interest @ 7.50% to 10.28%) is secured against hypothecation of certain vehicles. Balance repayable in 37 monthly installments upto April, 2015.

(a) Other loans and advances from DBS Bank Limited carries interest @ 12.95% and is secured / to be secured by exclusive first charge of land & building of Hotel Hyatt Regency Delhi; Personal guarantee of Chairman & Managing Director, pledge of shares held by him and an entity controlled by him; and pledge of shares representing Company's investment in foreign subsidiary Company.

(b) Other loans and advances from Punjab National Bank carried interest @ 10.45% and is secured by second charge (hypothecation) on all moveable assets, entire plant & machinery and furniture & fixtures forming part of fixed assets at Hotel Hyatt Regency Delhi.

(c) There is no continuing default in repayment of loans and interest as on 31st March 2012.

(a) Advances from customers includes Rs. 11,500 Lakhs (Previous Year Rs. 6,500 Lakhs) received from prospective buyer against agreements for sale/ fit outs of certain constituents forming part of the SERVICED APARTMENT PROJECT.

(b) Security deposits (interest free) includes Rs. 1,400 lakhs (Previous Year Rs. 900 lakhs) received from a company in which certain relatives of directors of the Company are interested, against expression of interest for forging a Joint Venture with the Company in respect of its KOLKATA PROJECT {Refer Note 14(a)}.

(c) Statutory liabilities includes provision for difference of property tax along with interest thereon amounting to Rs. 2,312.29 Lakhs, Previous Year 1,942.52 Lakhs {Refer Note 27A(b)}.

(a) The Company, based on the report by a Certified Valuer, had revalued land and building of Hotel Hyatt Regency Delhi (the land and building being more than twenty years old) by adopting Cost of Contractor's method, on 28th February 2007 at Rs. 85,700 Lakhs. The same resulted in an increase in the value of land and building of an amount of Rs. 82,131.81 Lakhs, and therefore, an equivalent amount had been credited to the Revaluation Reserve.

(b) Due to increase in the value of assets, as stated above, there was an additional charge of Rs. 53.91 Lakhs (Previous Year Rs. 53.91 Lakhs), for the current year, on account of depreciation. Resultantly, an equivalent amount of Rs. 53.91 Lakhs (Previous Year Rs. 53.91 Lakhs) has been withdrawn from the Revaluation Reserve and credited to the statement of profit and loss.

(g) Delhi Development Authority vide Notification No. 2034E dated 12.08.2008 has, subject to fulfillment of certain conditions, granted an additional FSI, which in case of the Company, works out to approx. 15000 square meters. The Company is in the process of utilizing the aforesaid additional FSI partially for expansion of the existing facilities (EXPANSION PROJECT) and the balance as a new Serviced Apartments Block (SERVICED APARTMENT PROJECT) with permitted commercial area at Hotel Hyatt Regency Delhi.

(b) Building under construction includes : -

- Rs.10,799.42 Lakhs paid to Municipal Corporation of Delhi as additional FSI charges and labour cess

- Rs. 211.65 Lakhs paid for repossession of areas for construction of spa

(c) Interest expenses and net gain/(loss) on foreign currency transaction and translation are related to certain loans (including foreign currency external commercial borrowings) taken for projects under construction.

(d) The Ministry of Corporate Affairs vide Notification dated March 31, 2009, as amended from time to time, had given an option to the companies whereby the exchange differences pertaining to long term foreign currency monetary items relating to acquisition of a depreciable asset can be added to or deducted from the cost of asset and shall be depreciated over the balance life of the asset. The Company had adopted the said option given under paragraph 46 of Accounting Standard (AS) 11. Accordingly, the net loss on foreign currency transaction and translation of Rs. 1,028.88 Lakhs (previous year Net gain on foreign currency transaction and translation of Rs. 440.65 Lakhs) on long term foreign currency loans relating to projects under construction is included in capital work-in-progress, as a part of fixed assets.

(a) Pursuant to a Joint-venture cum Subscription Agreement executed on 18th October 2010, the Company made a strategic investment of approximately Rs. 39,106.22 Lakhs in Fineline Hospitality & Consultancy Pte. Ltd., Mauritius, (Fineline Hospitality) previously known as Darius Holdings Ltd., acquiring controlling interest of 53% in its Equity and Preference Share Capital in accordance with extant regulations framed under the Foreign Exchange Management Act, 1999. Fineline Hospitality is to engage in the business of providing consultancy, project development and offshore project management primarily in the hospitality sector.

(b) With effect from 18th October, 2010, Fineline Hospitality along with two overseas subsidiaries and an Indian subsidiary became the Company's subsidiary. The Indian subsidiary is Magus Estates and Hotels Limited (Magus). Magus owns and operates "Four Seasons Mumbai". The overseas subsidiaries of Fineline Hospitality namely, Most Prof Hospitality & Consultancy Pte. Ltd. and Lexon Ventures Ltd. were amalgamated with Fineline Hospitality on 23rd August, 2011 and 14th September, 2011 respectively following the purchase method at the value of assets including investments at fair value, based on the Valuation Report on the basis of which the Company made its initial investment in Fineline Hospitality stated above.

(c) 76,782,214 3.5% Optionally Convertible Redeemable Preference Shares of USD 1 each (OCRPS) held by the Company in Fineline Hospitality were prematurely redeemed and the redemption proceeds were converted into foreign currency loan effective 30th September, 2011. Correspondingly, on the same date residual outstanding OCRPS which were held by Fineline Holdings Ltd., an overseas entity, in which certain directors are interested, in Fineline Hospitality were converted into 3.5% Redeemable Preference Shares thereby obviating the possibility of dilution in the Company's stake in Fineline Hospitality.

(d) During the year, the Company has taken a foreign currency loan equivalent to Rs 5,000 Lakhs and made investment in 5% Cumulative Redeemable Preference Shares (CRPS) of Fineline Hospitality, based on Revalidation Report issued by the merchant banker.

(a) In response to a financial bid made to West Bengal Housing Infrastructure Development Corporation Limited (WBHIDCO), the Company had been offered an allotment of a plot of land measuring six acres (approx.) on freehold basis for setting up of a five star hotel and allied facilities (KOLKATA PROJECT). Advance for Capital goods includes Rs. 2,921.49 Lakhs (Previous Year Rs.1,311.49 Lakhs) paid as earnest money, which represents 59% (Previous Year 25%) of the total cost of said allotted land. The balance is due for payment in the next financial year.

2 CONTINGENT LIABILITIES AND COMMITMENTS

31st March 2012 31st March 2011 (Rs. In Lakhs) (Rs. In Lakhs)

A CONTINGENT LIABILITIES

(a) Claims against the Company not acknowledged as debts* 499.68 530.32

* includes demand raised by Service Tax Authorities amounting to Rs. 467.96 lakhs (excluding interest and penalties) for earlier years upto 2007, against which the Company has filed an appeal with the said authorities. The Company may, however, be not liable to pay the demand for the periods till 18th April, 2006 in view of the judgement of the Hon'ble Supreme Court of India in the case of Indian National Shipowners Association whereby it is held that no service tax is leviable on certain services prior to 18th April 2006.

(b) Municipal Corporation of Delhi introduced a new method for payment of property tax under 'Unit Area Scheme' w.e.f. 1st April, 2004. The Federation of Hotels and Restaurants Association of India (FHRAI) and the Company filed a writ petition in the High Court of Delhi against the said new method, which is still pending. In terms of the interim order dated 10th September, 2004 passed by the Hon'ble High Court, the Company has been paying a sum of Rs. 54.52 Lakhs per annum based on the Rateable Value method then existing. However, as a matter of abundant caution, based on usage factor of ten, the Company has provided for the difference in property tax as per Unit Area Scheme since introduction of the said new method, alongwith interest thereon.

c) The Company has received a show cause notice from Directorate of Revenue Intelligence (DRI) in connection with alleged misuse of seven cars imported under EPCG scheme. The matter is being dealt with by the Company through their lawyers and on the insistence of the authorities, the Company has paid an amount of Rs. 220.00 lakhs (included under 'Advances recoverable in cash or in kind or for value to be received' Note no. 14 -Loans and Advances) as custom duty under protest.

Further, the Company has also provided a bank guarantee for Rs. 47.23 lakhs in the said matter.

B COMMITMENTS

(a) Estimated amount of contracts remaining to be executed on capital account and not 5750.39 6640.10 provided for:

(b) Lease commitments

(i) Future commitments in respect of assets acquired under Finance Schemes

Minimum installments

payable within one year 160.19 147.17

later than one year but not later than 64.10 179.88 five years

Present value of minimum installments payable within one year 147.95 128.17

later than one year but not later than 60.53 168.97 five years

(ii) Future minimum lease payments receivable by the Company in respect of non- cancellable operating leases (other than land) for shops and vehicles entered into by the Company :

Not later than one year 105.50 33.23

Later than one year and not later than 95.43 46.62 five years

(iii) Future minimum lease payments payable by the Company in respect of non- cancellable operating leases (other than land) for rented apartments entered into by the Company :

Not later than one year 57.96 -

Later than one year and not later than 8.25 - five years

3 SEGMENT REPORTING

The Company operates only in one reportable segment, i.e. Hospitality/Hotel Business at one location, namely New Delhi (India). The other business segment, i.e. power generation, though governed by different sets of risks and returns, however, is not a reportable segment as defined under the Accounting Standard (AS)-17 on Segment Reporting, and therefore, no separate disclosures have been made. The assets, liabilities and revenues relating to the said power generation business have, however, been disclosed in the accounts separately. The above treatment is in accordance with the guiding principles enunciated in the said Accounting Standard.

4 Related Party Disclosures

(a) Group Companies which significantly influence the Company (either individually or with others)

(i) Yans Enterprises (H.K.) Ltd., an overseas entity

(ii) Fineline Holdings Ltd., an overseas entity

(b) Group Companies which are significantly influenced by the Company (either individually or with others)

(i) Fineline Hospitality & Consultancy Pte Ltd, Mauritius, a subsidiary company

(ii) Magus Estates & Hotels Limited, India, a subsidiary company

(ii) Further, the Company had taken a legal advise that in view of the multiplicity of transactions / information, it is not practicable to identify and disclose the food / beverage / room or other sales to the employees / guests of the related parties at any of the outlets of the hotel owned by the Company and such transactions do not require prior approval from Central Government under Section 297 of the Companies Act, 1956.

5 employee benefits

The Company has classified the various benefits provided to employees as under:-

(a) Defined contribution plans

- Provident fund

(b) Defined benefit plans

- Contribution to Gratuity funds

- Compensated absences - Earned leave

In accordance with Accounting Standard 15 (revised 2005), actuarial valuation was done in respect of the aforesaid defined benefit plans based on the following assumptions- Economic Assumptions

The discount rate and salary increases assumed are the 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. The estimated term of the benefits/obligations works out to zero years. For the current valuation a discount rate of 8.50% p.a. (previous year 8.00%) 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 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.

6 DUE TO MICRO, SMALL AND MEDIUM ENTERPRISES AS DEFINED UNDER THE MSMED ACT, 2006

As per the information available and explanations provided to us and certified by the management, there are no amounts due to any Micro, Small and Medium Enterprises which are outstanding for more than 45 days together with interest at the Balance Sheet date as defined under the Micro, Small and Medium Enterprise Development Act, 2006.

7 IMPAIRMENT

The Company has not recognised any loss on impairment in respect of assets of the Company in terms of Accounting Standard (AS) 28 on "Impairment of Assets" since in the opinion of the Management, as confirmed by the Audit Committee, the reduction in value of any asset, to the extent required, has already been provided for in the books. In respect of the assets at the subsidiary the impairment testing is based on the realisable value of underlying assets as tested at the level of the Board of Directors at the subsidiary and as confirmed by the Audit Committee of the Company.

8 OTHER NOTES

(a) Post restructuring of the Company in terms of the Scheme of demerger, as sanctioned by the High Court of Delhi, each of promoter groups namely the Jatia Group, Gupta Group and Saraf Group, undertook inter-se transfer of their respective shareholding in the three de-merged entities pursuant to Regulation 3(1)(e) of the SEBI (Substantial Acquistion of Shares and Takeovers) Regulations, 1997, on 23rd August, 2010, as envisaged in Clause 5.8 of the Scheme of demerger. Resultantly, in the previous year, the Jatia Group acquired shares held in the Company by the other two promoter groups named above.

(b) Confirmation Of Debit & Credit Balances

Letters for confirmation of balances sent to parties have been received back only in a few cases and discrepancies, if any, pointed out by the parties are being investigated for necessary adjustments to be carried out.

(c) In the opinion of the Board of Directors, all assets of the Company except fixed assets and non-current investments have a value on realization in the ordinary course of business which is not less than the value at which they are stated in the balance sheet.

(d) Previous year's figures

Till the year ended 31st March 2011, the Company was using pre-revised Schedule VI to the Companies Act, 1956, for preparation and presentation of its financial statements. During the year ended 31st March 2012, the revised Schedule VI notified under the Companies Act, 1956, has become applicable. The Company has reclassified previous year figure to conform to current year's classification. The adoption of revised Schedule VI does not impact recognition and measurement principles followed for preparation of financial statements. However, it significantly impacts presentation and disclosures made in the financial statements, particularly presentation of the balance sheet.


Sep 30, 2009

1. Cash and Cash Equivalents

Cash and cash equivalents in the cash flow comprise of cash at bank and cash/cheques in hand and short term deposits with banks less short term advances from banks.

2. Dividend

Dividend proposed on equity shares, if any, is accounted for pending approval at the Annual General Meeting.

3. Contingent Liabilities: Prior Year Rs. in lakhs Rs. in lakhs (a) Outstanding Capital Expenditure Commitments 718.10 1577.29

(b) Claims against the Company not acknowledged as debts 617.18 653.01

(c) Demand for income tax (exclusive of interest amounting to Rs.NIL Prior Year Rs 109.59 Lakhs) not provided for pending appeals - 113.25

4. The Company, based on the report by a Certified Valuer, had revalued land and building of Hotel Hyatt Regency Delhi by adopting Cost of Contractors method, on 28th February 2007 at Rs. 85,700.00 Lakhs, the same resulted in an increase in the value of land and building of an amount of Rs. 82,131.81 Lakhs, and therefore an equivalent amount had been credited to the Revaluation Reserve Account. Due to increase in the value of assets, there was an additional charge of Rs. 80.87 Lakhs (Prior year Rs.53.91 Lakhs), for the current period, on account of depreciation. Resultantly, an equivalent amount of Rs 80.87 Lakhs (Prior year Rs.53.91 Lakhs) has been withdrawn from the Revaluation Reserve Account and credited to the Profit & Loss Account.

5. At the beginning of the current period, the Company held 75000 equity shares of Rs.10/- each of Regency Convention Centre and Hotels Ltd (RCC), representing 48.28% of paid up equity capital of RCC, acquired for a consideration of Rs. 173.02 Lakhs. During the current period, the Company acquired a further 16652 equity shares of RCC for a consideration amounting to Rs.2400 Lakhs, by virtue of which the aggregate share holding of the Company in RCC stood at 58.99% of the paid up capital of RCC, thus making it a subsidiary of the Company. Apart from the above, the Company, during the prior years, had also made an advance of Rs. 334 Lakhs for acquiring further shares of RCC from their existing shareholders and incurred expenditure on behalf of RCC amounting to Rs. 55.82 Lakhs upto the balance sheet date.

The principal assets of RCC comprises of an interest in a parcel of land at Mumbai, the right in such interest is being contested in the Bombay High Court. However, the Company has been legally advised that it has a fair chance of success. An independet broker has also made an indicative offer to the Company for its interest in RCC at a value which is higher than the book value being reflected in the books of the Company. In the proposed Scheme of Arrangement and Demerger of the Company (Refer Note 18 below) the aforesaid assets forms part of Kolkata undertaking at their book value. Considering that the value of the asset is contingent upon the outcome of legal proceedings, as suggested supra, in the light of present uncertainty about the outcome of the matter, and, therefore, whether there is impairment, if any, the value of the aforesaid assets can not be reasonably determined at present.

In view of the above, no provision for impairment in respect of said assets has been made in these financial statements.

6. The Company has not recognised any loss on impairment in respect of assets of the Company as is required in terms of Accounting Standard (AS) 28 on "Impairment of Assets" since in the opinion of the Management, as confirmed by the Audit Committee, the reduction in value of any asset, to the extent required, has already been provided for in the books. In respect of subsidiaries such decision is based on the management accounts/ audited accounts of the subsidiaries, as available and as examined by the Audit Committee on the basis of the information and explanations available.

7. Presently, the Company is operating an integrated hotel business at three geographical locations. These hotels namely Hyatt Regency Delhi, Hyatt Regency Kolkata and Hyatt Regency Mumbai are governed by the same set of risks and returns and hence have been considered as representing a Single Segment.

A Scheme of Arrangement and Demerger (the Scheme) was approved by the Board of Directors of the Company on 14th May, 2007. The Scheme envisaged the trifurcation of the Company in the following manner:-

i) Kolkata Undertaking as defined in clause 1.2.1 of the Scheme, comprising interalia of Hotel Hyatt Regency Kolkata and investments in the shares held in GJS Hotels Limited and Regency Convention Centre and Hotels Limited, and appropriate cash liquidity.

ii) Mumbai Undertaking as defined in clause 1.2.1 of the Scheme, comprising interalia of Hotel Hyatt Regency Mumbai, investments in the shares held in Aria Hotels & Consultancy Services Private Limited and deposits/advances paid towards acquisition of immovable property in Bangalore.

iii) AHL Residual as would emerge immediately after the transfer of and vesting in of Mumbai Undertaking and the Kolkata Undertaking in Chillwinds Hotels Limited (Transferee Company -I) and Vardhman Hotels Limited (Transferee Company-ll) respectively.

The Scheme, which was approved by the High Court of Delhi vide its order dated 29th February, 2008 and amended vide Orders dated 9th April, 2009 and 18th August, 2009, was filed with the Registrar of Companies, NCT of Delhi & Haryana, but could not take effect as certain conditions precedent were yet to be fulfilled. In order to overcome the impediments in implementation of the Scheme and to determine a fixed date which should be the Appointed Date for the purpose of drawing up the undertaking wise balance sheets in terms of the Scheme, the Company made an application to the Honble Court in May 2009, introducing the Appointed Date and incorporated certain clauses to define how the business of the three undertakings would be conducted between the Appointed Date and the Effective Date. The Honble High Court vide its order dated 29th May, 2009, stayed the effect and implementation of the Scheme, as approved earlier and directed the Company to obtain the approval of its equity shareholders for the amended Scheme. The Company made additional applications in August 2009 and November 2009, for further amendments, before the equity shareholders meeting could be convened in terms of Order dated 29th May, 2009, and the Honble Court vide its Order dated 10th November, 2009, directed the Company to convene a meeting of its equity shareholders on 11th December, 2009, to obtain their approval for the amended Scheme. Pursuant to the directions of the Honble Court, the Company has called its equity shareholders meeting on 11th December, 2009. Once the amended Scheme is approved by the equity shareholders and sanctioned by the Honble Court, the amended Scheme is expected to be implemented by the end of January 2010 having retrospective effect from the Appointed Date i.e. 31 st October, 2009. Subsequent thereto, the Promoter Groups intend to transfer their shareholding inter-se in the three demerged entities as provided in Clause 5.8 of the Scheme.

In view of the above, within the meaning of Accounting Standard (AS) 24 on "Discontinuing Operations", the operations of Kolkata undertaking and Mumbai undertaking constitute discontinuing operations. As at 30th September, 2009, the carrying amount of the assets of the Kolkata undertaking were Rs 40112.29 Lakhs (prior year Rs 38731.48 Lakhs), and of the Mumbai undertaking were Rs 39429.73 Lakhs (prior year Rs 42005.98 Lakhs) and their liabilities were Rs 22028.95 Lakhs (prior year Rs 21094.39 Lakhs) and Rs 29111.48 Lakhs (prior year Rs 30353.95 Lakhs) respectively.

The following statement shows the revenue and expenditure of continuing and discontinuing operations of the Company.

8. Letters for confirmation of balances sent to parties have been received back only in a few cases and discrepancies, if any, pointed out by the parties are being investigated for necessary adjustments to be carried out.

9. Out of the Service Tax demand raised and paid during the prior year for Rs.146.11 Lakhs, Rs. 95.94 Lakhs had been paid under protest. In the opinion of the Company, amount paid under protest is not liable to be paid and hence has been included under "Loans & Advances" as "Claims Recoverable" vide application dated May 9, 2008. The Company has also received notices with regard to Service Tax demand on certain services aggregating to Rs.482.54 Lakhs considered not tenable in the opinion of the Company. These are thus included under "Contingent Liabilities" as "Claims against the Company not acknowledged as debts" and no provision has been made against the same.

10. The Company is presently operating an integrated hotel business at three geographical locations. The operations of these hotels namely Hyatt Regency Delhi, Hyatt Regency Kolkata and Hyatt Regency Mumbai are governed by the same set of risks and returns and hence have been considered as representing a Single Segment. The said treatment is in accordance with the guiding principles enunciated in the Accounting Standard (AS)- 17 on Segment Reporting. The Company, during the prior year, had altered its object clause of memorandum of association and entered into a different business segment, viz., power generation, governed by different risks and returns. However, it is not a reportable segment as defined under the said Accounting Standard, and therefore, no separate disclosures have been made. The assets, liabilities and revenues relating to the said business have however, been disclosed in the accounts separately.

11. Municipal Corporation of Delhi introduced a new method for payment of property tax under Unit Area Scheme w.e.f. 1st April, 2004. The Federation of Hotels and Restaurants Association of India (FHRAI) and the Company filed a writ petition in the High Court of Delhi against the said new method, which is still pending. However, in terms of the interim order dated 10th September, 2004 passed by the Honble High Court, the Company has been paying a sum of Rs. 54.52 Lakhs per annum based on the Ratable Value method then existing. However, as a matter of abundant caution, and based on the legal opinion obtained by the Company, the Company has provided for the difference in property tax as per Unit Area Scheme and the payments made since introduction of the said new method, alongwith interest thereon. Such calculations are based on usage factor of 10.

12. The Company has classified the various benefits provided to employees as under: -

(a) Defined contribution plans

i) Provident fund

During the period, the Company has recognized the following amounts in the profit and loss account: Employers contribution to provident fund Rs. 527.52 Lakhs (prior year Rs. 272.33 Lakhs)

(b) Defined benefit plans

a) Contribution to Gratuity funds

b) Compensated absences - Earned leave

In accordance with Accounting Standard 15 (revised 2005), actuarial valuation was done in respect of the aforesaid defined benefit plans based on the following assumptions- Economic Assumptions

The discount rate and salary increases assumed are the 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. The estimated term of the benefit obligations works out to 0 years. For the current valuation a discount rate of 8 % pa. compound, has been used in consultation with the employer.

13. Related Party Disclosures

a) Parties which significantly influence the Company (either individually or with others) (i) Yans Enterprises (H.K.) Ltd.

(ii) DSO Ltd.

(iii) Saraf Industries Ltd.

b) Parties which are significantly influenced by the Company (either individually or with others)

(i) GJS Hotels Limited - a subsidiary company

(ii) Aria Hotels & Consultancy Services Private Limited - a subsidiary company

(iii) Chillwinds Hotels Limited - a subsidiary company

(iv) Vardhman Hotels Limited - a subsidiary company

(v) Regency Convention Centre & Hotels Ltd - a subsidiary company (an erstwhile associate company in the prior year)

d) Related Parties

Subsidiary

GJS Hotels Limited

Aria Hotels & Consultancy Services Private Limited

Chillwinds Hotels Limited

Vardhman Hotels Limited

Regency Convention Centre & Hotels Limited

(an erstwhile associate company in the prior year)

- Key Management Personnel

Mr. Sushil Gupta Managing Director (West)

Mr. Shiv Jatia Managing Director (North)

Mr. Umesh Saraf Managing Director (East)

- Relatives of Key Management Personnel

Mr. Sandeep Gupta Son of Mr. Sushil Gupta

Mr. R.G. Saraf Uncle of Mr. Umesh Saraf

- Entities controlled by Directors or their relatives

Bell Ceramics Limited

M/s Bhasin & Co

Choice Hospitality (India) Limited

Energy Infrastructure (I) Limited

Godfrey Philips Limited

Juniper Hotels Private Limited

Magus Estates & Hotels Limited Nepal Travel Agency Private Limited Ram Pyari Devi Charitable Trust WEL Intertrade Limited Eden Park Hotels Private Limited

14. Subsequent to 30th September, 2009, the Company has received Rs. 3000 lakhs on October 14, 2009 and Rs.31100 Lakhs on October 16,2009 as subscription money against the Fully Convertible Preference Shares (FCPS) which are to be issued pursuant to the Scheme.

The Object of the aforesaid proposed issue on preferential allotment basis is to facilitate the trifurcation of the Company as envisaged in the Scheme. The above proceeds may be allocated, for the purposes of the utilisation, by the Board of Directors of the Company, to their undertakings as per their expansion/ financial plans or otherwise.

The FCPS shall be convertible, in one or more tranches, into equity shares of face value of Rs.10/- each of the respective companies, i.e. AHL Residual Company, Transferee Company-I or Transferee Company-ll, as the case may be, based on allocation of FCPS in terms of the Scheme.

15. During the period, Term Loans taken by Aria Hotels and Consultancy Services Private Limited, a subsidiary company, from a financial institution and bank are secured by way of:-

(a) Mortgage by way of second pari passu charge created by the Company on its immovable property situated at Mumbai namely Hotel Hyatt Regency Mumbai.

(b) First pari passu charge created by the Company on credit card receivables of Hotel Hyatt Regency Mumbai.

(c) Pledge of Investment of the Company in Aria Hotels and Consultancy Services Private Limited, a subsidiary company.

(d) Personal Guarantees of the two of the directors of the Company.

16. The Company had obtained approval of the Registrar of Companies, NCT of Delhi & Haryana under Section 210 of the Companies Act, 1956, for extension of accounting year 2008-09. Accordingly, the current accounting period is for eighteen months from 1 st April, 2008 to 30th September, 2009 and hence the prior year figures are not comparable.

17. Prior year figures have been regrouped and rearranged wherever necessary.

Schedules 1 to 21 form an integral part of the Balance Sheet as at 30th September, 2009 and Profit & Loss Account for the eighteen months period ended on that date.

 
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